« Fewer People To Thank | Main | Frist Fumbled... »

March 2, 2005

Greenspan on the Hill again...

Today, in front of the House Budget Committee, Fed Chairman Alan Greenspan repeated his endorsement of personal accounts for Social Security from several days ago. From the AP:

Greenspan again endorsed the key part of President Bush's Social Security overhaul to set up private accounts. But he said Congress needed to do other things to put Social Security and Medicare on a more sound financial footing given the impending retirement of 78 million baby boomers. While saying that Congress should move quickly to consider possible benefit cuts for Social Security and Medicare before the baby boomers begin retiring, Greenspan, as he did a month ago, urged a go-slow approach to setting up Bush's proposed private accounts. The administration estimates those accounts will require about $745 billion in new borrowing over the next decade. Greenspan said it is difficult to judge what impact that increased borrowing will have on financial markets and for that reason, the government should move cautiously to keep from triggering higher interest rates. "I think it is very important that you move gradually and see what the response is," Greenspan said. He said it is entirely possible that the impact on interest rates will be "zero," but he said since that can't be forecast with total confidence "cautious and gradual" was the best approach. Bolstering the administration's drive to get a Social Security reform bill enacted this year, Greenspan warned that every year of delay would make fixing the problem harder, especially after the baby boomers begin retiring. ... Greenspan reiterated that he supports President Bush's push for setting up personal retirement accounts by diverting up to 4 percentage points of payroll taxes into the new accounts. Diverting the payroll taxes into the Social Security trust fund, he said, had merely allowed the government to run larger budget deficits. Greenspan said that switching to the private accounts would be a way to bolster the nation's low savings rate.

Posted by Andrew Roth at March 2, 2005 2:18 PM | Print

Trackback Pings

TrackBack URL for this entry:
http://www.socialsecuritychoice.org/cgi-bin/mt/mt-tb.cgi/5019