Golden State Panel to Examine Impact on Seniors A California Assembly Committee will examine the impact of mandatory Social Security coverage on public employers and the services they currently provide particularly to senior citizens not only in California but also in other States. The California Assembly Public Employees Retirement and Social Security Subcommittee will hold the hearing in Anaheim on October 22, 1999. The Coalition to Preserve Retirement Security is providing information to the Committee. The district of House Speaker Dennis Hastert, a former teacher, would suffer the second greatest cost among Illinois' 20 congressional venues under mandatory Social Security. It is the taxpayers in each jurisdiction that will be the ultimate decision-makers as to how to absorb the cost.
Recent history indicates that raising taxes is difficult and unpopular.
It is highly likely, therefore, that unless taxes are increased, spending reductions, such as benefit cuts, will be necessary to accommodate this new cost. In addition to the new direct cost of remitting payroll taxes to the Federal government, there may be added, hidden costs. As contributions to public plans decrease, the associated investment earnings will be lower, requiring governments to make up the difference. Also, governments will be burdened with the cost of operating new plans or tiers. These increased administrative costs could eat further into plan assets or require new outlays from general revenue.