Social Security

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SOCIAL SCIENCE RESEARCH NETWORK

EMPLOYEE BENEFITS, COMPENSATION & PENSION LAW ABSTRACTS
Sponsored by Pension Governance, LLC
Vol. 8, No. 17: May 10, 2007

Editor: PAMELA J. PERUN
Policy Director, Initiative on Financial Security,
Aspen Institute
PAMELA@PLANETNOW.COM
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Topic of This Issue:
Social Security
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T A B L E O F C O N T E N T S

"The Public Trust in Private Hands: Investing Social Security
through a Federal Government Corporation"
BENJAMIN A. TEMPLIN
Thomas Jefferson School of Law

"Survivor Benefits for Families of Deceased Servicemembers and
Overseas Contract Workers"
VIRGINIA P. RENO
National Academy of Social Insurance (NASI)
ANITA CARDWELL
National Academy of Social Insurance (NASI)
JONI LAVERY
National Academy of Social Insurance (NASI)

"Social Security for Migrant Workers: The EU, ILO and
Treaty-Based Regimes"
BARBARA J. FICK
Notre Dame Law School
ALMA C. GARCIA
Pontifical University Javeriana

"Social Security Reform in 2005 and Beyond"
KATHRYN L. MOORE
University of Kentucky College of Law

"Spending and Tax Entitlements"
JOHN R. GIST
AARP

"Social Security and Government Deficits: When Should We Worry?"
NEIL H. BUCHANAN
George Washington University Law School
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"The Public Trust in Private Hands: Investing Social Security
through a Federal Government Corporation"
TJSL Legal Studies Research Paper No. 963534

Contact: BENJAMIN A. TEMPLIN
Thomas Jefferson School of Law
Email: btemplin@tjsl.edu
Auth-Page: http://ssrn.com/author=348985

Full Text: http://ssrn.com/abstract=963534

ABSTRACT: The funding crisis facing Social Security could be
dramatically reduced if the $1.9 trillion accumulating in the
Trust Fund were put into a diversified portfolio of stocks, bonds
and other assets instead of the low yield U.S. Treasury
certificates in which the Fund is currently invested. While the
long term economic benefits of a diversified portfolio are
largely undisputed, politicians cannot agree on whether the
government or private individuals should make the investment
decision. Republicans and Libertarians are philosophically
opposed to the idea of government investment because of
legitimate fears that politicians will interfere in corporate
governance and steer money into investments that serve special
interests. One reason Republicans advanced personal accounts as a
solution to the funding crisis was because individual taxpayers,
rather than the government, would make the investment decision.
However, for a variety of reasons the Republican personal
accounts proposals are politically infeasible, and with time
running out, a different strategy to leverage the private markets
is needed. Another solution to the problems posed by government
investment would be to create a federal government corporation
(FGC) as an investment vehicle for the Social Security
Administration (SSA). Historically, FGCs have played an important
role in managing the nation's financial interests. Using an FGC
as the investment arm for the SSA would distance the Fund from
political influence so that professional investment advisors
could make decisions based on wealth maximization rather than
political influence. Such a solution could be the best chance
U.S. taxpayers have to reduce projected Social Security tax
increases and maintain benefits. The Canadian government
successfully created a federal Crown corporation in 1997 as the
vehicle to invest its social insurance trust fund. The Canadian
FGC shifted its trust fund assets from government bonds into a
higher yield diversified portfolio without yielding in any
material way to political interference. However, concerns over
whether FGCs comport with U.S. constitutional requirements have
led some scholars to question the legitimacy of FGCs. This
article explores the theoretical, constitutional and legal
ramifications of creating a federal government corporation for
the purpose of investing the $1.9 trillion Social Security Trust
Fund in higher yield securities. I offer a prescriptive federal
corporate regime which limits political influence in the
investment process yet comports with constitutional requirements
while maintaining accountability and transparency.
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"Survivor Benefits for Families of Deceased Servicemembers and
Overseas Contract Workers"
Social Security Brief No. 23

Contact: VIRGINIA P. RENO
National Academy of Social Insurance (NASI)
Email: vreno@nasi.org
Auth-Page: http://ssrn.com/author=377090

Co-Author: ANITA CARDWELL
National Academy of Social Insurance (NASI)
Email: acardwell@nasi.org
Auth-Page: http://ssrn.com/author=460307

Co-Author: JONI LAVERY
National Academy of Social Insurance (NASI)
Email: jlavery@nasi.org
Auth-Page: http://ssrn.com/author=382290

