Excessive indexation of Federal government pension payments

(Ref. 315)
Problem Components
Policy issue area: Economics
Policy issue: Spending
Description: Government pension payments (Social Security, civil service) are indexed at a higher rate than the productivity of the economy or the inflation rate justify.
Symptoms: Inflation; income transfer from working age people and children to retired persons.
Causes: Political influence of senior citizen and other special interest groups.
Cost of problem: -
Solution Components
Resources: Federal government (executive and legislative branches); concerned organizations; business and industry.
Goal: Link social security payments to need, and cost of living increases to productivity growth.
Program area: Community development
Program-remedy: 1. Reduction of cost of living allowances (COLAs) to persons above the poverty line
2. Make social security benefits fully taxable, after generous allowances for subsistence and dependents.
Program-prevent: National program for strong growth of the economy, to allow maintaining of old age programs and benefits.
Cost of program: -
Beneficiaries: Taxpayers; wage earners; children.

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