REALITIES OF SOCIAL SECURITY FUNDING MUST BE CONFRONTED

Although political pundits and editorial cartoonists are having a field day with projections into the next century for Social Security benefits, it is likely that the federal retirement program will be around in some form for a long time.

Claims that the Social Security trust fund is broke just aren't true. Currently, U.S. workers pay $60 billion more a year in Social Security taxes than is paid out to recipients of Social Security benefits. This huge reserve, however, will quickly disappear once baby boomers start collecting benefits in the year 2012 -- unless some changes are made before then.

A government panel, the Social Security Advisory Council, released a report last week that offered three suggestions for dealing with benefits beyond 2012. Unfortunately, the council's three-way split does little to guide planners who most certainly will find a way to maintain the nation's most relied-upon entitlement program.

On one point, however, the council was in general agreement: At least a portion of the funds collected from workers should be invested in the stock market in order to maximize growth. In this current era of huge growth in the stock market, this idea sounds OK. But it also assumes a huge risk that the Social Security Administration has always sought to avoid in the past by investing in safe government bonds.

The three plans offered by the advisory council overlook the obvious. If the council's projections that payroll taxes will cover only 76 percent of promised benefits by the year 2029, it would behoove government planners to either reduce the benefits or increase the Social Security tax to bring the two into balance.

What most Americans don't want, however, is to listen for the next three-plus decades to careless claims that Social Security is doomed -- no politician is likely to be a part of such a demise. And, many Americans very likely don't want their Social Security funds exposed to a great deal of risk in the stock market.

Instead, Congress and the White House need to follow through on a pledge to name a bipartisan commission that will arrive at a concrete plan for Social Security. Congressional leaders and President Clinton say that is what they want to do. And it is what future retirees expect.