May 21, 2014

Addressing the Real 'Retirement Crisis' Through Sustainable Social Security Reform

Testimony Before the Subcommittee on Social Security, Pensions, and Family Policy
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Good morning, Chairman Brown, Ranking Member Toomey, and Members of the Subcommittee. Thank you for inviting me to testify today.

My name is Jason Fichtner, and I’m a senior research fellow at the Mercatus Center at George Mason University, where I research fiscal and economic issues, including Social Security. I am also an affiliated professor at Georgetown University, Johns Hopkins University, and Virginia Tech, where I teach courses in economics and public policy. Previously I served in several positions at the Social Security Administration, including Deputy Commissioner (Acting) and Chief Economist, and in those capacities one of my responsibilities was to lead the agency’s financial literacy efforts. All opinions I express today are my own and do not necessarily reflect the views of my employers.

I’d like to begin by thanking Chairman Brown and Senator Toomey for the leadership you provide this committee to ensure that important public policy issues involving Social Security and retirement security get the attention and debate they deserve and also to ensure that ideas and viewpoints from all sides are aired in a collegial and respectful manner. It is truly a privilege for me to be here testifying before you today.

My testimony focuses on two key issues: first, the extent to which we’re actually facing a so-called “retirement crisis,” and second, how the current structure of the nation’s largest retirement program, Social Security, is contributing to the problem by providing dis incentives to work and save.

From this discussion, I hope to leave you with the following takeaways:

1. Painting all Americans with the broad brush of a “retirement crisis” creates an incomplete picture of
the true financial landscape faced by America’s future retirees.

2. The narrative of the “retirement crisis” leads us to look toward greater dependence on—and the expansion of—government programs such as Social Security, which are already facing severe financial problems.

3. And Social Security reforms should not exacerbate existing problems—such as problematic incentives. Reforms should focus on encouraging increased US savings, labor-force participation, and economic growth.

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