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Treasury sees $13.6 trillion Social Security shortfall
Tuesday, September 25, 2007

By MARTIN CRUTSINGER
ASSOCIATED PRESS

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."

Copyright © 2007 North Jersey Media Group Inc.