The Social Security mess

As with everything else Congress and the president do, Social Security reform has to be put in context. While it is true that Social Security faces a crisis, despite the best efforts of opponents to debunk that notion, the cost of reform should not be considered in a vacuum.

On Tuesday, the Congressional Budget Office released projections showing an $855 billion federal deficit over the next 10 years. Significantly, that doesn't include the ever-burgeoning cost of the war or of a new Social Security plan that would allow younger workers to invest in private retirement accounts.

Does anyone really think it makes sense to solve one fiscal crisis by adding significantly to a larger fiscal crisis?

The president and other supporters of reform are quick to note how the aging U.S. population will bring trillions of dollars in unfunded debt to Social Security over the next several decades. But it appears this is only a fraction of the real problem. The cost of all government services will lead to an unfathomable level of debt during that same time period. After all, if the population of retired workers is going to be so much larger than it currently is, the burden on young workers won't merely be to pay for their elders' retirement benefits. It will be to pay for everything the government does, from waging war to providing Medicare.

Why does no one in Washington appear willing to talk in these terms? Is it because total tax reform and a sober, dry-eyed analysis of the facts would be political suicide in the age of myopic, fast-talking special interests? That may seem like a poor excuse years from now as the nation's economic might begins to groan under the weight of government.

But so long as everyone is focused on Social Security, here are a few things to consider:

First, the program is a pathetically inadequate retirement benefit. Any American who plans to retire on Social Security alone has to be prepared to spend his or her twilight years in poverty. The intense debates over this entitlement seem horribly out of proportion to what it actually provides.

Second, while some claim Social Security is not in crisis because Congress decided in 1983 to begin accumulating a surplus in treasury debt to cover the shortfall that now looms, that ignores some obvious and painful realities. The money in this account — which will reach about $3.3 trillion by 2017 — has been spent. It exists as a bunch of IOUs and still has to come from somewhere. In fact, the much-vaunted Clinton budget surpluses of the late 1990s were never truly surpluses at all because they relied on spending the money being set aside for Social Security.