Opting out of Social Security

Brian Doherty from the July 1997 issue

While being allowed to opt out of Social Security is doubtless still a long way away, Oregon is taking the first tentative steps toward downsizing the failing federal program to the state level.

In early May, Oregon's state House passed a resolution by a 31-22 vote requesting that its national congressional delegation vote to allow states to opt out of the federal system and design their own retirement plans. (Oregon's Senate passed the resolution 20-8 in February.)

The resolution is non-binding. But as Steve Buckstein, president of the Cascade Institute, a Portland-based free market think tank, points out, it marks a political willingness to go on the record with the notion that Social Security is doomed. Buckstein says his organization will be ready with a plan for a privatized Oregon-based retirement system if the state is given an opt-out right.

Oregon is a leader in getting federal waivers from national programs, and is already managing its own versions of federal Medicaid and welfare programs.