This Issue Brief provides a framework for evaluating and comparing Social Security policies by delineating 11 broad areas of consideration and highlighting some of the relevant questions within these areas. This framework is not a comprehensive list of all considerations but is intended to provide a feel for their complexity and to highlight some of their most popularly recognized interactive possibilities. As the first report to be delivered in the course of EBRI's Social Security Reform Analysis Project, this Issue Brief sets the theoretical framework in which to place the forthcoming technical results.
Sound outcome comparison and analysis defies cursory examination and is a multifaceted process. The interplay between complex beliefs and values involved is testimony to the potential shortcomings of any proposed "easy answers"e; to the resolution of Social Security's finance issues. As this framework shows, in fair and comprehensive comparison and analysis, every Social Security policy reform, as well as the current system, must be held accountable to a number of hard questions.
There are three broad areas to consider in comparing Social Security policies. The first is identification of the policies' underlying philosophies and assumptions that affect policy goals. Second, the nuts-and-bolts structure of each policy must be ascertained. Knowing the specific parameters of a plan provides a starting point for predicting programmatic outcomes, the third broad area of consideration.
Here is where "the basics" end and complexity begins. For the purposes of Social Security debate, there are 11 broad policy outcome considerations: (1) adequacy, (2) equity, (3) monetary costs, (4) other economic effects, (5) effects on the rest of the U.S. retirement system, (6) governmental effects, (7) administrative effects, (8) political effects, (9) social effects (or, nonmonetary cost considerations), (10) protection against uncertainties, and, finally, (11) the determination of the best policy by weighing each of the aforementioned considerations.
These outcomes must be identified in terms of three key aspects: each outcome's effect on all demographic groups potentially affected, potential short-term and long-term interactions among outcomes, and the rationale behind each outcome prediction. The four points of consideration for outcome prediction rationale are: assumptions used, validity of assumptions, sensitivity of outcomes to assumptions, and robustness of these assumptions over time.
Finally, differing ideas about the appropriate goals of Social Security policy emerge from varying underlying assumptions about political, economic, and other human behaviors. In addition, policy advocates differ in their assumptions about demographics and their views of desirable public policy goals, including beliefs about the appropriate delegation of responsibility between government and workers in providing retirement income security.
