RE: Sorting out the issues

[National Dialogue Moderator <moderator>]

I want to reiterate the comments made by Senator Gregg.  The question
is whether we look at the Social Security program in isolation, or
whether we consider the consequences for the rest of the budget
and the economy. Restoring the Social Security trust fund to
actuarial balance is one measure of the health of the trust fund,
as Mr. Rand pointed out, but it is not the only measure.  In addition
to the 2.09% actuarial deficit that Mr. Rand cited, the Social
Security system will begin to run annual cash shortfalls beginning
in 2014 that will place tremendous burdens that the program places
on the rest of the buget.  It is possible to make the Social Security
system "healthy" on paper, but leave in place tremendous liabilities
to the general Treasury that will require future Congresses to
raise taxes or cut other programs.  In 2030, Social Security will
still be solvent on paper, but we will have to cut all other
government programs by 16% or raise income taxes in order to meet
the costs of the Social Security system.  In other words, the
question isn't just whether Social Security will be healthy in the
future, but will the health of Social Security come at the expense
of the economy and everything else the government does.  For example,
folks who say there isn't a crisis say that Social Security trust
fund will have funds to pay benefits until 2034.  That is true.
However, the general Treasury will have to come up with more than
$7 trillion dollars between 2014 and 2034 to redeem the IOUs held
by the trust fund.  In other words, Social Security will still be
"healthy" on paper from 2014 through 2034, but at the expense of
the rest of the budget.  We can't afford to look at the Social
Security program in isolation without considering the tax increases
or other government programs.  A solution to Social Security that
makes Social Security look healthy on paper but does not address
cash flow problems beginning in 2014 that will place a tremendous
burden on future taxpayers and other government programs is not a
responsible solution.

Congressman Charlie Stenholm