List of References
Board of Trustees, Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, 2002, “The 2002 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds,” March.
Congressional Budget Office, 2002b, “Projections of Medicare and Prescription Drug Spending,” statement of Dan L. Crippen before the Committee on Finance, United States Senate, March 7.
Diamond, P. A., and P. R. Orszag, 2002, “An Assessment of the Proposals of the President’s Commission to Strengthen Social Security,” unpublished mimeo, June.
Kohl, R. and P. O’Brien, 1998, “The Macroeconomics of Ageing, Pensions, and Savings: A Survey,” OECD Economics Department Working Paper 100, June.
Mackenzie, G. A., 2001, “The Distribution Phase of an Individual Accounts Reform of Social Security: The Potential for Private Sector Annuities,” Urban Institute, unpublished mimeo, November.
President’s Commission to Strengthen Social Security, 2001, “Strengthening Social Security and Creating Personal Wealth for All Americans,” December 21.
Prepared by Paula De Masi and Christopher Towe.
These estimates are staff calculations based on the actuarial estimates contained in the 2002 trustees’ reports for the OASDI and Medicare systems.
The simulations are based on the assumption that the balance for the non-Medicare, non-OASDI, and noninterest federal budget remains constant as a share of GDP after 2012; that net interest payments on federal debt increase in line with the stock of debt; and that OASDI and Medicare spending as a share of GDP rise in line with the projections contained in the 2002 Trustee’s reports.
The Balanced Budget Act also established a National Bipartisan Commission on the Future of Medicare which was charged with making recommendations by March 1999 to “strengthen and improve” the Medicare system in time for the retirement of the baby-boom generation. The 17-member commission failed to reach consensus on a single plan, and therefore was unable to make any formal recommendations.
The Administration has proposed a Medicare modernization program, and called for additional funding rising to $19 billion by FY 2012, but no details appear available.
CBO (2001a) notes, for example, that there would be a strong incentive for providers to discriminate among retirees according to risk class. Diamond and Orszag (2002) also note that the administrative costs of PRAs would likely be significantly largely in the initial years than assumed by the President’s commission, and these could be prohibitive when the size of accounts is small.