WASHINGTON -- Treasury Secretary Henry Paulson reminded Congress this week that Social Security's shaky financial structure is only going to get worse unless something is done to fix it, sooner rather than later.
A sobering report on the growing financial insolvency of the nation's biggest income-transfer program warns that Social Security faces a $13.6 trillion shortfall in the not-too-distant future.
A tsunami wave of baby boomers who begin retiring at the end of this decade means that by 2017 (just 10 years from now), Social Security will begin paying out more in benefits than it receives in payroll taxes.
The government projects the system's so-called reserves will be spent by 2041, and we will face two very unpopular choices: Cut future benefits substantially or raise payroll taxes through the roof.
The White House pointedly stated this week that both were out of the question on President Bush's watch. For his part, Paulson must believe that any increase in taxes would undermine future economic growth. His purpose, rather, is to get Congress thinking again about restructuring the system so that we can save it, perhaps in a much different form, for future generations.
Still, the report's stark choices -- hike taxes or slash benefits, or both -- left out the possibility of pursuing another reform: Let workers put some of their payroll taxes into personal-investment accounts they would own and that would yield higher returns on their money and thereby build a larger retirement nest egg than Social Security could ever hope to provide.
Bush, to his credit, bravely tried to sell this idea after his re-election, but it failed to win much support in Congress. House and Senate Democratic leaders, with their heads in the sand, said the system was in good shape and not in any danger of insolvency (when they knew better).
In a shameful case of demagoguery and fear mongering, Democrats and the AARP, the nation's retiree lobby, said Bush's idea would destroy Social Security and workers risked losing all of their money in the stock market.
Support for the idea plunged and sent frightened Republicans into the tall grass. The proposal never reached a vote in Congress.
Everyone apparently forgot that President Clinton proposed letting the government invest some payroll taxes in the stock market, in the belief that the higher returns could be used to finance future benefit checks.
His dopey scheme went nowhere. The idea of the government buying stocks and owning huge portions of the economy was pure socialism and would wreak havoc in our economy. Still, Clinton's proposal was based on a larger point: A sturdy retirement system requires investments, and one of the best places to build wealth is in the stock market.
Even Social Security's board of trustees floated the idea: Instead of just spending the annual Social Security surpluses and depositing paper IOUs in the Treasury, the panel suggested investing at least some of the money in equities, or "real assets," that could be used to finance the program's mushrooming future liabilities.
Then Bush came along and proposed letting the workers themselves put aside a small portion of their payroll taxes, an idea that was gaining in popularity. But the Democrats and the AARP killed it with a hypocritical and elitist campaign that claimed stocks were too risky for ordinary Americans.
No one mentioned that these lawmakers enacted plans that allow them to invest their own federal pension contributions in the stock market (and most do).
Moreover, months after the AARP declared victory, the group announced its entree into the mutual-fund business, offering members a chance to make more money in the stock market than they could possibly get out of Social Security.
But the president's fiscally sound proposal isn't dead; it's just sleeping, waiting for another leader to come along to sell it all over again, maybe this time to an electorate that is tired of getting crumbs from a lifetime of higher payroll taxes, and wary of Social Security's future insolvency.
Democratic presidential candidates -- who told voters that everything is just fine with the program -- haven't said a word about it in their campaigns. Indeed, the AARP complained about their silence last month, saying, "millions of Americans are in financial straits without enough savings ... for retirement."
The good news is that Bush's idea seems to be alive and well among the GOP's presidential contenders. Rudy Giuliani, among his other rivals, says he likes private accounts.
"I would have preferred, over my lifetime, if I could have invested some of that Social Security money myself," Giuliani said last month. "I think I would have done much better than the government did. People who want a private option should be entitled to have it."
In 1964, Sen. Barry Goldwater suggested a private option, but he went down to a crushing defeat at the hands of President Lyndon Johnson. Bush proposed a partially private option in both campaigns, despite opponents who viciously attacked the idea. Then he sent his plan to Capitol Hill, where it was hotly debated.
Still miles to go, but we're getting closer.