The Battle Over Social Security

The question about what to do about Social Security has no easy answer. Democrats don’t like Republicans saying there’s a problem with it, and Democrats don’t like the idea of meddling with a system that was put in place way way back during FDR’s New Deal.

Critics of President Bush’s plan to create personal investment accounts in Social Security say he is exaggerating the program’s funding problems to boost public support for his idea.
“Social Security is like a car with a flat tire,” said Peter Orszag, an economist at the liberal Brookings Institution and adviser in the Clinton White House. “There is a problem. We need to fix the flat tire. But we don’t need to replace the car.”
But David John, a senior analyst at the conservative Heritage Foundation, said the funding problem is real, especially for younger workers. “Every day we delay raises the cost of a repair to Social Security,” he said.
The retirement system faces a projected $3.7 trillion, 75-year shortfall. Bush wants to overhaul the program to let younger workers divert some of their Social Security payroll taxes to personal accounts. But that alone won’t fix the problem and could require upfront costs of $1 trillion to $2 trillion over 10 years.

I don’t expect this problem to be dealt with for a long time. If both sides can’t recognize that’s a problem, then we’re in trouble.