Unless R.C. Longworth knows something about Social Security that President Clinton, Alan Greenspan, and Sens. Bob Kerrey (D-Neb.) and Daniel Patrick Moynihan (D-N.Y.) do not, his view that reform is “an unneeded solution to a non-problem” is mistaken. Mr. Longworth assures us that everything is rosy until at least 2037. Hardly. Beginning in 2015, payroll taxes will be insufficient to pay full benefits. From 2015 to 2075, Social Security’s deficit will exceed $21 trillion (in today’s dollars). But won’t the trust fund pay benefits until 2037? “Only in a bookkeeping sense,” the Clinton administration’s budget says. In 2025, for instance, the trust fund will redeem bonds worth $186 billion (in today’s dollars). To provide perspective, $186 billion in spending cuts would eliminate all funding for veterans’ services, natural resources and the environment, and education, training and social services. If this is a “non-crisis,” I would hate to see what Mr. Longworth considers really bad news.
We can meet Social Security’s deficit in two ways. Saving today, by investing payroll-tax surpluses ($911 billion over the next 10 years) in personal accounts that would build value and help pay future benefits. Alternately, do nothing now, but later raise taxes, increase the retirement age or cut cost-of-living adjustments, as Mr. Longworth suggests. These “reforms” would disproportionately harm the low-income workers and minorities who most rely on Social Security.
