Posted on 09/24/2007 3:40:18 PM PDT by decimon
WASHINGTON - The Bush administration said in a new report Monday that Social Security is facing a $13.6 trillion shortfall and that delaying reforms is not fair to younger workers.
A report issued by the Treasury Department said that some combination of benefit cuts and tax increases will need to be considered to permanently fix the funding shortfall. But White House officials stressed that President Bush remains opposed to raising taxes.
Treasury Secretary Henry Paulson said he hoped the new report would help find common ground on the politically divisive issue, but a key Democrat charged that the administration will still try to fix Social Security by imposing sharp benefit reductions.
"The administration's new report is a reminder of President Bush's determination to not only privatize Social Security but to make deep cuts in the benefits that American workers have earned," said Senate Majority Leader Harry Reid, D-Nev. "Nobody should be fooled into believing that the only way to save Social Security is to destroy it with privatization or deep benefit cuts."
Bush had hoped to make Social Security reform the top domestic priority of his second term. He put forward a Social Security plan in 2005 that focused on creation of private accounts for younger workers, but that proposal never came up for a vote in Congress with Democrats heavily opposed and few Republicans embracing the idea.
The Treasury report put the cost of the gap between what Social Security is expected to need to pay out in benefits and what it will raise in payroll taxes in coming years at $13.6 trillion.
It said delaying necessary changes reduces the number of people available to share in the burden of those changes and is unfair to younger workers. "Not taking action is thus unfair to future generations. This is a significant cost of delay," the report said.
In another key finding, the report said: "Social Security can be made permanently solvent only by reducing the present value of scheduled benefits and/or increasing the present value of scheduled tax increases."
The paper went on to say: "Other changes to the program might be desirable, but only these changes can restore solvency permanently."
While the language of the Treasury report seemed to indicate that the administration would consider raising taxes along with reducing benefits as a way to deal with the funding shortfall, the White House was quick to reject that possibility.
"The president is not advocating for tax increases or benefit cuts," said White House spokesman Tony Fratto.
"Everyone understands that the choices available in the current structure of Social Security, that absent reform, tax increases and benefit cuts are inevitable," Fratto said. "That's why the president believes it makes more sense to reform the program sooner than later."
Paulson, Bush's point person on Social Security reform, said he has had a number of discussions with members of Congress from both parties over the issue of fixing the problems in Social Security with the looming retirement of 78 million baby boomers.
"While differences over personal accounts and taxes dominate the public debate over this issue, in my conversations I found that there are many other things on which people agree," Paulson said in a statement accompanying the issues report.
"By focusing on areas of agreement, I hope these issue briefs will narrow the divide and spur further discussion of reforms," Paulson said.
While Democrats have fought to protect current benefit levels, Republicans have been adamant that taxes should not be raised to cover the Social Security shortfall.
Phil Swaigel, Treasury's assistant secretary for economic policy, told reporters that the plan was to issue about six issue briefs on Social Security over the next three months. But he said it was "unclear" at the moment whether the papers would lead to a new push to get an overhaul program through Congress next year.
Many believe such an effort would be highly unlikely to gain success in 2008, a presidential election year when one-third of the Senate and all House members will also be facing re-election.
Paulson, however, has said even if he is not able to achieve an agreement during the short time the current administration will be in office, he hopes to lay the groundwork for the next administration and a new Congress to tackle the problem.
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Start a home business!
With all due respect, W should just keep his mouth shut and work on the WOT exclusively. If he sneaks a win out of that one in the next eight months, all is forgotten. Otherwise, all extraneous comments are just freaking unwelcome. JMHO.
but, but, what about the trust fund ;-)
If the government stops borrowing the money and pay back what they have borrowed, you should get your SS.
Pull the plug and let it die.
Well I agree with Bush that Social Security needs to be “reformed”,however I disagree with one of his “reform” ideas. The one about putting 20 MILLION illegals who never payed in a dime on the system !!!
Too late, W. You blew your political capital with handouts and amnesty, and now we have a Dim congress so forget the benefit cuts. Sad to say, but focus on what is possible, not something that has a snowball’s chance in heck. Looking for your legacy here is a fool’s paradise.
It’s mine! Mine!
Another indirect way to pay is a lower standard of living with inflation. If the dollar continues its slide, foreign goods will become very expensive, especially energy produced elsewhere. Large reductions in the value of the dollar will cause inflation at every level and lessen the value of retirement savings and social security benefits.
I am pessimistic about the entitlement situation especially with Medicare. I do not see how our standard of living can be maintained with the huge increases in government spending for entitlements.
I don't know if that's most likely but it is most logical.
the only way out of this is to grow the economy by cutting the corporate tax. It is much too high compared to the rest of the world.
I got an idea for fixing Social Security.
Just END it. Today. No refunds.
But the point is,that Bush DIDN’T accomplish any SS reforms but was still willing to sign 15-20-25 million illegals onto it anyhow !!!
Never! You must share and sacrifice to provide for Bush’s amigos. Whether in or out of the shadows, they must be provided for.
Just END it. Today. No refunds.
So then, I should get screwed today as thanks for being screwed all those yesterdays?
Social Security would have been easy to fix years ago. If the monies collected had actually been put into a massive account that earned interest instead of them spending every dime elsewhere and putting in IOU’s, there would be tons of money from compound interest alone.
Of course that is just too simple for our ‘leaders’.
I wants it!!
My precious!
Yes, my plan has two parts:
1. U.S. Government stops writing all SS checks today.
2. U.S. Government stops deducting all SS taxes today.
Wait till you hear my plan for Welfare and Medicare.
Note: I am not running for office :)
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