FOR IMMEDIATE RELEASE, Contact (202) 225-1721
February 24, 1999
No. FC-8
Congressman Bill Archer (R-TX), Chairman of the Committee on Ways and Means, today announced that the Committee will hold a hearing on investing Social Security's Trust Funds in the stock market. The hearing will focus on the effects of government-directed and individually directed investments. The hearing will take place on Wednesday, March 3, 1999, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.
Oral testimony at this hearing will be from invited witnesses only. Witnesses will include experts in Social Security and investment policy. 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:
Over the next 75 years, Social Security is expected to face a funding shortfall equal to 2.19 percent of taxable payroll. Traditionally, the gap between Social Security's income and costs has been filled by increasing payroll taxes, reducing benefits, and/or borrowing from the public. However, policy experts are now seeking new approaches to strengthen Social Security's finances. Leaders of both parties, including the President, have supported increasing the program's income by investing a portion of Social Security's excess tax receipts in the stock market. These surpluses are currently invested in special issue Treasury bonds, which earn an average annual yield of 2.8 percent. According to the President's 1994-96 Advisory Council on Social Security, stock investment would earn a real annual yield of 7 percent.
Although there is agreement that investing in stocks would help restore Social Security's long-term solvency, how the investments should be directed remains a key focus of debate. The President has proposed that a portion of the Trust Funds be invested directly by the Federal Government in the private sector. Some Members of Congress and other experts argue that investments should be directed by individuals through personal retirement accounts. While, in comparison with personal retirement accounts, investing a portion of the Social Security Trust Funds directly in the private market may reduce individual exposure to risk, some experts, including Federal Reserve Chairman Alan Greenspan, have warned it would lead to political interference in private financial markets and corporate decision making.
In announcing the hearing, Chairman Archer stated: "The President's proposal to invest in the private market as a solution to Social Security's problem is a breakthrough. While the White House and I may differ on who should own and control these investments, we need to carefully consider the benefits and risks of each approach as we move forward to save Social Security."
FOCUS OF THE HEARING:
The hearing will focus on the economic, political, and social effects of private market investing by the Federal Government and by individuals.
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, Wednesday, March 17, 1999, 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 Committee office, room 1102 Longworth House Office Building, by close of business the day before the hearing.
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.