“It would be a huge disservice to all Americans for the President and Congress to simply pass a lockbox bill and declare that Social Security has been saved for future generations. While a lockbox may be helpful, Congress can easily pick any lock it controls. Moreover, even if the entire trust fund surplus could be locked away, it would not be enough to save Social Security. In fact, over the next 75 years, Social Security's cumulative surpluses of $2.6 trillion in real dollars, including interest on the trust fund, will be dwarfed by its cumulative deficits of $19.8 trillion,” said Concord Policy Director Robert Bixby.
“While the Concord Coalition agrees with the President that debt reduction is an important use of any surpluses that may develop, we do not agree that his plan to credit Social Security with new Treasury IOUs representing interest savings from presumed debt reduction does anything to save the program. Simply crediting additional IOUs to Social Security will do absolutely nothing to alter the program's fundamental unsustainability. All it does is literally paper over Social Security's huge, looming shortfalls, ” Bixby said.
As the President's Office of Management and Budget has pointedly observed about the trust funds, “[T]hey are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, have any impact on the Government's ability to pay benefits,” from Analytical Perspectives, Budget of the United States Government, Fiscal Year 2000, page 337.
“As the Concord Coalition has always emphasized, there are only two roads to genuine Social Security reform, and a workable plan must pursue both. Reform must reduce Social Security's long-term burden by reducing its long-term costs. And it must make the remaining burden more bearable by increasing national savings, and hence the size of tomorrow's economic pie. Doing so requires hard choices. There are no magic bullets,” Bixby said.
The Concord Coalition was founded in 1992 by former Senator Warren Rudman (R-N.H.), the late Paul Tsongas, former Democratic Senator from Massachusetts, and former Secretary of Commerce Peter Peterson. Former Senator Sam Nunn (D-Ga.) joined Rudman as co-chair of the organization in 1997. The Concord Coalition is a nonpartisan, grass roots organization dedicated to balanced federal budgets and generationally responsible fiscal policy.