The overriding premise of the Social Security system is to provide individuals with a defined future benefit with a government guarantee -- whereas private accounts, as history has shown, provide neither ("I want my safety net," Cover Story, May 16). But there may be alternatives that could provide a safety net for those who will rely on their defined stipend.
A simpler way to tweak the system may be to increase the amount subject to payroll taxes. Most of the wealthy would object to this scenario, but then Social Security was not structured to benefit the wealthy. To authorize private accounts is nothing but a windfall for financial institutions, and it will remove the safety net and an ironclad government guarantee for 80%-plus of the population.
Robert E. Callard
The trend toward widespread capital ownership is consistent with economic populism and democracy -- neither of which seems to be fading in appeal. The latest market bubble and crash -- together with corporate misbehavior -- sidetracked this evolutionary trend, but if we continue to have capitalism, we shall have an ownership society sooner or later: Nothing else makes sense. To believe, deep in the 21st century, that we will choose a conflict-ridden, class-based redistributive society (becoming more like Germany?) appears the more incredible conclusion.
Count me in for Bush's Ownership Society, and I'm not even Republican. If I were given the opportunity to divert a portion of my income taxes to an alternative investment, I would take it. In the dot-com crash, I went broke like the rest of America, and I had to claw my way back. But the experience did not make me risk-averse; it made me smarter.
The Investment Company Institute (ICI) believes a solution to retirement security must include private investing. When Social Security was created, President Franklin D. Roosevelt described it as a "cornerstone that was by no means complete." A bill recently introduced by Representatives Paul Ryan (R-Wis.) and William Jefferson (D-La.) provides help for Americans saving to fund their future. By allowing mutual-fund shareholders to defer the taxes they now must pay on reinvested capital-gains distributions until shares are sold, the legislation would enable mutual-fund investors to keep their money at work longer and help secure their long-term financial goals.
Paul Schott Stevens
Investment Company Institute
"Ted Olson vs. an asbestos fix" (Washington Outlook, May 16) reports that Olson is standing ready on behalf of asbestos trust funds to challenge the proposed $140 billion asbestos administrative-compensation scheme now before Congress. Testifying at the Senate Judiciary Committee's invitation two years ago, I explained why those challenges lack merit. Former Solicitor General Seth Waxman and prominent attorney Carter Phillips joined in my conclusions. Olson's arguments echo failed objections to the federal Black Lung compensation program and to state workers' compensation statutes. Those precedents support replacing the avalanche of asbestos litigation with the pending proposal to allocate responsibility more rationally than the badly broken status quo.
Urging Congress to let the avalanche continue lest the U.S. Supreme Court invalidate the proposed alternative makes little sense. After all, it was that Court that wrote in 1997, in a landmark asbestos case I successfully argued: "A nationwide administrative claims-processing regime would provide the most secure, fair, and efficient means of compensating victims of asbestos exposure."
Laurence H. Tribe
Corporate defined-benefit pensions do not have a future ("Rising tensions over pensions," Workplace, May 16). The bleak prognosis for these plans commenced when Congress passed the Retirement Income Security Act of 1974. It demanded overbearing regulations and requirements of the defined-benefit pension plan. Rather than ease up on the regulations, politicians saw these plans as an opportunity to gang up on "greedy" corporations. Congress continued to pile on more stringent pension-plan regulations and requirements. The inevitable result, in a few years, will be the death of the defined-benefit pension plan, and millions of employees will be left without the retirement security offered by such plans.
Last week, Sears, Roebuck & Co. (SHLD) and Arthur J. Gallagher & Co. (AJG), the third-largest insurance broker in the U.S., announced they were freezing their defined-benefit pension plans. We can expect such announcements to accelerate in the next couple of years.