Published May 24, 2005
GREECE, N.Y. – Social Security's top analyst said Tuesday the nation faces budget challenges in less than four years if Congress does not change the program.
At the same time, President Bush warned members of his own party they would join Democrats in facing voters' wrath if they don't support his proposed overhaul.
Stephen Goss, the nonpartisan chief actuary of the Social Security Administration, said the nation faces a pinch in 2009 because excess payroll taxes flowing into the program will begin to decline, halting the growth of surplus money that Congress has been tapping to fund other government programs.
At that time, lawmakers will face the prospect of budget cuts or tax increases that will only grow more severe each year until 2017, when all the surplus revenues end and the program begins paying out more in benefits than it generates in payroll taxes. That shift would force Social Security (search) to begin cashing in the IOUs Congress has been giving the program since it started spending the excess tax revenue in the 1980s, further increasing the nation's financial challenges.
"While there is no question that these securities will be redeemed when needed, as is now the case with the Medicare Trust Fund, this redemption will require the federal government to increase taxes, lower expenditures or issue publicly held debt in amounts equal to the net redemptions by the trust funds," Goss told the House Ways and Means Committee's panel on Social Security.
Bush, who has had trouble selling his ideas not only to Democrats but also to moderate Republicans, urged his fellow members of the GOP to resist pressure from constituents and support him. He has proposed allowing workers under age 55 to establish investment accounts to partially fund their future benefits, as well as slowing the growth of the traditional benefit check for all but the poorest workers by changing the method in which that growth is calculated.
"I think more and more people recognize there's a problem and people are going to say, `Go do something about it,"' Bush told an audience in Greece, N.Y. "And those who obstruct reform -- no matter what party they're in -- will pay a political price, in my judgment."
The community is in the district of Rep. Tom Reynolds (search), R-N.Y., one of several House members from the state who have been under pressure from citizen and labor groups that oppose Bush's ideas.
During his 2004 congressional race, Reynolds attacked his challenger, Jack Davis, for saying that "some changes are going to have to be made" in Social Security. Reynolds, a Bush supporter and Republican fundraiser, now says he respects the president's willingness to take on the issue, but has refrained from coming out directly in favor of Bush's ideas.
The Ways and Means hearing, one of two this week, featured diametrically opposed views of the urgency of Social Security's problems. The Senate Finance Committee is scheduled to discuss the topic Wednesday.
Rep. Richard Neal, D-Mass., accused the Bush administration of hyping the problem even as Goss and the Social Security Administration have projected the program can use the IOUs to continue paying currently scheduled benefits until 2041.
"Back in Boston, people are saying, 'Can you imagine Paul Revere traveling through the streets of Boston announcing, `The British are coming -- in 40 years,"' Neal said.
Rep. Earl Pomeroy, D-N.D., challenged the accuracy of the actuary's long-term projections, saying, "It's kind of like the weather: Weather forecasting for the next hours, pretty good; tomorrow, a bit dicey; and next week, fairly iffy."
Yet a Republican member of the panel, Rep. Kenny Hulshof of Missouri, suggested Neal alter his patriotic metaphor because "the red ink is coming, the red ink is coming."
Neal shot back, "Would you say, 'The red ink is coming -- in 42 years'?"