The U.S. Department of the Treasury today released the first of several issue papers on Social Security reform. And the message is sobering: Social Security is facing a $13.6 trillion shortfall, and the program can be made solvent only by reducing benefits and/or raising taxes. By itself, faster economic growth will not solve the problem.
The new report contains no strong advocacy for private Social Security accounts, a previous Bush administration proposal that failed to attract much congressional enthusiasm. Instead, the message is that acting sooner and spreading the burden across more generations will be fairer to future Americans. There is "significant cost" to delay, the report warns.