Lawmakers seeking to reform the Social Security system must also look to the other means people use to fund their retirement, the House Ways and Means Committee chairman says.[@@]

Speaking at a breakfast today sponsored by the U.S. Chamber of Commerce, Rep. Bill Thomas, R-Calif., used the metaphor of a 3-legged stool in referring to the retirement tools of Social Security, pensions and private savings. Thomas argued all 3 must be considered when crafting retirement security policy.

The chairman compared the notion of considering each area separately to giving each leg of a stool to a different person and asking them to make the best possible leg they could.

“The legs may not be even, they may not match,” he said. “It doesn’t make a lot of sense to do it that way, and that’s why the committee and those others with jurisdiction decided to look at retirement security in terms of pensions, Social Security and private savings.”

The issue is growing increasingly important as more and more Americans move from a defined benefit pension to a defined contribution plan, he said.

“Since we are moving from a defined benefit to a defined contribution world, the so-called pension leg is looking a whole lot more like the private savings leg,” he said. “We can’t put together various packages without a conceptual framework guiding us in building the stool.”

On health care issues, Thomas said that the health insurance system faces a fundamental problem that developed during and after World War II in which employers began to offer fringe benefits to try to keep workers, rather than higher salaries.

“We developed a health care delivery system that still, notwithstanding all the attempts at changes, is based on first-dollar, third-party payment,” he said.

The result is “ignorant consumers” who do not shop for health care coverage in the same manner that they do for other products. “No other insurance is done like health care insurance,” he said.

Overall, however, the main issue of health care coverage remains increasing the number of people covered, Thomas said.

“The fundamental question is, is there a way to make sure more people are covered?” he said.

He added, however, that putting the burden of health care system onto the federal shoulder should not be seen as the answer.

“I believe there is a way to move towards universal coverage without having government involvement,” he said.