Face Social Security reality

If fixing Social Security were easy, it would be fixed by now. But if Americans, including politicians, persist in postponing the comprehensive reform this demographically challenged federal entitlement program requires, the fixes will become even more difficult.

New, yet predictable, evidence of the inexorable trends menacing Social Security was presented last week when the U.S. Treasury Department reported that the system faces a $13.6 trillion shortfall "over the indefinite future." Also indefinite is when this vexing topic will receive its just due from more of the 2008 presidential candidates.

President Bush's repeated failures to initiate Social Security reform entailing optional private accounts show the enduring political hazards of this issue. Indeed, Senate Majority Leader Harry Reid, D-Nev., dismissed last week's update from the Treasury as "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," adding: "Nobody should be fooled into believing that the only way to save Social Security is to destroy it with privatization or deep benefit cuts."

Yet the surest way to destroy Social Security is to stick with the status quo. The payer-to-beneficiary ratio remains in long-term decline, from 16-to-1 in 1950, to 3.2-to-1 today, to a projected to 2.1-to-1 in 2030. Earlier this year, the system's trustees warned that it will collect less than it owes by 2017 and use up its reserves by 2041. Medicare, another entitlement program on a crash course to financial ruin, is due to go into the red by 2019.

So despite Sen. Reid's rejection of the Treasury report, such periodic balance-sheet reminders serve an important purpose by presenting indisputable conclusions, including: Delaying reform adds to its ultimate cost. We can't economically grow our way out of this mess, and some combination of benefit reduction and tax hikes will be required to keep the system solvent.

Among the politicians daring to take on this challenge is Democratic presidential candidate Barack Obama. In a recent op-ed piece he wrote for the Quad Cities Times, the Illinois senator reiterated his opposition to even partial privatization, benefit cuts or raising the retirement age. However, Sen. Obama also presented, as "one possible option," the elimination of the current $97,500 income cap on taxable Social Security earnings.

Many Americans are rightly wary of the potential economic consequences of a 6.2 percent Social Security tax hike on all income over $97,500 — and a corresponding tax hike on the employers.

But at least Sen. Obama has the nerve to face Social Security's problems, calling for a new push to "unite Republicans and Democrats behind a sensible solution."

As far-fetched as that goal might sound, Treasury Secretary Henry Paulson last week hailed a growing recognition of Social Security reality on both sides of the political divide: "By focusing first on areas of agreement, I hope these issue briefs (to be issued by the Treasury over the next three months) will narrow the divide and spur further discussions of reform."

We hope so, too.