Social Security: No easy fixes

The Treasury Department has released a grim assessment about the future of Social Security. The key points: The government's largest social program faces a significant long-term deficit. The only way to bridge this gap is to cut benefits or to raise taxes.

That's tough love language because "only these changes can restore solvency permanently."

And there are no easy fixes. "By itself, faster economic growth will not solve Social Security's financial imbalance -- realistically, there is no way to 'grow out of this problem.' "

We may disagree with the Bush administration's solution to Social Security, but that's not important right now because what is critical is that Americans come to terms with the nature of the problem.

The problem is simple: Social Security promises more benefits than are paid for by payroll taxes. That imbalance is funded by generational unfairness. A worker today, for example, could "earn" more benefits by investing directly in Treasury bonds than paying that tax. But earlier generations received benefits that exceeded their lifetime contributions by $13.6 trillion.

The Treasury report pegs the "official" insolvency date as 2041. But even that's misleading because negative cash flows begin a decade from now and taxes will have to be raised to pay for current trust fund bonds.

It's worth fighting to preserve Social Security's future, and that means an honest accounting about what's been promised and how much we should pay for those benefits.