The Progressive Personal Account Reform Plan: The Official Score by the Chief Actuary of Social Security

Executive Summary

Up until now, establishment Washington has assumed that any personal account option for Social Security would involve at most 2 percentage points or so of the 12.4% Social Security payroll tax. But earlier this year, I authored a study published by IPI offering a progressive personal account option for Social Security Peter Ferrara, A Progressive Proposal for Social Security Personal Accounts, Institute for Policy Innovation, Policy Report 176, June, 2003 which involves a much larger personal account option, averaging 6.4 percentage points. That plan has now been officially scored by the Chief Actuary of Social Security regarding how it would impact Social Security, and in particular the long term financial deficits of that program.

The proposal would allow workers to shift 5 percentage points of the payroll tax into their own personal accounts, but on the first $10,000 of income that would be doubled to 10 percentage points. Benefits from the accounts would substitute for a portion of promised Social Security benefits, based on the degree to which each worker exercised the account option over his or her life.

The official score of this reform plan shows:

• The large personal accounts in the plan are sufficient to completely eliminate the Social Security deficit over time, without any benefit cuts or tax increases. That is because so much of Social Security’s benefit obligations are ultimately shifted to the accounts. The accounts, in fact, produce a permanent surplus in Social Security by themselves.
• The accounts achieve this not only with no benefit cuts or tax increases in Social Security. Over time, in fact, the accounts produce higher benefits and allow for tax cuts. Indeed, by the end of the 75-year projection period the Social Security payroll tax has been effectively reduced from 12.4% to 3.5%, the largest tax cut in world history.
• The reform also achieves the largest reduction in government debt in world history, by eliminating the unfunded liability of Social Security, currently estimated at $10.5 trillion.
• The transition is financed by 4 factors:

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  1. Short term Social Security surpluses projected until 2018;
  2. Reducing the rate of growth of Federal spending by 1 percentage point per year for just 8 years, and devoting those savings to the transition;
  3. The revenue feedback from increased saving and investment in the accounts due to taxation of increased investment returns at the corporate level, as developed by Harvard Prof. Martin Feldstein and former Sen. Phil Gramm for his legislative proposal;
  4. To the extent needed, the sale of excess Social Security trust fund bonds.

This transition financing burden is substantial, but quite manageable.

• With this transition financing, Social Security achieves permanent and growing surplus by 2029. Before that time an average of about $52 billion in surplus Social Security trust funds bonds are sold each year for 24 years, for a total of $1.25 trillion, all in today’s dollars. This represents the total net transition deficit under the proposal in constant 2003 dollars, after accounting for all of the financing provided under the reform.
• Even with the sale of the surplus trust fund bonds, the trust fund never falls below 145% of one year’s expenditures, with the official standard of solvency being 100%. After 2029, the trust fund grows permanently, reaching 12.5 times one year’s expenditures by the end of the projection period, or about $6.3 trillion in today’s dollars, far too much.
• Within 15 years after 2029, the reform produces sufficient surpluses to pay off all the bonds sold to the public during the early years of the reform. So this surplus completely offsets the net transition deficits in the earlier years of the reform, leaving the net deficit impact of the reform over the projection period at zero. Indeed, the reform goes on to produce in the later years substantial unused surpluses.
• After the bonds are paid off, the surpluses are used to reduce the payroll tax by 2.5 percentage points, and with 6.4 points on average going into the accounts, that leaves the payroll tax at 3.5 percentage points, the level needed to finance remaining disability and survivors benefits.

The obvious conclusion from the Actuary’s score is that reform proposals should focus on large personal accounts of this magnitude, without benefit cuts or tax increases. Such large accounts not only solve the problems of Social Security. They provide additional enormous advantages for working people and the nation as a whole, much more than smaller accounts would. At the same time, the transition financing burdens for such accounts are entirely manageable.

In his 2000 campaign, President Bush endorsed the idea of a personal account option for Social Security, putting it on the national agenda. For many years now, national opinion polls have shown the idea is broadly popular with the American public. Id., at 2-3. But up until now, establishment Washington has assumed that at most an option for only around 2 percentage points of the 12.4% Social Security payroll tax would be feasible.

