1994-1996 Advisory Council on Social Security

Report on Advisory Council Meetings on
April 13,1996

Members Present:
Robert Ball, Gerald Shea, Marc Twinney, Edward Gramlich, Ann Combs, Joan Bok, Sylvester Schieber, Edith Fierst, and Carolyn Weaver.

The meeting began with a presentation by Steve Goss (OACT) on a comparison of the financial effects for the proposals being considered by the Advisory Council. The material contained both cost data and moneysworth data.

There was an extensive discussion of the meaning of the data and the way the data was derived. The members made numerous requests for additional data and for further explanations of the existing data. For example: Mr. Ball requested data on steady workers with earnings above average, but below maximum; Ms. Weaver requested moneysworth data based on a consistent 2.3 percent real interest rate (rather than historical rates which were atypically high for much of the babyboomer's careers); Mr. Schieber requested an "optimistic scenario" for the PSA plan which would show a higher real interest rate; Mr. Twinney asked that the transition costs for the PSA plan be shown in a different way or backed out somehow; Chairman Gramlich requested further information on replacement rates; and Mr. Shea asked for further breakdowns and\or clarifications on the administrative costs for the various plans.

Steve Goss will provide the requested information as soon as possible, but noted that work could be slowed due to other work he was doing with respect to the upcoming Trustee's report. In response to a request from Mr. Schieber, he said he would also get in touch with Chris Bender to try to discover why OACT estimates are more pessimistic than Bender's estimates with respect to the PSA plan. (Chris Bender was on contract with the Council to provide certain analytical data.) It was noted that Bender's contract with the Advisory Council has expired, but Steve thought he would still be willing to discuss the possible reasons for the differences.

The Council then turned to a discussion of the report. (They did not discuss specific parts of the report, but only noted broad general issues.) Many members noted the need for a significant expansion in the analysis of the various plans. Chairman Gramlich noted that he intended to add this discussion, but needed to wait until all of the data was received from OACT.

The Council was concerned about the original plan to publish just the findings and recommendations part of the report and to follow by a reissued report which would contain the technical panel reports and all of the background information as well as the findings and recommendations. (This decision was made to expedite the printing of the report.) They decided instead, to issue a two volume report. One volume would contain the technical panel reports and background information and the other would contain the findings and recommendations. They would be issued concurrently. Since the technical and background materials are already available they can go to the printer while the Council is finishing the findings and recommendations section. In this way, the issuance of the full report should not be delayed.

The Council discussed the rough timing of the report. The Chairman noted that it should take about a month for a final report to be prepared and commented on by the members. After that, members will have 10 days to provide final supplementary statements and when they are received the report can go to the printer. Chairman Gramlich noted that this schedule would be possible only if the members agreed to "close off" their requests for numbers once OACT has supplied what has already been requested. The members agreed that if they do not "close off" requests they will never be finished.

The meeting adjourned. The Council does not anticipate holding any additional meetings.