President Bush pushes for his Social Security reforms during a town-hall style meeting at the Westfield, N.J., armory, March 4, 2005. Lisa Engler, left, a mother five, told Bush that she was worried about Social Security for her children. (AP/J. Scott Applewhite)
As the president returned from Europe and Congress from recess, the Social Security reform debate began in earnest. Both Republicans and Democrats said most of their constituents were telling them the same thing recent polls have been reporting: most Americans still need to be convinced that changes in Social Security must be made soon. The White House announced that the president and members of his cabinet would blanket the country to generate support for changes. Democratic leaders in the Senate began a two-day tour of major cities, to generate opposition.
Everyone agrees on one set of facts:
Fewer and fewer workers are paying into the system, and more and more people are taking money out of it. Especially with the baby boomers, more people will be reaching retirement age and living longer. Social Security will pay out more than it takes in from payroll taxes as early as 2018 -- 13 years from now.
Everyone also agrees that for workers 55 or older, nothing should change. But to prevent Social Security from going bankrupt over the next 40 or 50 years, President Bush says younger workers should have the option of investing a portion of their payroll taxes in private investment accounts. The president says he is open to other ideas, and some that have been suggested include:
Raising the retirement age
Stopping planned increases in benefits
Joining the panel to discuss the issue of how much change is needed and the proposals on benefits and taxes are Holman Jenkins, a columnist and member of the editorial board and Edward Crane, president of the Cato Institute and a longtime advocate of changing the Social Security system.
"Can we at least all agree as a starting point that this is a problem that we're going to have to face as a society in our political system sooner or later? What happens if we do nothing? What choices do we confront?"
"Voters and their representatives are going to have to deal with this. A Congressional Budget Office statistic estimate from 1998 was that it was going to take 11 trillion dollars of tax increases just to get you from 2030 to 2040. Ten years, 11 trillion dollars of additional taxes Americans would have to pay to meet the benefits of Social Security and Medicare."
"We're now at the point where 20 or more million people are over 70. In 15 years, some 47 million people are going to be over 70, a virtual doubling of the number. There are going to be fewer workers to pay for those retirees. Since we have a pay-as-you-go system, where the workers from one month to the next pay for the retirees, the current set-up is not going to produce enough money unless it changes."
"I agree we have a financial crisis here. But it seems to me that even if you had solvency, even if we didn't have the demographic problems that have created this deficit, the right thing to do is to create personal accounts, private accounts."