Earlier this year, however, I authored a study published by IPI which offered much larger personal accounts, averaging 6.4 percentage points for each worker. Id. That plan has now been officially scored by the Chief Actuary of the Social Security Administration (SSA) and his staff regarding how it would impact Social Security, and in particular the long term financial deficits of that program. The score is embodied in an official memorandum by Social Security Chief Actuary Steve Goss, dated December 1, 2003, with accompanying tables. That official scoring memorandum can also be found on the IPI website at http://www.ipi.org.

Essentially, the proposal would allow workers to shift 5 percentage points of the payroll tax into their own personal account, but on the first $10,000 of wages each year that would be doubled to 10 percentage points. The total Social Security payroll tax is 12.4% of wages up to the maximum taxable wage base for each year, which is $87,000 this year. This total tax is split evenly between employer and employee. All changes in the reform plan would also be split equally between the employee and employer shares of the tax. This makes the proposal quite progressive, with lower income workers able to devote a higher percentage of their Social Security taxes to the account. The remaining portion of the payroll tax would continue to be paid by each worker and his or her employer into Social Security.

The funds in the accounts would be invested over the years tax-free. The accumulated funds would then be used in retirement to finance monthly cash benefits. Benefits from the accounts would substitute for a portion of promised Social Security benefits for each worker, depending on the degree to which each worker exercised the account option over his or her life.

At standard, long term, market investment returns, these accounts would be large enough to pay workers exercising the account option over their entire careers substantially more than Social Security promises, but cannot pay. Id., at 13-14. Indeed, the progressivity of the proposal mirrors the progressivity of Social Security, with workers at all income levels gaining about the same percentage over what Social Security promises, about two-thirds more. Consequently, for workers exercising the personal account option over their entire career, the personal accounts would replace all of Social Security’s currently promised retirement benefits, with higher benefits financed through the accounts.

The investments would be made through a social structure where workers would choose from a broad range of investment funds managed by major firms, approved and regulated by the government. The system would be backed by a safety net providing a Federal guarantee that workers would receive from the accounts at least what they would have been paid by Social Security under current law. Social Security’s disability and pre-retirement survivors benefits would continue to be paid through the current program, without change. This is not privatization, but a modernized social structure for retirement.

The SSA’s official score of this proposal is reviewed in detail below.

First, the score shows that the large personal accounts included in the reform proposal are sufficient by themselves, without benefit cuts or tax increases, to produce long term solvency in Social Security, with permanently growing surpluses. This is shown in Table 1’of the scoring results. That table shows the effects of the accounts by themselves, with no transition financing. The entire score assumes that the reform begins in 2005. Column 3 of Table 1’ shows that by 2055 the accounts alone would bring Social Security into surplus, and that surplus continues to grow year after year for the next 23 years, to the end of the 75 year projection period.

That result occurs because, as indicated above, workers exercising the personal account option are substituting the account for a proportion of their future promised Social Security benefits, based on the degree to which they have exercised the option over their lives. With workers likely choosing the personal account option overwhelmingly, over time the accounts would take over more and more of the benefit obligations of Social Security. Eventually, those obligations would be reduced so much through this process that the projected Social Security deficits would be eliminated entirely. Indeed, with the portion of the payroll tax that continues to flow into Social Security, a permanent surplus would be created.

As Table 1’ indicates, however, substantial transition financing is needed to continue to fund full benefits before 2055, with workers under the reform paying a substantial portion of their payroll taxes into the accounts, rather than Social Security. The reform relies on four factors to finance those transition deficits:

First is the short term Social Security surplus now projected to continue until 2018.

Second is the funds that would be obtained by reducing the rate of growth of total Federal spending by 1 percentage point from the current baseline each year for just 8 years, and devoting those savings to the transition. After those 8 years, Federal spending could go back to increasing at its old rate 1 percentage point higher, but now on a lower baseline from the 8 years of spending restraint, with that baseline enforced until all the elements of the reform are financed.

Third is the increased revenue that would result from increased savings and investment through the accounts, resulting from the taxation of corporate earnings obtained with that increased investment. This effect has been discussed extensively by Harvard Prof. Martin Feldstein, President of the National Bureau of Economic Research. Feldstein and former Sen. Phil Gramm developed an estimate of this effect working with Social Security Chief Actuary Steve Goss for Social Security reform legislation Gramm introduced in a previous session of Congress. That estimate methodology was simply applied to this reform score.

