Citation URL: http://www.urban.org/MichaelWeisner

Constitutional and legislated state budget rules limiting deficits, total spending, and total or particular tax burdens have a long history. Their existence suggests a belief that unfettered legislators would borrow, tax, and spend more than desired by a majority of voters. Rules’ details vary greatly among the states, with some easier to circumvent than others. The famous Proposition 13, enacted in California at the height of the tax revolt of the late 1970s in order to limit property tax burdens, has been largely offset by new fees and charges.

It is not easy to penetrate the many myths surrounding the Social Security debate. The proposal to put the Social Security trust fund's surplus in a "safe-deposit box" is highly popular politically and passed the U.S. House of Representatives with 416 votes in favor and 12 against. It is unlikely that many voters know what the proposal means. Luckily, the legislation that creates a "lock box" for Social Security does not actually put the trust fund surplus in a safe-deposit box. Instead, it attempts to use the funds for the worthy cause of repaying the national debt.

As the nation faces the growing aging population, the authors discuss numerous Social Security reform proposals that would scale back benefits, or use individual savings accounts or increased government and Social Security surpluses to try to increase national saving and, eventually, to replace lost benefits. The authors conclude that proposals should be judged according to their ability to meet various goals or principles. Among the most important are fairness, economic efficiency, and economic growth. More research is needed on the fine points of proposals to fend off a retirement crisis and put Social Security and Medicare on a secure footing. Such research should feed into a national dialogue on Americans' shared retirement future.

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