Social Security is the most successful social program ever administered by the federal government. Prior to its inception, old age was not a person's golden years. Most of our nation's seniors lived in poverty. Over the last 30 years, poverty among our nation's seniors has declined by 62 percent. This is a testament to the effectiveness of Social Security.

The Trustees of the Social Security Trust Fund recently made their report to the Congress on the financial status of the Social Security Trust Fund. In the short-term, the numbers look good. Income from the payroll taxes used to finance Social Security continue to exceed the payments necessary to meet our commitment to retired seniors. In light of this, the question then becomes "why reform now?"

As the Social Security Trustees noted in their most recent report, this is not a trend that will continue forever. Demographic changes in our nation - the retirement of the baby-boomers and the blessing of longer life expectancies - combined with fewer workers paying Social Security payroll taxes per retiree will begin to strain the program. It is projected that beginning in 2014, the Social Security Trust Fund will begin to post deficits. By the year 2034, Social Security will be unable to meet the obligations it has made to workers who are currently paying taxes into the system.

Social Security is not a pre-funded system, like a private pension plan. It is a pay as you go system where the payroll taxes of current workers are used to finance the benefits of current retirees. Since the Administration of President Lyndon Johnson, revenues from Social Security payroll taxes have been included in the overall federal budget. The Social Security Trust Fund is essentially an accounting device, filled with special government IOU's that track income and distributions from the program. Under this structure, future funding shortfalls threaten not only the Social Security benefits upon which seniors depend, but other federal programs that are vital to our nation's interests.

In other words, failure to begin the process of reforming the most successful social program in the history of our nation would be akin to burying one's head in the sand.

As a member of the U.S. House Committee on Ways and Means Social Security Subcommittee, I have participated in numerous hearings on the challenges facing Social Security. We have heard from respected experts representing all points on the political and ideological spectrum. The one point (and perhaps the only point) upon which I would say there is consensus is that Congress and the President should act sooner rather than later to address Social Security's long-term solvency problems. The longer we wait, the more drastic the changes that will be necessary to make sure that our children and grandchildren receive the benefits of a viable Social Security program.

The financial experience of generations of Americans illustrates why Congress and the President should reform Social Security now. If a person begins saving for retirement early in his working career, far less sacrifice is required to meet his retirement needs. An individual who waits until his 50's to begin putting aside money for retirement will not only have less of a nest-egg than the person who saved throughout his working life, he will have to make far greater financial sacrifices in the years leading up to retirement.

The same principle can be applied to the issue of Social Security reform. By planning ahead and addressing Social Security's long-term challenges in a responsible manner, we as a nation, can increase personal wealth and preserve Social Security for our children and grandchildren. Delay will reduce the range of reform options and leave policymakers in the future with the unpopular option of either raising payroll taxes or cutting benefits.

Reform of the most successful social program in our nation's history should not be entered into lightly. Before Congress and the President sit down and begin crafting the specifics of reform legislation, there are several key principles that must be considered. By acting now, we can make sure these concerns are addressed.

First and foremost, Social Security must honor the commitments it has made to current retirees and those nearing retirement. Seniors have made real-life assumptions based on the payroll tax contributions they and their employers have made throughout their working lives. It would be wrong for Congress and the President to go back on these promises.

Secondly, future reform efforts should not increase payroll taxes. Workers currently pay a 12.4% payroll tax to fund the Social Security system. For younger workers, it will take many more years to recoup the contributions they have made to the program than previous retirees. Increasing a regressive payroll tax would only amplify this problem and make Social Security a bad deal for current workers.

Next, Congress and the President must retain the disability portion of the Social Security program. The disability insurance portion of Social Security has provided a meaningful safety net for Americans who are unable to work due to a disability. In the short-term, Congress should work to improve the financial standing of the disability program by making it easier for individuals with disabilities to return to work. This will help relieve stress on the Disability Insurance Trust Fund. I have introduced legislation, H.R. 1091, the Ticket to Work and Self-Sufficiency Act of 1999, to accomplish this goal. In the long-term, Congress must retain a meaningful disability insurance program in Social Security reform.

Finally, based on the bipartisan consensus that Congress and the President should avoid increasing payroll taxes or cutting benefits, a reform option that increases the rate of return for younger workers while moving Social Security towards being a pre-funded system must be our goal. Increasing the return on workers' investment is the only way to be fair to future generations. In this regard, the President has performed a great service when he suggests that the private markets be utilized to address Social Security's long-term solvency problems. Though I believe there are serious concerns associated with the federal government directly investing Social Security proceeds in the private markets, this proposal has certainly moved the debate forward in a meaningful fashion.

Likewise, if we can structure a mechanism that increases the rate of return for current workers while moving the program from a pay as you go system to a pre-funded system similar to private pensions, we can relieve some of the long-term financial stress on the Social Security Trust Fund and avoid having to make dramatic changes to the program in the future. Alan Greenspan, the Chairman of the Federal Reserve, in testimony before Congress has extolled the virtues of moving from our present system to a pre-funded system.

It is important to note that Social Security was never intended to be the sole source of retirement income. Congress and the President should also work in a bipartisan manner to increase our nation's woefully low savings rate and expand access to employer-provided pensions.

Social Security has been extremely successful in addressing the needs of our nation's seniors. However, the program faces long-term financial challenges that must be addressed now in order to avoid the unattractive options of higher payroll taxes or reduced benefits. Hopefully, Americans are ready to take the action necessary to preserve a meaningful Social Security program. As former President Gerald Ford once stated: "Our conscience demands what our children deserve; God willing, we will disappoint neither."