MEET GENE STEUERLE:
For Our Grandchildren?s Lea Abdnor recently sat down and visited with Eugene Steuerle, one of the first to examine how Social Security?s structure hasn?t kept pace with the changing times. Designed in the late 1930s when a working husband and a stay-at-home wife were the norm, is it too late to bring Social Security in sync with contemporary family life?
Gene Steuerle is a senior fellow at The Urban Institute, co-director of the Urban-Brookings Tax Policy Center, columnist for Tax Notes, and the author or editor of 14 books and close to 1000 reports, articles, Congressional testimonies or reports, and columns. He serves on advisory panels or boards for the Congressional Budget Office, the General Accountability Office, and the Joint Committee on Taxation.
Previous positions include president of the National Tax Association (2001-2002), chair of the 1999 Technical Panel advising Social Security on its methods and assumptions, member of the Center for Strategic and International Studies? National Commission on Retirement Policy, deputy assistant secretary of the Treasury for tax analysis (1987-1989), and resident fellow at the American Enterprise Institute.
One of Dr. Steuerle's most recent books is Social Security and the Family: Addressing Unmet Needs in an Underfunded System, examines the impact of Social Security programs on individuals and families.
Interview
Abdnor: How and when did you become interested in the Social Security issue?
Gene Steuerle: I?ve always been fascinated by major issues in government, particularly how it (we) make choices through our budget and tax systems. Social Security is the only major policy essentially based on lifetime, rather than just annual, income, and it is the flagship of social insurance policies?that is, policies in which we are mandated to participate. Much of my recent interest comes from concern that our budgets invest well in our children and the realization that almost all federal spending is now scheduled to go to us baby boomers when we retire. This won?t happen, but it means that reform is needed along the way.
Abdnor: You?ve written many articles and books on this subject of Social Security. And you and your colleagues are the most respected scholars on the issue of the inequities in the system. What are some of the significant things you?ve learned from your research that policy makers and the media should know?
Gene Steuerle: Well, if we want good policy, the first lesson is that we should set out our various principles first?even when they might conflict with each other. Starting out with proposals essentially forces conclusions to be reached before the analysis is done. But the media loves conflict, so it?s easy to get attention to fights over individual accounts on the one side and protecting what we have now on the other. To give one great example, not once in the Social Security debate over the past few years has the Administration or Congress ever compared proposals on the basis of what they would do for elderly poverty. You would think that would be one target, if not the only target of reform, wouldn?t you?
Abdnor: What should the goals of Social Security reform be?
Gene Steuerle: The first and primary goal should be to protect the old and disabled and those most likely to be poor in old age. This requires looking at some issues like retirement age. Even if the system were in balance or surplus forever, the larger the share of benefits we provide in middle age, the smaller the share that we provide in old age. (Life expectancy has increased so much that only a little more than a third of Social Security benefits now goes to those with less than 10 years of life expectancy?those old age years when support is most needed.) Another principle that should be applied to all public policies is equal justice, which means trying to treat equally those in equal circumstances. For instance, there?s almost no case for giving couples with equal incomes very different levels of Social Security benefits based just on what share of income is earned by each spouse. But Social Security creates a number of such sources of unequal justice, in part because it was designed based on a stereotype of the family in the early 20th century. A third is to provide an appropriate level of benefits to the elderly relative to the young?and vice versa?but this requires considering all the factors involved, including health benefits, years of support, tax rates, and so forth. A fourth is to try to minimize the disincentives to work and save?in no small part because more work and saving means higher levels of benefits obtainable for any given tax rate.
Abdnor: What is your view of the political situation facing the issue?
Gene Steuerle: Something must be done. We know that. And so does every politician I meet?at least when we are talking in a back room. The real pressure is coming from the rest of the budget. As retirement and health gobble up almost all additional revenues the government receives, we are scheduled to spend smaller and smaller portions of our national income and domestic spending budget on children and on investment in the future. This squeeze, I believe, is the ultimate force pushing both political parties to the table. Admittedly, much of this political preordaining of future budgets?and removal of all slack to meet new needs or new demands of voters?comes from health cost growth. But retirement still looms large, and, as I noted, Social Security is the flagship. Also, retirement policy is an area ripe with opportunity, not just problems. Senior people aged 55 to, say, 80 are, in my view, likely to represent for the first half of the 21st century what women did for the last half of the 20th century?the largest pool of underutilized talent in the country that needs to be?and likely will be?tapped. My fear is not that reform will be forever avoided?that is impossible. It is that reform will not be based on the types of principles I outlined above, principles that in my view are getting far too little attention.
Abdnor: Are there ways politics can be set aside or at least minimized?
Gene Steuerle: We need a civic or public square in which these issues can be discussed rationally, without rancor, and without special agendas other than fixing our problems. Much of the public desperately wants those types of discussions, and I am modestly hopeful that they will begin to occur. Discussions that start with principles, and then show how alternatives fare under those principles, are the most fruitful. Lines in the sand drawn by politicians?often during campaign time?are among the most harmful.
Abdnor: After a hard day of working on the issues, what do you do to blow off steam or just relax?
Gene Steuerle: I love nothing more than time with family, friends and other loved ones. My daughters got married over the past three years; now I have new sons and my first grandchild, so the family keeps expanding. I have great colleagues at work?smart, stimulating, and generous people. I?m involved in a chartable work like ourvoicestogether.org, which not only tries to achieve some good but involves more great people. Add in some exercise and good reading, and what more can one want out of life?
