SOCIAL SECURITY STOCK MARKET IDEA ADVANCES.Byline: Robert Pear The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Members of a federal advisory panel told Congress on Monday that a portion of Social Security payroll taxes Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. should be invested in the stock market, and several senators expressed cautious support for the idea. The proposal, which represents a radical change in Social Security policy, survived its first test on Capitol Hill without criticism from any member of Congress or any of the experts on pension policy who testified before a Senate subcommittee sub·com·mit·tee n. A subordinate committee composed of members appointed from a main committee. subcommittee Noun . Details of the proposal have not been worked out, and Congress is not expected to take action this year. But lawmakers clearly were intrigued with the possibility that Social Security could earn a higher rate of return by investing some of its trust fund assets Fund assets The total value of a portfolio's securities, cash, and other holdings, minus any outstanding debts. in common stocks and mutual funds. Since creation of the Social Security program in 1935, the money obtained from payroll taxes and not immediately needed for benefits has been invested in government securities. Members of the advisory panel said stocks had outperformed bonds over long periods of time. The return on government securities, while relatively low, is guaranteed. The panel acknowledged that stock investments would entail a slight increase in risk for Social Security, but said the risk was manageable. After hearing from three of the 13 members of the panel, the Advisory Council on Social Security, Sen. John Breaux John Berlinger Breaux (last name pronounced BRO) is a former United States senator from Louisiana who served from 1987 until 2005. He was also a member of the U.S. House from 1972 to 1987. He was considered one of the more conservative national legislators from the Democratic Party. , D-La., said: "There is agreement that the trust fund could be invested in equities. The question is, who controls those investments?" The hearing Monday was held by the finance subcommittee on Social Security and family policy, headed by Sen. Alan Simpson Alan Simpson may refer to:
Some council members said Social Security payroll taxes should be kept in one big pool and that a portion should be invested by federal officials or their agents in a broad selection of stocks intended to mirror the overall performance of the market. Other council members want to create an investment account for each person covered by Social Security. Workers then could decide for themselves how the money should be invested, though the government still would provide some basic Social Security benefits. Edith Fierst, a member of the advisory panel, testified: "All members of the advisory council favor private investments. That's a very significant change. The difference among us is whether investments in equities should be made by individual workers or by the trust fund." |
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