Social Security: Transition Costs 

Social Security: Transition Costs

Unbelievably, this is actually on the White House web site (via Atrios):

THE PRESIDENT: Yes, she's asking about the cost of the transition. It's estimated about $600 billion over a 10-year period of time to get the personal accounts started on the -- the way we've suggested they grow. It's a good question.

Yes, ma'am.

Q -- really understand how is it the new plan is going to fix that problem?

THE PRESIDENT: Because the -- all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised.

Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the -- like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate -- the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those -- if that growth is affected, it will help on the red.

Okay, better? I'll keep working on it. (Laughter.)