Draft Report Calls for Development of Personal Accounts
A commission assigned by President Bush to redesign Social Security late last week offered a bleak appraisal of a 'broken' system, warning that deep benefit cuts, tax increases or 'massive' federal debt are inevitable unless Congress allows the personal retirement accounts the White House favors.
A draft report by the commission, intended to define the condition of the nation's retirement system, said the program is failing women, blacks, Hispanics and the poor -- groups that traditionally have been among Social Security's strongest proponents.
Some analysts worry Social Security will be unable to pay its bills starting in 2038, but the report focuses on the expectation that it will stop running surpluses 15 years from now, according to a story appearing today on Financial Planning Interactive that was adapted from a Washington Post article.
'The year 2016 may seem a long way off, but it is not,' the document said. 'For a person who is 50 years old today, Social Security will begin experiencing financial difficulties just when he or she reaches retirement age.'
The document also attempted to redefine the terms of debate, laying out in graphic terms what it says are the adverse consequences of leaving the system in its present form.
For example, it says that shortfalls by 2020 would require cuts that 'equal the combined size' of Head Start, the Women, Infants and Children nutrition program, the Education and Commerce departments and the Environmental Protection Agency.
'The debate over whether there's a problem with Social Security ends with this report,' said Jim Wilkinson, White House deputy director of communications. 'In the coming months, we can begin to discuss the solution the president advocates.'
The report delighted conservatives but infuriated many analysts and lawmakers who oppose private accounts.
The draft of the report will be considered by the full commission sometime this week and it is expected that changes will be made before it is sent to Bush.