- The Washington Times - Friday, December 21, 2001

The President's Commission on Social Security Reform voted to endorse a personal account option for Social Security last Tuesday. Many commentators are having a hard time understanding what to make of the commission and its impact. But the truth is, the commission is a howling success for the president, the reformers, and the working people of America.
The reason why the commission is such a success is simply this. It has produced three alternative reform options for the president, each involving personal accounts. As officially scored by the Social Security Administration, each of these options does the following:
Counting the benefits from the personal accounts along with continuing Social Security benefits, workers across the board get higher retirement benefits overall as a result of the reform.
At the same time, each of the reform options reduces the long term financing gap of Social Security.
For over a year now, great storytellers like Henry Aaron have been spinning long contrary yarns about how a personal account option for Social Security would require reductions of 30 percent, or 50 percent, or 70 percent in Social Security benefits. Yet, the commentaries we have been providing here have been saying all along that any personal account reform the commission proposes would increase retirement benefits for working people. Now you know where to go the next time you want to find out what is going on with Social Security reform.
The proposal for a personal account option for Social Security has now turned the corner. It has gone establishment. It has been examined by a presidentially appointed commission of experts and by the senior staff of the Social Security Administration. They have approved a varying set of proposals as administratively, economically and politically viable. So what's next?
The most important factor regarding the next steps in the reform process is the greatly enhanced stature of the president since September 11. The country will now give him a full and clear hearing on the issue. Given the overwhelmingly powerful appeal of the reform, and the public's already great receptivity to it as demonstrated in years now of strongly positive polling data, there is every reason to believe that a spirited campaign on this issue will be successful.
That is why the essential next steps need to be taken with great vigor and forcefulness by the president himself. He should first make such Social Security reform a centerpiece of the State of the Union address in January. He should say that he will take the next year to explain and promote the idea to the American people and develop the details of legislation he will propose the following year.
Then he must do what Ronald Reagan did on tax reform. He must go to city after city for events focused on Social Security reform. Other members of his administration must promote the idea as well.
In this campaign for reform, the administration should focus on all of the highly positive attributes of personal accounts. These accounts will increase retirement benefits for working people all working people, including those with the lowest incomes. Moreover, workers would personally own and control the personal accounts and the funds and would be able to leave accumulated funds to their children and other heirs. Over the long run, the personal accounts would reduce the burdens on Social Security and the unfunded liabilities and financing gaps of the program, without raising taxes or cutting benefits.
Moreover, personal accounts are highly progressive. Lower -income workers are most in need of the higher benefits that the personal accounts would produce, and could least afford the higher taxes or lower benefits that would otherwise result. The reform would give these lower-income workers their only real chance to participate in the capital markets as owners and accumulate substantial savings and wealth, like higher-income workers. The result would be more equal ownership of wealth and greatly enhanced social solidarity. The special discriminatory effects of the current system on blacks, women and other minorities would be ended.
Over the longer run, the reform would also mean lower taxes and much less real government debt. Increased saving and investment and reduced taxes can be expected to increase economic growth, with more jobs and higher wages. And all of this would be accomplished with no changes for seniors today, or for anyone near retirement.
Indeed, the president's personal accounts would simply reform Social Security to be what the public always thought it was. The more workers rely on personal accounts, the more the program really is a system where workers each pay into an individual account devoted to them that will finance their own future benefits. That, of course, is not what Social Security is today.
This array of benefits from reform is truly breathtaking, and reaches into every family in the country. Properly done, this issue can't lose.

Peter Ferrara is an associate professor of law at the George Mason University School of Law and a senior policy adviser to Americans for Tax Reform on Social Security.

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