Social Security's Chief Actuary Releases Further Scoring of Leading, Conservative IPI Reform Plan, Says IPI

4/13/2004

From: Sonia Hoffman of the Institute for Policy Innovation, 703-912-5742

WASHINGTON, April 13 -- Today the Social Security Administration's chief actuary released supplemental scoring regarding his December 1 score of an Institute for Policy Innovation (IPI) Social Security reform plan -- a plan that is now backed by an alliance with co-chairs Dick Armey, Jack Kemp and Dorcas Hardy.

The supplemental score shows the exact amount of Social Security trust fund bonds that would be have to redeemed under the reform plan in order to pay all promised Social Security benefits.

"If the transition financing specified in the reform plan is provided, then these numbers also show the net transition deficits under the reform and the full amount of new debt that would be issued to the public," says IPI Senior Research Fellow and plan author Peter Ferrara.

All together, the official score reveals:

-- Social Security surpluses start in 2029 and are sufficient within the next 15 years to pay off all the transition debt paid in the previous years so that the net impact on the federal debt is zero.

-- Social Security deficits under the current system starting in 2018 would accumulate to about the same as in 2028.

-- If new debt is issued to cover the deficits, it would not be paid off in later years, but would continue to grow indefinitely, to well over 300 percent of GDP and beyond.

-- The IPI reform plan will eliminate the unfounded liability of Social Security, officially estimated today at $10.5 trillion (three times the reported net national debt).

-- The IPI reform plan would achieve the largest reduction in government debt in world history.

"Overall, the official score shows that the reform is quite feasible," continues Ferrara. "Over the long run, the reform provides enormous benefits for working people and the country as a whole."

Note: The alliance backing the plan is officially known as The Alliance for Retirement Prosperity.