In May 2001 President Bush appointed the President's Commis-
sion to Strengthen Social Security to formulate proposals that would
maintain Social Security's promise for today's retirees while improv-
ing that promise for younger workers through personal accounts.
That was their task, and in the end they accomplished it well.

The commission began its work with an interim report, issued in
August 2001, outlining the state of the current program. The interim
report generated significant controversy—particularly its criticism
of the Social Security trust fund and the overall progressivity of
the program.

The commission's final report and recommendations, delivered
to the president in December 2001, contains three separate reform
proposals based on personal retirement accounts. Although the plans
encompass a broad range of ideas on how to maintain Social Security,
each would pay benefits at least as high as the current program at
a lower long-term cost, while giving workers the opportunity to
build assets and wealth in personal accounts that they would own
and control.

The commission's Plan 1 would do nothing more than give work-
ers the option to voluntarily invest a portion of their Social Security
payroll taxes in a personal retirement account. Because it makes no
other changes to the system, it is politically attractive in the short
term, but it does not address long-term concerns. Nevertheless, even
this “accounts only” approach would pay higher benefits to all
retirees while reducing long-term general revenue costs by 8 percent
compared with the current program.

Originally published as Cato Institute Social Security Paper no. 27, August 22, 2002, and
updated to reflect current information.

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