SSA Examines Administration Proposal

July 7, 2000

The Social Security Administration released its review of the Clinton administration's Social Security proposals based upon the Office of Management and Budget's mid-session budget estimates. Despite prior statements from the Vice President that the administration never proposed government investment in the stock market (see above), the SSA memo states clearly that "the President proposes that a portion of the transfers be invested in corporate equities (stock), up to a limited portion of the total assets of the trust funds." By 2017, 15 percent of the total Social Security trust fund would consist of equities, and for the period from 2011-2050 the government would hold approximately 3.6 percent of total U.S. equities.

The SSA estimates that the administration's transfers of general revenue would keep the Social Security trust fund solvent until the year 2063. But it is worth recalling the administration's own admonition that trust fund "balances are available to finance future benefit payments and other trust fund expenditures-but only in a bookkeeping sense. ... They do not consist of real economic assets that can be drawn down in the future to fund benefits." [FY 2000 Budget, Analytic Perspectives p.337]

For more information on the Clinton administration's Social Security proposal, see the General Accounting Office's "Social Security and Surpluses: GAO's Perspective on the President's Proposals," available at www.gao.gov, where Comptroller General David M. Walker declares that the President's plan to simply transfer general revenues to Social Security "does not represent a Social Security reform plan and does not come close to 'saving Social Security'."

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