Financing social security; bonds in retirement

"It's no secret that Social Security is facing a long-term financing shortfall" begins a recent paper by Alicia Munnel, Director of the Center for Retirement Research at Boston College, who discusses whether a portion of Social Security should be financed with the income tax, or general revenues. Munnel notes the two components of Social Security costs: the contributions that generate current benefits and contributions "to make up for paying benefits to early participants that far exceeded their contributions." It is the latter that needs shoring up. Her conclusion:

...the shift from the payroll tax to general revenues for the portion of the system’s financing associated with the start-up of the program would represent a more equitable sharing of the burden. At the same time, through the payroll tax workers would be paying an amount for their benefits equal to what they would have paid had a trust fund accumulated.

In another paper from the Center, research economist Anthony Webb argues that for retirement income security, households should seek return on capital over return of capital. He briefly discusses short-term deposits, long-term bonds, and Treasury Inflation-Protected Securities (TIPS). He states, "...the true risk-free asset is a portfolio of bonds and, in particular, inflation-protected bonds of appropriate maturities."


Should Social Security Rely Solely on the Payroll Tax?
      Report, IB#9-16 (pdf, 7pp/188kB), Aug. 2009
      Summary

The Case for Investing in Bonds During Retirement,
      Report, IB#9-17 (pdf, 6pp/156kB), Aug. 2009
      Summary

Mine's better than yours...not

The Urban Institute recently published a brief examining the quality of U.S. health care as compared internationally.

The U.S. does relatively well in some areas, including cancer care, and less well in others, including conditions amenable to prevention and coordinated management of chronic conditions. The authors conclude that concerns that health reform could compromise currently excellent care are unwarranted; health reform can only help.

Measuring the technical quality or effectiveness of health care, the authors considered several areas:

• Quality of preventive care.
• Quality of care for chronic conditions.
• Quality of care for certain acute conditions.
• Quality of cancer care.

Findings include:

• U.S.-Canada comparisons more often find Canadian quality is better.
• Overuse of health services not linked with service volume.
• Patient safety problems appear more prevalent in the United States.
• Close to one-fifth of the U.S. population under age 65 is uninsured.

Stating that "the United States is one of only three countries in the OECD, together with Mexico and Turkey, which has a sizeable share of its population lacking coverage," the authors go on to summarize their findings:

Our findings strengthen arguments that reform is needed to improve the relative performance of the U.S. health system on quality. If reform accomplishes no more than extending insurance coverage to the more than 45 million Americans without insurance, it will be an important step forward, but more is needed to ensure health care quality improvement.

How Does the Quality of U.S. Health Care Compare Internationally? by Elizabeth Docteur and Robert A. Berenson (Urban Institute)
(August 2009, pdf. 14pp/148kB)

Abstract (html)

Containing MA health costs

In 2006 Massachusetts passed landmark legislation to provide almost universal health insurance to its residents. A report on the first year of its implementation warned that health care reform "will become unaffordable...unless health care spending can be brought under control." The state contracted with RAND to develop cost containment strategies and to assess their impact on the health care system.

RAND Health said to first consider two basic approaches to reducing spending: reducing prices (pay less for care) and reducing volume (use fewer services), and noted that within those two approaches two common methods are used: incentives and regulation. RAND also came up with 21 policy options grouped under five categories:

• Reform payment systems
• Redesign the healthcare delivery system
• Reduce waste
• Encourage consumers to make good health choices
• Change medical liability laws

Controlling Health Care Spending in Massachusetts: An Analysis of Options
      Report (pdf. 246pp/1.5MB)
      Summary (pdf, 49pp/365kB)
      News release, Aug. 7, 2009

The Hawaii Legislature - its first 50

In commemoration of Hawaii's 50th statehood anniversary to be celebrated August 21, the Hawaii Legislature has produced an informative chronicle of its history. Beginning with the First Legislature that convened on Aug. 31, 1959, in Special Session, and concluded in 1962, this account is conveniently compiled by decades. Each biennial session contains rosters of Senate and House members, as well as legislative actions on the top issues of the day.

