There is an Issue with Social Security

This is a step forward -- someone at the Washington Post (Robert Samuelson) actually acknowledged there is a problem with Social Security... He does not agree with Bush's plan, but simply acknowledging a problem is a "giant step forward"; wouldn't you say?

Our central budget problem, as I've noted in earlier columns, is the coming spending explosion in Social Security, Medicare and Medicaid, driven by aging baby boomers and rising health spending. In 2004 these programs cost $965 billion, or 8.4 percent of the economy (gross domestic product). The Congressional Budget Office projects that by 2030 their costs will rise to 14 percent of GDP, or more than $1.6 trillion in today's dollars. Avoiding a (nearly) $700 billion annual increase in taxes or deficits would require comparable spending cuts in other government programs. It won't happen. The projected increase in retirement spending nearly equals all federal "discretionary spending" -- a category that includes defense, homeland security, environmental programs, national parks, scientific research and much more. We're not going to eliminate all these programs.

Once you've done this math, you recognize that benefit cuts in Social Security, Medicare and Medicaid are inevitable. They're the only other way to limit massive tax increases or immense budget deficits. Moreover, the benefit cuts have to affect baby boomers, because they will be the people on Social Security, Medicare and Medicaid. The critical period occurs from 2011 to 2029, when all baby boomers (people born from 1946 to 1964) hit 65. That's when budgetary pressures intensify. So, does the Bush Social Security plan improve the budget outlook? From all indications, the answer is "no."