The final factor would be effectively to sell surplus Social Security trust fund bonds to cover any remaining transition deficits in the early years. In practice, this would involve redeeming the bonds to obtain the cash from the Federal government to continue financing Social Security benefits. The Federal government would obtain that cash by selling new zero coupon bonds to the public. Such bonds would not require annual interest payments, but would cumulate interest until the bonds and the interest were finally paid off out of later surpluses generated by the reform.

With these four transition-financing sources, as Social Security Chief Actuary Steve Goss states in the official scoring memorandum, “The Social Security program would be expected to be solvent and to meet its benefit obligations throughout the long range period 2003 through 2077 and beyond.” Memorandum From Steve Goss, Chief Actuary, to Peter Ferrara, Estimated Financial Effects of “The Progressive Personal Accounts Plan”, December 1, 2003, p. 1. This is shown in Table 1. Column 3 of that table shows that any deficit in the operation of Social Security is eliminated by 2029. Before that point, surplus Social Security trust bonds are effectively sold to cover any net deficit in the program each year, as described above. After that point, however, Social Security is in permanent financial balance, with a perpetual growing surplus in the Social Security trust funds. No more government bonds of any sort need to be sold after that to finance the reform.

Column 4 of Table 1 shows what happens to the Social Security trust funds under the reform, even with the redemption, or effective sale, of surplus Social Security trust fund bonds. That column expresses the Social Security trust fund balance as a percent of one year’s expenditures. The lowest point it ever reaches is 145% of one year’s expenditures in 2028, with the SSA’s standard for solvency at 100% of one year’s expenditures. Moreover, after 2028, permanent and growing surpluses in Social Security’s operation lead the trust funds to grow perpetually. By the end of the projection period, in 2078, the trust fund would reach 12.5 times one year’s expenditures, or about $6.3 trillion in constant 2003 dollars, adjusted for future inflation, as shown in column 5 of table 1a. That far more than Social Security could possibly need at that point.

Column 1 of Table 1a shows the funds obtained for Social Security from the restraint in the growth of Federal spending, as described above. Column 2 shows the funds obtained from the revenue feedback due to increased corporate tax revenues resulting from the increased corporate income due to investment of the new personal account funds

Column 3 of Table 1a shows that after 2028 these transition-financing sources produce a permanent and growing surplus that is no longer needed to finance any Social Security transition deficit. That surplus is used under the reform plan first to pay off all the publicly held bonds sold in the earlier years of the reform. Table A shows the amount of surplus Social Security trust fund bonds that would be sold in those earlier years under the reform plan. It also shows the annual net transition deficits under the reform plan after taking into account all of the financing sources involved in the plan. The Table was calculated from the tables provided in the official score. The amount of bonds that has to be sold to the public in constant dollars is calculated by adding the funds derived from the spending restraint in column 1 of Table 1a, and the funds derived from the corporate revenue feedback in column 2 of Table 1a, to the constant dollar cash flow deficit in column 4 of Table 1c, which includes the effect of the Social Security surpluses. The amount of bonds that has to be sold to the public in present value dollars is calculated by adding column 4 in Table 1d, which includes in present value dollars the revenues obtained for Social Security from both the spending restraint and the revenue feedback, to the present value cash flow deficit expressed in column 3 of Table 1c, which includes again the impact of the short term Social Security surpluses.

Table A shows that the average amount of bonds sold, and the average amount of the net transition deficit under the reform plan in constant 2003 dollars is $52 billion a year in each of the first 24 yeas of the reform, for a total of $1.25 trillion. In more methodologically sound present value dollars, discounted by the interest rate for each year in the future, the yearly average is $37 billion for 24 years, for a total of $891 billion. Adding present value dollars across different years is the most methodologically accurate because the figure for each year is discounted back to economically comparable values today.

Again, to emphasize, this $1.053 trillion in constant 2003 dollars, or more accurately $863 billion in present value dollars, is the complete net deficit impact under the reform plan, after taking into account all of the financing provided under the reform. Since the earlier net transition deficits are completely financed out of the later surpluses produced by the reform, the net deficit impact of the reform over the entire 75 year projection period is actually zero, again taking into account all of the financing provided under the reform plan. Indeed, in the later years the reform provides large and growing unused surpluses.

Moreover, the surplus in constant 2003 dollars starting in 2029, shown again in column 3 of Table 1a, is sufficient to pay off all of the previously issued bonds expressed in constant 2003 dollars, plus interest, within 15 years after 2028. Column 5 of Table 1d presents the surplus in present value dollars, and that is also sufficient to pay off the earlier issued bonds expressed in present value dollars as well, within 15 years.

