How to Fix Social Security

One of the more interesting ideas of the past year is the "Nonpartisan Social Security Reform Plan," proposed by Jeffrey Liebman, Maya MacGuineas, and Andrew Samwick. Here is their description of the plan:

The three of us – former aides to President Clinton, Senator McCain, and President Bush – did an experiment to see if we could develop a reform plan that we could all support. The Liebman-MacGuineas-Samwick (LMS) plan demonstrates the types of compromises that can help policy makers from across the political spectrum agree on a Social Security reform plan. The plan achieves sustainable solvency through progressive changes to taxes and benefits, introduces mandatory personal accounts, and specifies important details that are often left unaddressed in other reform plans. The plan also illustrates that a compromise plan can contain sensible but politically unpopular options (such as raising retirement ages or mandating that account balances be converted to annuities upon retirement) -- options that could realistically emerge from a bipartisan negotiating process, but which are rarely contained in reform proposals put out by Democrats or Republicans alone because of the political risk they present.

The American Enterprise Institute will be hosting a discussion of the plan on June 19, including a great line up of discussants. If you live in the DC area, you can find information about attending here. If like me you live in boondocks, you can see the event later over the web. I hope C-SPAN is there and replays the event many times. The more voters think about how to deal with the upcoming entitlement crunch, the better.

Full disclosure: The program is filled with old friends of mine. Jeff Liebman is on the Harvard faculty, and Andrew Samwick was my Chief Economist when I was CEA chair. Among the discussants, Chuck Blahous was a colleague and ally while I was in the Bush administration, and Jason Furman and Kent Smetters are former students. So I won't be surprised if the symposium includes a few points I agree with.