Another Social Security report, another yawn

The words that come out of the mouths of the experts who troop to Capitol Hill from time to time to deliver the latest gloomy forecasts about the Social Security system have a familiar ring.

The latest report comes from the agency's chief actuary, Stephen Goss, who told the Senate Finance Committee earlier this month that action is needed to preserve benefits for millions of Americans who will be retiring 35 years from now.

As Americans have heard so often in recent years, the Social Security system will eventually go broke, because the payments deducted from workers' paychecks and matched by employers won't be enough to cover anticipated benefits. There was a small piece of good news, however: The date of Social Security's insolvency has been extended a year to 2042. The system will start paying out more than it takes in by 2018, the latest estimates predict.

Goss had been asked by senators to come up with some suggestions for extending the life of the Social Security system. Of course, he isn't the first to take a crack at what sometimes seems to be an impossible task. Study after study has produced recommendations which Congress has always chosen to ignore.

While minor tinkering with Social Security is politically acceptable, any forthright overhaul of the system is considered to be outside the realm of political reality. Hence, everyone in Washington likes to talk about "reforming" Social Security, but nobody wants to really do anything about it.

Goss' suggestions were practical, even if they were unacceptable. He suggested Social Security shortfalls could be wiped out for the next 75 years by either cutting benefits now or increasing payroll taxes now.

The two obvious faults with Goss' plan, at least from the perspective of most senators, is that cutting benefits and drastically increasing payroll taxes are political taboos. So those ideas aren't going to be heeded.

There's another factor that needs to be considered as well: Tweaking the system to extend the life of the Social Security system 75 years instead of the currently estimated 35 years simply means the system is still going broke. And it's going broke because nobody wants to do what it really takes to reform Social Security.

For example, there is still considerable reluctance to give serious consideration to President Bush's idea of letting younger workers invest some of their payroll taxes in personal investment accounts -- a workable system that has produced positive returns for workers in the United Kingdom, Germany and elsewhere.

And it would be tough to find anyone in Congress willing to risk the political flak of scrapping not only payroll deductions for Social Security, but -- even better -- the federal income tax as well. The economic surge that would accompany such a radical change -- with money raised instead by, say, a federal sales tax -- would be more than enough to maintain Social Security indefinitely, not to mention giving the federal government ample operating funds while allowing Americans to keep their hard-earned wages.