Social Security, the federal program providing income security for retirees, the disabled, and their survivors, is one of the most effective government programs in U.S. history. Unfortunately, it’s also in trouble and no consensus has emerged, either in Washington or among the public at large, on what approach the nation should take to fix it.

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Choice 1: Maintain Our Commitments, Through A Combination Of Benefit Cuts And Tax Increases

Our government should keep Social Security intact, so that all Americans can have a stable retirement. Even if it requires raising taxes significantly or slashing spending on other government programs, the promise to every American of income security in retirement years must be honored. The size of the baby boom generation does create financial pressure, but it would be immoral and unthinkable to arbitrarily reduce benefits.


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Choice 2: Make Social Security Affordable By Focusing On Those Who Need It Most

To avoid difficult choices in years ahead when it comes to tax hikes and reductions in government programs, we must start to think of Social Security in new ways. 

 
Most importantly, we should change Social Security’s retirement benefits from a universal program that every worker is entitled to when he or she reaches a certain age, to a targeted one for people who would otherwise be living in poverty during old age. In other words, the program should be reserved for lower income people who would not otherwise be able to live securely in later life. Social Security should not provide extra income to those who are fortunate enough to be relatively well-off and who are able to fund their own retirement. 

 

 


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Choice 3: Make Retirement Security More Of A Personal Responsibility

We need a dramatic rethinking of Social Security. Americans -- whose savings rates had fallen to zero before the current financial crisis, and many of whom are plagued by personal debt – need to save more for retirement and for other lifetime needs.

We need a system of mandatory personal savings accounts, which make individuals much more responsible for their own financial security, even though Social Security would be retained to provide some benefits. Mandatory personal savings accounts either could wholly or partially replace the current system, putting responsibility for retirement security where it should be, on each of us individually.

True, some people would make out better than others under this plan, because some people are better savers and investors than others. But if they do their homework and invest prudently, they ought to be able to retire in an acceptable fashion.

 


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