Social Security 2008 -
Questions and issues for discussion in connection with Topic 4

Submit by Feb. 6

1. Issues or questions arising out of the preceding problems and illustrative situations

Which of the areas addressed by the preceding problem scenarios (and my responses) would you most like to pursue in discussion?

2. Incentives for marriage or divorce

Do you see situations other than those presented in the problems where the current spouse benefit structure provides a significant incentive for marriage on the one hand or staying out of marriage or divorcing on the other? In the space below I would like you to sketch such a scenario, one that you think it might be useful for the full class to discuss.

3. Reform

Bills to change the current spouse benefit system are regularly introduced in Congress, and similar proposals are frequently bundled with Social Security reform plans.

One bill introduced in a recent Congress (let's call it Bill A) got so far as to pass the House (unanimously). That proposed amendment would have increased monthly payments to those widows and widowers whose survivors benefits are currently reduced because their deceased wage earner spouses took periods of pre-Full-Retirement-Age Old Age Insurance before dying. (The early retirement reduction carries forward to the survivor.) Under this bill, which stalled in the Senate, a surviving spouse would have his or her benefits based on the wage-earner's full PIA, notwithstanding a period during which the latter drew reduced Old Age Insurance.

Another other spouse benefit proposal (let's call it Bill B), sponsored by Congressman Robert Matsui of California, would guarantee a widow or widower benefit equal to 75% of what the couple's benefits would have been together had they both lived to Full Retirement Age.

A third proposal (which would be Bill C) would allow surviving spouses and surviving divorced spouses to remain eligible notwithstanding remarriage (prior to 60) so long as they had been married to the deceased insured worker for at least 10 years.

What is your response to these proposed changes? Bill A, it is estimated, would improve benefits for 120,000 individuals and cost $1 billion over the next 5 years. Bill B would increase payments to as many as 4.7 million and cost a lot more. I've seen no estimates on Bill C.

If you oppose all three proposals because you would favor some other change or changes in the current treatment of marriage by Social Security, please provide a brief description.

Peter W. Martin

Note: Like all the other "Framework for Discussion" forms this is not a quiz. While I expect everyone in the class to respond, your response will not be graded. This is merely a way to begin discussion of a topic knowing the full range of initial views held by members of the class.