Social Security

Alan J. Auerbach
Robert D. Burch Professor of Economics and Law and director of UC Berkeley’s Burch Center on Tax Policy and Public Finance

Expertise:
Tax and fiscal policy.

Contact:
Office phone: (510) 643-0711
E-mail: auerbach@econ.berkeley.edu

Additional contacts:
Kathleen Maclay, Media Relations: (510) 643-5651, kmaclay@berkeley.edu
Roxanne Makasdjian, broadcast: (510) 642-6051, roxannem@berkeley.edu

Background:
Auerbach is director of the Robert D. Burch Center for Tax Policy and Public Finance. The joint program between UC Berkeley’s Economics Department and the School of Law (Boalt Hall) was established to promote research in tax policy and public finance, and to stimulate informed discussion on nationally significant tax policies.

He is a member of the advisory committee for the Bureau of Economic Analysis in the U.S. Commerce Department and served as deputy chief of staff for the U.S. Joint Committee on Taxation in 1992. He also was a research associate at the National Bureau of Economic Research. The author of numerous scholarly articles, policy papers, books and reviews, Auerbach was elected to the American Academy of Arts and Sciences in 1999.

Auerbach often is interviewed about economic issues by media outlets including The Wall Street Journal, New York Times, Washington Post, Investor’s Business Daily and CBS Marketwatch.

Comments on Social Security:
Auerbach says that the Social Security system has a long-run imbalance that can be reduced or eliminated only by raising taxes, cutting benefits, or some combination of the two. Bush's proposal for partial privatization would redirect some payroll taxes to individual accounts and lessen the need to pay benefits to future beneficiaries, because they will have the accounts. But Auerbach says the proposal increases the funding gap for current retirees' benefits, because some of the payroll taxes that pay for them have been taken away.

As a consequence, he says, the plan would do nothing to address Social Security's long-run fiscal imbalance – it would simply change the timing of budget deficits, reducing them in the future (when the public program's benefits are reduced) while increasing them in the near-term, when additional debt must be issued to pay for the benefits of current retirees.

Says Auerbach, "Only if coupled with benefit cuts or tax increases can privatization address Social Security's fundamental problem. Indeed, this may be one of the unstated objectives of reform: By changing the system, it may be easier to disguise tax increases or benefit cuts that occur simultaneously."