After the trust fund bonds sold to the public are paid off, the continuing surpluses from the reform can then be used to reduce excess payroll taxes. This is shown in Column 8 of Table 1. The score begins the payroll tax reductions in 2055, and by the end of the projection period the tax has been reduced by 2.5 percentage points, shared by employer and employee. With 6.4 percentage points on average going into the personal accounts, the payroll tax has been effectively reduced from 12.4% to 3.5%, the largest tax cut in world history. The 3.5% remaining payroll tax is what is needed to finance the continuing preretirement survivors and disability benefits that Social Security would continue to pay under the reform as in present law.

Moreover, in addition to this tax reduction, the accounts would also provide much higher benefits than Social Security promises under current law, let alone what it can pay, as discussed fully in the original IPI study proposing the reform. Id., pp. 13-14. Indeed, the progressivity of the proposal mirrors the progressivity of Social Security quite closely, providing all workers at all income levels with roughly the same percentage net gain over currently promised Social Security benefits, about two thirds more at standard, long term, market investment returns. Id. That results because the returns on real capital investment are so much higher than the returns that can be paid on non-invested, purely redistributive, pay-as-you-go Social Security.

Consequently, reforms involving large personal accounts of this magnitude not only achieve permanent solvency in Social Security without cutting benefits or raising taxes. They do so while ultimately providing much higher benefits and much lower taxes.

The reform also produces the biggest reduction in government debt in world history. That is because along the way the reform eliminates the unfunded liability of Social Security, currently estimated at $10.5 trillion. Annual Report of the Board of Trustees for the Old-Age and Survivors Insurance and Disability Insurance Trust Funds, March 17, 2003, Table IV.B8. That is almost three times the current reported national debt.

Columns 6, 7 and 8 on Table 1b deal with the impact of the proposal on the unified budget. The key here is to recognize that these columns do not include the transition financing mechanisms discussed above. They do not include the effect of the spending restraint. They do not include the revenue feedback from higher corporate taxes due to increased corporate income. They do not even include the effect of the short term Social Security surplus. The official scoring memo explicitly says as much, stating “these projections do not reflect any potential change from reductions in the growth of Federal spending or from possible net increases in corporate taxes due to the individual account investments that are intended to occur as a result of implementation of the plan.” Memo from Goss to Ferrara, supra, p. 10.

These are not counted because while the SSA was willing to score the impact of such factors on Social Security financing, projecting the impact on total Federal spending, revenues and deficits was considered within the purview of the Office of Management and Budget, not SSA. SSA will project only the impact of changes in Social Security’s operations, like the personal account option itself, on the unified budget. The short term Social Security surpluses were not counted here because using them to finance Social Security benefits when needed is not a change from current law and for the purposes of Social Security’s impact on the unified budget they are considered an internal transfer. But the surpluses would reduce the resulting transition deficit from the reform because they would be immediately available to help close the transition financing gap.

What is most important is to recognize what the impact of these transition-financing mechanisms would be. Column 6 of Table 1b addresses the impact of the reform on the unified budget cash flow. If all the transition financing mechanisms were included in this column – the spending restraint, the revenue feedback, and the short term Social Security surpluses – these annual cash flow deficits would be reduced to the amounts shown in Table A. That Table again shows the amount of Social Security trust fund bonds that would have to be sold each year to cover remaining deficits in Social Security after the above transition financing mechanisms.

Of course, utilizing the short-term Social Security surpluses for the transition financing means they can’t be used to finance other, non-Social Security spending, as has often happened in the past. But since the 2000 campaign, President Bush’s economic program has explicitly included utilizing these surpluses for personal account Social Security reform. Moreover, the stated policy of Congress is to use these surpluses for Social Security as they were originally intended, not the rest of the budget. In addition, these surpluses will soon start to dwindle, and in less than 15 years they would not exist under current projections. So Congress will soon have to get used to financing its general spending by other means in any event.

