Social Security payroll taxes must not be increased, as they have been 20 times since the program began in 1937. The Government itself must not invest Social Security funds in the private economy. Successful Social Security reform, which addresses both the long-term unfunded liability and the generational inequities, must be built upon a core of individually controlled, voluntary personal retirement accounts that will augment the Social Security safety net. Cato's principles for effective reform, while not identical, are very similar. Solvency is not enough .
Workers deserve the best possible deal for their dollar.
Theoretically, this could be accomplished by raising taxes or cutting benefits. But Social Security faces a second crisis as well. Young workers will receive a negative rate of return from the program, less back in benefits than they pay in taxes. This low return, and other inequities, particularly disadvantages women, the poor, and minorities. Any Social Security reform must reverse this trend, raising the rate of return and providing higher retirement benefits.