Social Security

Some reform of Social Security is needed to keep the system solvent given the additional financial pressure
that will be placed on it as the baby boom generation retires: the Social Security Administration estimates that payroll taxes will have to be increased 2.2 percent or benefits reduced by an equal amount to maintain financial balance
over the next 75 years. The Advisory Council on Social Security has suggested two possible approaches to the
long-term financing of the system. One would make minor changes to the existing system to close the gap
between contributions and benefits; the other would privatize and thus radically alter the system. Senior Fellow
Walter M. Cadette examines these two approaches and concludes that the nation would be better off reforming
the current system than making such a fundamental change as privatization.