San Antonio, Tex. - President Bush's plan to fix Social Security through the creation of individual accounts does not solve the problem and may make matters worse for some, according to Kenneth S. Apfel, the Sid Richardson Chair of Public Affairs at the University of Texas and former Commissioner of Social Security. Apfel discussed his analysis of the Bush plan at the Retirement Conference Series, sponsored by LIMRA, LOMA and the Society of Actuaries.

"[Bush's plan] clearly weakens the benefit system but doesn't resolve the problem," Apfel said. The problem is that the foundation of the system provides a base of guaranteed retirement income that constitutes a collective benefit, which is critical for lower income Americans.

"If Social Security were gone tomorrow, 50% of Americans would live in poverty," Apfel said.

There is more at stake than a social responsibility to help older Americans in the near term, as such a move also endangers later generations, Apfel said. The reduction of Social Security taxes going towards benefit payment for current retirees because of privatization would force the government to borrow more. "I wonder if sizable increases in debt service would create dangerous destabilization of the debt system," Apfel said. "Putting too small collective benefit with too large individual responsibility is a risk to younger workers."

Apfel concluded by saying that camps on both sides of the argument need to make concessions. On the one hand, concerns about keeping benefit levels at their current level may be unrealistic, and assertions that taxes will not be increased are also unlikely to survive.

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