The crisis at hand and the solutions proposed

In today’s WashPost, Jim Vandehei notes that President Bush tries to advance his political goals by painting issues as “crises” that must be addressed. As usual, I skipped down to the section on Social Security:

The crisis, as Bush explains, is this: A decade or so from now the Social Security system will begin paying out more in benefits than it takes in payroll taxes because there will be higher percentage of older Americans than there is today. From that point, the system, if unchanged, will create a $3.7 trillion shortfall by 2075, or $10.4 trillion if calculated over eternity, that future generations will be forced to pay for. The crisis, in effect, is not fixing the problem before it spreads out of control, according to Bush.

And what’s wrong with that? The captain of the Titanic didn’t say “That iceberg is at least a mile away – plenty of time!” [crunch]

But Bush's chief solution -- allowing younger workers to divert a portion of their 6.2 percent payroll tax into private investment accounts -- will do nothing to avert it unless it is accompanied by a reduction in future guaranteed benefits or other changes to the retirement program, according to many experts on Social Security.

The Democrats have found their equilibrium on this issue: they won’t support reduced or recalculated benefits, they’ll oppose any borrowing to initiate private accounts, and they’ll portray any private funding as a sop to Wall Street. But, to be fair, they do have some new ideas on how to save Social Security:

"It is a crisis created in the mind of the White House because they want to take care of the fat cats on Wall Street," Reid said. He argued that Social Security is primed to pay out full benefits until 2055 -- even if no changes are made. Many Democrats propose small and gradual changes such as raising the payroll tax or reducing future benefits, perhaps just for the wealthy, to head off problems. Reid and most Democrats oppose private Social Security accounts.

Raising taxes and cutting benefits for the rich! Who says the Democratic Party isn’t full of fresh ideas?!?