The High Cost of Obstruction

When President Bush mentioned, during this year's State of the Union Address that Congress had failed to do anything to fix Social Security's looming financial problems, Democrats jumped up and cheered. Last week they received a rebuke in the form of the latest report from the system's nonpartisan trustees.

Another year of inaction has allowed Social Security's problems to worsen. The program will begin running a deficit in just 11 years. In theory, the Social Security Trust Fund will pay benefits until 2040, a year earlier than predicted last year. That's not much comfort to today's 33-year-olds who will face an automatic 26 percent cut in benefits unless the program is reformed before they retire. But even that is misleading, because the Trust Fund contains no actual assets. The government bonds it holds are simply a form of IOU, a measure of how much money the government owes the system. It says nothing about where the government will get the money to pay back those IOUs.

Michael D. Tanner