Column 7 in Table 1b shows the impact of the reform on debt held by the public if the entire reform was financed by issuing debt, again without considering the impact of the proposal’s spending restraint, revenue feedback, or use of short term Social Security surpluses. If those factors were considered, then the initial impact on debt held by the public would be to increase it solely by the amounts shown in Table A, which cumulate again to $1.25 trillion in today’s dollars, or $891 billion in present value terms. This assumes that, as mentioned above, the bonds sold are zero coupon bonds as the reform plan provides. These bonds again do not pay annual interest, but cumulate the interest until both the principle and the interest on the bond can be paid off out of the later surpluses generated by the reform. Otherwise, the interest on the bonds each year would have to be paid in cash, or additional bonds would have to be issued each year to borrow the money to pay the interest. But that impact would soon be eliminated by the paying off of those bonds with the later surpluses of the reform, leaving the ultimate impact on debt held by the public at zero. As will be discussed shortly, the proposal is, indeed, likely to ultimately reduce debt held by the public.

Column 8 adds the annual interest on the increased public debt in column 7 to the cash flow deficits in column 6 for a total budget impact of the reform, again without the transition financing mechanisms of the reform. If these transition financing mechanisms were included, however, then the amounts in column 8 would again be no more than the totals in Table A. This again assumes that the bonds sold to the public would be zero coupon bonds, as discussed in footnote 14.

Moreover, the reform plan proposes that the net transition deficits each year remaining after the impact of the short term Social Security surpluses, the spending restraint, and the revenue feedback, which have to be covered by issuing bonds to the public, be considered off-budget for purposes of calculating the unified Federal budget deficit. The bonds sold to the public would be kept in a separate off-budget account slated to be paid off in full by the later surpluses produced by the reform. In this case, Column 8, the net impact of the reform on the Federal budget deficit, would be reduced to zero for each and every year.

This budget scoring policy has been supported by a number of top economists, including Martin Feldstein. It is justified because, as Milton Friedman has argued, selling the Social Security trust fund bonds, or their equivalent, would just involve publicly recognizing debt the government already owes through Social Security and its unfunded liabilities. Indeed, on our current course, we would just effectively start selling these bonds a few more years down the road anyway, to continue financing promised benefits. The reform consequently does not add to real government debt, but instead dramatically reduces it, ultimately eliminating the total unfunded liability of Social Security, three times the reported national debt. Also, the reform overall does not drain national savings, but rather likely increases it, as far more is saved through the personal accounts than is borrowed through the bonds to finance the transition, and those bonds are ultimately paid off in any event. So reporting the sale of the Social Security trust fund bonds as reflecting an on-budget increase in the deficit makes no economic sense.

The official score helpfully includes columns 9 and 10 on Table 1b to confirm that the transition financing mechanisms would be sufficient to cover the transition deficit resulting from the reform plan. Column 9 presents the cumulative funds that would result from the spending restraint. Column 10 presents the cumulative funds resulting from the revenue feedback. They can be contrasted with column 7, which effectively represents the cumulative net transition deficit under the reform plan that needs to be covered with transition financing.

Columns 9 and 10 show that by 2036 these 2 transition financing sources alone would be sufficient to pay off all previous annual transition deficits. In that year, the cumulative savings from the spending restraint in Column 9 plus the cumulative new funds from the revenue feedback in column 10 are greater than the cumulative transition deficits in column 7.

Moreover, columns 9 and 10 show that the funds from these transition financing sources continue to grow after that. These funds could be used to reduce outstanding public debt overall, to cut other taxes, to adopt new spending programs, or some combination of these three. This is in addition to the effect of the reform in eliminating the unfunded liability of Social Security. Consequently, the reform over the long run potentially involves a massive reduction in government debt.

As discussed at the outset, the reform involves a continuing safety net with a minimum benefit guarantee that all workers would continue to receive through the accounts at least as much as Social Security would pay them under current law. If the benefits an account would pay along with any continuing Social Security benefits do not equal at least what Social Security would pay the worker under current law, the Federal government would pay the worker the difference. The official score includes an estimate of the cost of the guarantee to the government, which is shown in column 3 of Table 1b. These are the amounts the SSA estimates the government would have to pay each year to make good on this guarantee under the terms of the reform proposal.

The estimated costs of the guarantee are quite modest. They grow as the savings and investments in the accounts, and the benefits they are expected to finance, grow. Reaching only $10.5 billion in 2022, they climb slowly to $50 billion in 2047 and $60.1 billion in 2069. These numbers represent only about 3% of the Social Security benefits that would otherwise be paid each year under current law. These costs were fully included in the official score of the reform’s costs and transition deficits, and were financed by the transition financing mechanisms discussed above.

