WASHINGTON – The Bush administration said Monday the only way to permanently fix Social Security is through some combination of benefit cuts and tax increases.
That was one of the key findings in a new paper on Social Security released by the Treasury Department in an effort to achieve common ground on the politically explosive issue.
"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," the paper said. The Treasury paper said that while other changes to the giant benefit program might be desirable "only these changes can restore solvency permanently."
Treasury Secretary Henry Paulson, President Bush's point person on Social Security reform, said he had had a number of discussions with members of Congress from both parties. So far those talks have produced no breakthrough on the issue that Bush wanted to make the top domestic priority of his second term.
Bush put forward a Social Security reform 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.
Paulson said he hoped that a series of issue papers that Treasury plans to release in coming months on Social Security would provide a basis for further discussion.
"By focusing on areas of agreement, I hope these issue briefs will narrow the divide and spur further discussion of reforms," Paulson said in a statement accompanying the Treasury report.
Phil Swaigel, Treasury's assistant secretary for economic policy, told reporters that the plan was to issue about six issue briefs over the next three months. But he said it was "unclear" at the moment whether the papers would lead to a new push to get an overhaul program through Congress next year.
The Treasury paper said that there was a "significant cost of delay" in making the necessary reforms to Social Security because it reduced the number of people who would be able to share in the burden of reform.
"Not taking action is thus unfair to future generations," the paper said.