1 In April, 1996, the Institute published the remarks of Stanford economist John B. Shoven. See Institute
Memorandum to Pension Committee No. 14-96, dated April 26, 1996.
June 5, 1996
TO: PENSION COMMITTEE No. 23-96
SOCIAL SECURITY TASK FORCE
RE: ICI PUBLISHES SECOND PAPER ON SOCIAL SECURITY REFORM
______________________________________________________________________________
The Institute has published a second paper commenting on the Social Security reform
debate.1 The paper, written by Professor Lawrence J. White of the Stern School of Business at
New York University, examines the proposal that the federal government invest a portion of
the Social Security Trust Fund assets in the equities markets. It appears likely that such a
proposal will be one of three proposals anticipated in a final report from the Social Security
Advisory Council, which is considering how to address the Social Security programs long-
term funding problems.
Professor White identifies some of the difficult issues raised by the proposition that the
Trust Funds be invested in the private securities markets, including who would bear the risk
related to the investments, what political influence might be exercised in the choice of
investments, and the impact of governmental ownership of a substantial amount of stock in a
number of large U.S. corporations. A copy of the paper is attached.
We will keep you informed of developments.
Russell G. Galer
Assistant Counsel - Pension
Attachment