However, the costs of the guarantee should not be even this high. Long term, real, market investment returns are 7% or more for stocks and 3 to 3.5% for corporate bonds. Id., pp. 13-14 In contrast, Social Security offers most young workers today a real return around 1% or less. For many it would be zero or even negative. Id. That gulf is so large that it is extremely unlikely that investment performance of the accounts would be so poor over an entire adult lifetime as to leave workers with even less than current law Social Security would have paid. This is especially true since the account investments would be conducted through a government supervised and regulated structure of major investment firms competing for personal account business. The investment funds sponsored by these firms are quite unlikely to fall significantly below market returns for an extended period of time.

With this generous minimum benefit guarantee, the official score estimated that 100% of workers would ultimately exercise the personal account option. That is because workers would have nothing to lose in doing so, as they are guaranteed to receive at least what Social Security would pay under current law. Yet, if the accounts do deliver as expected and provide much greater returns and benefits than Social Security promises, workers will enjoy major gains

Moreover, with the minimum benefit guarantee, the SSA also estimated that workers will choose to invest more heavily in stocks rather than in bonds. That is because stocks offer workers higher returns over the long run, and the guarantee ensures workers will get at least what Social Security would have paid under current law regardless of any stock market downturn. This is also highly beneficial for workers, for they are quite likely to gain even more over Social Security promised benefits by investing more heavily in stocks.

The official score estimates that workers will invest 65% in stocks and 35% in bonds, with stocks earning a real return of 6.5% and bonds a real return of 3.5%. The official score also estimated administrative costs of 25 basis points, for a total net real return to the account investments of 5.2%. While the 65%/35% ratio of stocks to bonds was actually specified in the guarantee for ease of scoring purposes, the easing of that restriction would likely leave workers gravitating to even higher percentages of stocks, ultimately producing even higher returns and benefits through the accounts.

The official score included in Table 2 et. seq. projections of what would happen to Social Security financing under the reform plan if the accounts earned much lower investment returns than the SSA Chief Actuary assumes based on historical investment returns. Those projections assume the accounts would only earn a net real yield of 2.75%, just over half the long-term standard market investment returns. As Goss states in the official scoring memorandum, “The likelihood of having such a low average yield for a period of several decades seems extremely low.” Memo from Goss to Ferrara, p. 11.

Even with these unrealistically low returns, full Social Security solvency would still be achieved simply by extending the period of spending restraint reducing the growth of Federal spending each year by 1 percentage point below current trends, for an additional 3 years, or a total of 11 years, from 2005 until 2016. In this case, however, the reform would not produce enough surpluses to pay off all bonds sold to the public to cover remaining net transition deficits each year, or to reduce Social Security tax rates further. However, these results could still be achieved by extending the period of modest spending restraint still further, though the period necessary to achieve these results was not calculated.

Reform proposals should focus on large personal accounts of this magnitude, without benefit cuts or tax increases of any sort. Such large accounts not only solve the problems of Social Security, without benefit cuts or tax increases. They provide additional enormous advantages for working people and the nation as a whole, much more than smaller accounts would. At the same time, the transition financing burdens for such accounts are entirely manageable.

With large personal accounts able to do the job, and provide so much more in benefits to boot, including reductions in future Social Security benefits in reform proposals makes no sense. That would just remove the focus on the personal accounts and their positive features. Opponents of personal accounts would focus their fire on the benefit reductions, and blame them on the accounts. The effect of the long-term benefit reductions would be grossly exaggerated. Why hand opponents of reform such an opportunity to kill the whole effort and effectively discredit personal accounts in the process?

Indeed, why pursue a needless and politically counterproductive debate over what future Social Security benefits should be when with large personal accounts, those future benefits would never be paid anyway? Workers in the future would instead be receiving much larger benefits through the personal accounts.

Moreover, any proposal to eliminate future Social Security deficits with large future benefit reductions would only invite a tax increase. Democrats and liberals will insist on large tax increases covering at least half the deficit. Their price for agreeing to the benefit cuts will then also include dropping the personal accounts. Would Congressional Republicans really reject this offer of bipartisan peace on this issue, especially after getting beat up on the benefit cut issue? One of the fundamental advantages of personal accounts is that they allow advocates to stay away from this benefit cut/tax increase swamp.