WASHINGTON – Vice President Dick Cheney (search) warned Sunday that if a fix doesn't come soon to the Social Security program, the system won't be able to sustain itself over the long run.
"The real cost over time is doing nothing. Because if we do nothing, then the system's going to go belly up. It's going to go broke. It won't be there for today's younger generation," Cheney told "FOX News Sunday."
Social Security (search) reform is one of the most contentious issues between Democrats and Republicans in Washington, D.C., right now. President Bush has proposed allowing younger workers to put part of their payroll taxes into personal investment accounts.
Democrats say the plan, which requires money to be diverted out of the system over the short haul to pay for the reforms, will aggravate, not solve the problem.
But Cheney said that the sooner reforms are undertaken, the cheaper the cost of change will be in the long run.
"We're going to borrow $758 [b]illion over the next 10 years to set up the personal retirement accounts. We think that's a manageable amount ... Trillions more after that," Cheney said, acknowledging that the personal accounts will help younger workers but will not solve all the problems of solvency.
"The basic fundamental structure of Social Security, separate apart from the personal accounts, has to be changed. It's got to be reformed, or it will go belly-up in 2040-something," Cheney said, adding that other reforms, such as price-indexing, wage-indexing and raising the retirement age have all been proposed.
"We think everything ought to be on the table, and we ought to be able to look at all those options and come up with a package that will make Social Security financially sound going forward and, at the same time, allow this basic transformation" to personal accounts, he said.
As for the 2006 fiscal year budget Bush is proposing on Monday, Cheney said 150 federal programs could be cut or eliminated.
It's not something we've done with a meat ax, nor are we suddenly turning our backs on the most needy people in our society," Cheney said. "We are being tight. This is the tightest budget that has been submitted since we got here."
Cheney said the budget proposal increases spending on the military and homeland security, but overall keeps spending below next year's expected 2.3 percent increase in inflation.
Bush designed the roughly $2.5 trillion spending plan for 2006 as a response to a string of record federal deficits. Among the programs slated for savings are Amtrak (search), environmental protections, American Indian schools, farmers' subsidies and Medicaid (search).
Many proposals face an unclear fate in Congress, where members of both parties are sure to defend favorite initiatives.
Cheney said the administration carefully evaluated programs that are proposed for elimination to determine whether they are effective or required of the government. He said officials looked to see if there were better ways to provide the services or consolidate and save money.
"I think you'll find once people sit down and have a chance to look at the budget that it is (a) fair, reasonable, responsible, serious piece of effort," Cheney said.
In international matters, the vice president expressed concerns about Iran's nuclear ambitions. The Islamic government in Iran (search) supposedly suspended its nuclear program this fall under an agreement with Europeans. Cheney could not say whether Iran is honoroing the deal, but confirmed that the United States remains committed, for now, to a non-military solution.
"Now, we are moving to support efforts to resolve it diplomatically. If this process breaks down, the next step probably is go to back to the board of governors of the International Atomic Energy Agency (search) and ultimately refer to the United Nations Security Council (search) for the imposition of international sanctions on Iran," he said.
Cheney said despite aspirations for a peaceful resolution with Iran, no options have been ruled out. Hassan Rohani, secretary-general of Iran's Supreme National Security Council (search), told Reuters on Sunday that the West could offer nothing to Tehran to persuade it to scrap a nuclear program Washington fears may be used to make bombs.
If the United States or Israel attacked, Rohani said, "of course we will retaliate and we will definitely accelerate our activities to complete our (nuclear) fuel cycle."
"They know very well that we do not want them to acquire nuclear weapons, nor does the civilized world. I can't think of anybody who's eager to see the Iranians develop that kind of capability," said Cheney, adding that the United States wants to encourage reformers inside Iran to build a democracy and reduce the power of "the unelected mullahs, who, we believe, are a threat to peace and stability in the region."
On issues closer to him, Cheney picked the Philadelphia Eagles to win the Super Bowl by three over the New England Patriots on Sunday night.
On his plans to seek higher office in 2008, the vice president was unequivocal.
“Not only no, but ‘hell no,'" he said. “I’m going to serve the president for the next four years and then I’m out of here.”
FOX News' Megyn Kendall and The Associated Press contributed to this report.