Fifty Years of Legislative History, 1959-2009

Hawaii's Five-O KO'd

The New York Times published an editorial wondering at Hawaii's much lack of official celebration commemorating Hawaii's 50th anniversary of statehood:

It's not that the anniversary is being totally ignored. There’s a statehood commission. There are events...On the actual anniversary, there's a conference at the convention center in Honolulu where panelists will discuss state history, the economy and the environment, then party into the night with the Platters, the Drifters and the Coasters.

Hawaii's governor's current webpage would differ as to the extent of celebration, "the Hawai`i 50th Anniversary of Statehood Commission is sponsoring events across the state." The mentioned conference is titled, The New Horizons for the Next 50 Years, A Commemoration Conference, and its website states:

The 50th Anniversary of Hawai‘i’s Statehood provides a unique opportunity to commemorate the path that has brought us to the success we have experienced in our first 50 years since statehood, and to solidify the vision for who we will be over the next 50 years.

The price of attendance is listed as only $30 ($15 for students), and "original Hawaii 50th Statehood Anniversary products certified by the 50th Anniversary of Statehood Commission" are available for purchase online.

Seems this is not enough for NYT:

...the islands bled at Pearl Harbor, rebuilt the fleet to win the Pacific war, and sent thousands of sons overseas, including the Japanese-American volunteers of the 100th Battalion, one of the most decorated units in Army history...

Hawaii has given a lot to the Union. It got its own native-son president in January. Only 21 states are in that club. The guy who really invented baseball is buried in Honolulu. And if you could go to any of the 50 states right now, which would it be? The state has a lot to celebrate, if it really wanted to.

PO closures

Citing a May 15, 2009, letter (pdf, 88pp) from the U.S. Postal Service (USPS) to the American Postal Workers Union (APWU), regarding possible closures of post office branches (POBs) and stations (POSs), the Congressional Research Service (CRS) issued a report on the proposed closures and issues for Congress. (Attached to the letter was an 87-page list of the 3,105 POBs and POSs being considered for closing.) CRS stated in its Summary:

Federal law requires the USPS to arrange its delivery and service network to most efficiently serve the public. However, the proposed closures may raise a number of issues, including public participation in the closure process, the effects on postal workers, and the possible effects of closures on communities. Congress may wish to consider a variety of measures to address these possible issues.

Post Office and Retail Postal Facility Closures: Overview and Issues for Congress, R40719 (pdf, 19pp/263kB), from Open CRS, July 23, 2009

See earlier post that includes a GAO testimony on USPS's financial problems.

Social Security projections '09

On Aug. 7, the Congressional Budget Office (CBO) released the 2009 update of its long-term Social Security projections, covering the 75-year period 2009-2083. CBO "projects that the Social Security trust funds will be exhausted in 2043." The report concludes:

Long-term budget projections require a stable economic backdrop. For these projections, CBO assumed that even a large increase in federal debt would not affect economic growth or real interest rates after the first 10 years. However, CBO projects that under current law, federal debt will increase substantially, resulting in higher interest rates and slower economic growth than are assumed in this report. If that occurred, the actual shortfall in Social Security’s finances would be greater than that projected in this report.

CBO's Long-Term Projections for Social Security: 2009 Update
      Report (pdf, 44pp/328kB)
      Director's blog

Just in ... Haleakala FEIS

Final Environmental Impact Statement for the Advanced Technology Solar Telescope on the proposed ATST within the Haleakala High Altitude Observatory (HO) site on Maui was prepared by the National Science Foundation (NSF). The purpose of the project "would be to help scientists understand the solar magnetic activities and variability that drive space weather and the hazards it creates for astronauts and air travelers, and for communications to and from satellites."

Back in May, "Haleakala called best site for telescope" headlined an article in the Star Bulletin that reported NSF had studied 70 sites around the world, including Mauna Kea and Mauna Loa, and selected Haleakala as "the only site that satisfies the goals of the world's largest optical solar telescope."

TD194.5 N32 2009
FEIS (pdf, 4 vols.)

See also NSF's ATST environmental compliance website with links to related documents