Monday, May 09, 2005


I and others have made this point before -- there´s no way that a private accounts system wouldn´t be very burdensome on small businesses.

The first chief administrator of the federal Thrift Savings Plan said Thursday that President Bush's plan for establishing personal accounts as part of a Social Security overhaul faces "overwhelming" practical challenges.
"The administration's plan for universal [individual accounts] is not feasible and it should not survive the process of responsible congressional hearings," Francis Cavanaugh, who served as executive director of the Federal Retirement Thrift Investment Board from 1986 to 1994, told the House Financial Services Monetary Policy Subcommittee.

Cavanaugh said there are "considerable dissimilarities" between the Bush administration's plan and the Thrift Savings Plan, which is often cited as a model for the proposed Social Security investment accounts.

While only the federal government administers the TSP, Cavanaugh said the Social Security individual account proposal would create administrative burdens for many types of companies, especially small businesses.

The costs of administering 401(k) types plans are quite high, and I´ve seen no suggested plan which would make a private accoutns plan anything but a massive burden for small businesses.