Social Security

One of the reasons the Bush Social Security plan is dying is that the public instinctively knows it is not being told the truth. Here is a prime example:

The President Giveth And The President Taketh Away.

According to the 2005 Report of the Social Security Trustees, the Social Security system currently has a deficit of $4 trillion. To pay benefits for the next 75 years, the government needs $4 trillion more than it will collect in payroll taxes and interest over that period. How should the government raise that $4 trillion? The conventional wisdom says that we should either raise Social Security payroll taxes or cut Social Security benefits, but that's accounting nonsense. And it is keeping us from modernizing the Social Security system.

What is so irritating to this Social Security taxpayer is that l have, in effect, overpaid my Social Security contributions since 1983 in order to build up the trust fund. The President insults me and other contributors by implying that the funds are tied up in worthless Treasury bonds, or lOUs. That's not what we were told when asked to dig deeper into our pockets. Moreover, if the objective of Bush's remarks is to prepare the way for a default on these Treasury securities, one wonders if he knows what he will do to the bond market and the pension funds that hold Treasury bonds: he is campaigning to discredit any Treasury bonds (and any corporate bonds, since they constitute lOUs, too).

We need a simple, easily articulated solution to the Social Security crisis. Let there be no doubt that there is a crisis. Some people have suggested that the solvency problem is not as serious as others claim. That may be true, but the President is currently traveling around the country telling the American public that there is a serious problem. That in itself is a crisis.

Because of the nature of the crisis, it can only be resolved by a solution that is relatively simple and can be easily explained to the public. It is also essential that it be a positive approach. It is not enough to show what others are doing wrong or should not do in the future. This crisis can only be solved by a positive program of what can be done.

I wish to build on ideas from other members:

• Social Security is not in crisis today
• Solutions are available that build on the current system and do not require radical change
• Social Security policy should be considered in the context of the total retirements picture (and three legged stool)

This is a critical time for the retirement security of Americans as Social Security is under attack at the same time that employer plans have declined and are suffering from an adverse regulatory climate. The decisions that policymakers make today will be important for decades to come.