Full Text: http://ssrn.com/abstract=962904

ABSTRACT: Social Security is best known as a retirement program,
but it is also an important source of income security for
families with children, including families of servicemembers who
risk their lives in military service. When a member of the armed
forces dies, his or her family may qualify for Social Security
until the youngest child completes high school. A widowed spouse,
with or without children, is entitled to benefits for life (or
until remarried) from the Department of Veterans' Affairs when a
servicemember dies. Benefits from both sources are paid in full
to families eligible for both. Families of Americans who die
while working overseas for companies under contract with the U.S.
government are eligible for both Social Security and a special
workers' compensation program provided under federal law.
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"Social Security for Migrant Workers: The EU, ILO and
Treaty-Based Regimes"
Notre Dame Legal Studies Paper No. 07-33
Revista Colombiana de Derecho Internacional, Vol. 9,
2007

Contact: BARBARA J. FICK
Notre Dame Law School
Email: fick.1@nd.edu
Auth-Page: http://ssrn.com/author=431241

Co-Author: ALMA C. GARCIA
Pontifical University Javeriana
Auth-Page: http://ssrn.com/author=793827

Abstract: http://ssrn.com/abstract=979829

ABSTRACT: Migrant workers face special problems in terms of
qualifying for, and receiving payment under, national social
security systems. In an effort to mitigate these problems, many
states coordinate their social security systems. This paper
explores how coordination schemes work in regional mechanisms
such as the European Union, in international conventions adopted
by the International Labour Organisation, and in multi-lateral
treaties such as the Andean Social Security Instrument.
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"Social Security Reform in 2005 and Beyond"
NYU REVIEW OF EMPLOYEE BENEFITS AND EXECUTIVE COMPENSATION,
Alvin D. Lurie, ed., 2006

Contact: KATHRYN L. MOORE
University of Kentucky College of Law
Email: kmoore@pop.uky.edu
Auth-Page: http://ssrn.com/author=281705

Full Text: http://ssrn.com/abstract=964997

ABSTRACT: Social Security reform started out with a bang in 2005.
President Bush made it the centerpiece of his 2005 State of the
Union address, and he spent the early months of the year on a
60-day, 60-city tour around the country in which he touted his
pet project of creating Social Security "personal retirement
accounts." Despite its early prominence, Social Security reform
ended with a whimper by the end of 2005.

This Article describes and analyzes three of the most politically
salient reform proposals in 2005: (1) President Bush's "Personal
Retirement Accounts," (2) Robert Pozen's "Progressive Price
Indexing Plan," and (3) Proposals to Fund Personal Retirement
Accounts with Social Security's Annual Surpluses. The Article
then explains why Social Security reform failed despite President
Bush's Herculean effort to create personal retirement accounts.
Finally, it concludes by discussing the prospects for reform in
2006 and beyond.
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"Spending and Tax Entitlements"
Tax Notes, Vol. 115, No. 2, April 9, 2007

Contact: JOHN R. GIST
AARP
Email: JGist@aarp.org
Auth-Page: http://ssrn.com/author=99583

Abstract: http://ssrn.com/abstract=978884

ABSTRACT: Concerns about the affordability of an aging society
have moved entitlement spending - especially for Social Security,
Medicare, and Medicaid - to the forefront of domestic policy
debates. Another part of our social welfare system - tax
entitlements, like the exclusion for employer-provided health
insurance or the deduction for mortgage interest payments -
represent an entirely distinct and hidden part of our social
welfare system.

Spending entitlements totaled more than $1.4 trillion in 2006
(not counting offsetting receipts), compared with $850 billion in
tax entitlements. Both sets of programs operate somewhat
automatically without annual appropriations review, both are very
large, and both have the same impact on federal budget deficits.
But spending entitlements have received far more attention in the
debate over our current and future budget problems.

The debate over spending entitlements has led to the impression
that they benefit mainly the old and that they are relatively
poorly targeted, benefiting the middle class and more affluent as
well as the poor and low-income. A more comprehensive look at
entitlements to include tax benefits shows that spending and tax
entitlements are both very large (although spending entitlements
are larger) and that overall entitlements are closely divided
between those who are age 65 or older and those under 65. Even
though spending entitlements broadly span the middle class, they
are more closely targeted on those in need than tax entitlements.
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"Social Security and Government Deficits: When Should We Worry?"
GWU Law School Public Law Research Paper No. 242
GWU Legal Studies Research Paper No. 242
Cornell Law Review, Vol. 92, p. 257, 2007

Contact: NEIL H. BUCHANAN
George Washington University Law School
Email: nbuchanan@law.gwu.edu
Auth-Page: http://ssrn.com/author=47801

Full Text: http://ssrn.com/abstract=959933

ABSTRACT: In this Article, I critically examine the assumption
that the Social Security system faces a financing crisis and that
the government can avert the crisis only by acting now to cut
benefits or to raise taxes. The best conclusion we can draw from
the current evidence is that the system is not doomed and that it
is not necessary to institute immediate changes. We should, of
course, continue to monitor the situation closely to determine
whether future changes become necessary. This conclusion is
further strengthened by the likelihood that any changes the
government makes to the Social Security system today will be
regressive, harming the middle class and the least fortunate in
order to forestall a crisis that may never occur or that future
progressive changes in policy will be able to address.