FOR IMMEDIATE RELEASE CONTACT: (202) 225-9263
June 8, 1998
No. SS-18
Congressman Jim Bunning (R-KY), Chairman, Subcommittee on Social Security of the Committee on Ways and Means, today announced that the Subcommittee will hold the eleventh in a series of hearings on "The Future of Social Security for this Generation and the Next." At this hearing, the Subcommittee will examine in detail the structure of personal savings accounts (PSAs) within the Social Security system and the effects individual-owned investments would have for retirees, financial markets, the investment community, PSA investors, and businesses, both large and small. The hearing will take place on Thursday, June 18, 1998, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 1:00 p.m.
In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only. Witnesses will include economic, investor, investment, and program experts, along with business representatives. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
Possible establishment of PSA's as an element of Social Security modernization has added an additional level of debate regarding the system's solvency. Two of the three plans advanced by the 1997 report of the Advisory Council on Social Security proposed PSA's as a substitute for the shrinking resources available to traditional social insurance.
Since that time, Members of Congress of both parties, along with research and public interest groups have set forth plans containing PSA's as an integral part of Social Security reform. During the President's first forum on Social Security held in Kansas City, the President, Members of Congress, and social insurance experts agreed PSA's deserved further consideration.
Giving individuals investment choices not only would alter the role of participant workers, but also would incorporate a number of other institutions which currently have no or limited involvement in today's traditional Social Security system. Private capital markets, investment companies, employers, and certain Federal agencies would need to adapt to become stakeholders in the system.
To date, proposals have varied widely in structure and in recent months, more details have been reported for public examination. Several such proposals envision personal investments made through a centralized, quasi-government organization, similar to the Federal Employees Thrift Fund. The choice of such investments would be limited to "passive" vehicles, such as stock and bond indexes, to lessen the influence of government in the private capital markets and businesses. Other models propose investments more akin to the current Individual Retirement Accounts, where each investing worker would choose among a larger array of financial assets through private investment companies. Each model plan also varies in the way workers receive their funds upon retirement or disability.
The cost, operation, and regulation of these two diverse models vary considerably as do the opportunities and risks for the participants, both as workers and as retirees. In previous hearings, the Subcommittee has heard from authors of PSA plans. In the upcoming hearing, economic experts and representatives of institutions who could become vital components of a new system will discuss the implications for the economy and stakeholders.
In announcing the hearing, Chairman Bunning stated: "Personal savings accounts may be an answer, especially for young people, to meet the challenge of providing for their own retirement. Someone once said, 'You cannot plough a field by turning it over in your own mind.' We need to have accurate and expert information about the important structural elements needed to ensure any new system would actually work."
FOCUS OF THE HEARING:
The Subcommittee will receive the views of experts in the field of investments and capital markets and representatives of institutions that might become participants in a PSA system. Members of the Subcommittee would like to hear from each witness regarding: (1) the effect of Social Security PSA investments on the capital markets, (2) the cost and administration of PSA's, (3) needed investor education, and (4) the role of employers, both large and small, in a PSA system.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Any person or organization wishing to submit a written statement for the printed record of the hearing should submit six (6) single-spaced copies of their statement, along with an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, with their name, address, and hearing date noted on a label, by the close of business, Thursday, July 2, 1998, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Social Security office, room B-316 Rayburn House Office Building, at least one hour before the hearing begins.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
1. All statements and any accompanying exhibits for printing must be submitted on an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, typed in single space and may not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.
2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers where the witness or the designated representative may be reached. This supplemental sheet will not be included in the printed record.
The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press, and the public during the course of a public hearing may be submitted in other forms.
The
Committee seeks to make its facilities accessible to persons with
disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.