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The Willis Report

A Simple Social Security Fix

We have a lockbox problem in this country. Remember the lockbox?

Democrats have been maintaining for some time now that the promise of social security is assured. No problem -- Boomers, Gen X-ers and even Gen Y-ers will get the benefits they were promised from the big pot of money they paid into.

They say the fund has a $2.5 trillion that guarantees benefits for decades. Even senate majority leader Harry Reid said this week he's not willing to consider changes to the program for 20 years -- because the program is fit as a fiddle for now.

Not that he or his generation is likely to need it by then, but anyway...

The problem with this diagnosis is that it's technically true but practically false.

Let me explain. First off, Social Security goes broke in 2037. But as a practical matter -- it's there already.

Why? Because Social Security surpluses of the last decades were siphoned off by the Treasury Department and spent. That's right.

The Treasury Department has returned I-O-Us back to the Social Security Fund as payment. Technically the I-O-Us were "special interest bonds" backed by the full faith and credit of the government, as Charles Krauthammer wrote in The Washington Post today.

Now while the administration believes these bonds have value, the reality is that they are a promise of repayment. They will have to be repaid by some future generation of Americans.
There are some solutions that can be made to fix the problem -- tweaks if you will, that will keep Social Security solvent for decades to come.

A simple boost in the retirement age for future generations, not current benefits recipients, would help put the program back on firmer ground.

But Reid and many other politicians don't even want to talk about it because they are afraid of a backlash from voters -- and let's face it, by the time the Social Security mess hits the fan, they will no longer be in office.

It's time politicians thought about our future and not their own. There is no clearer argument for term limits than the inability of politicians to talk about and come to agreement on a solution for entitlement programs. The social security fix should be a snap. But your representatives are too scared to face the problem.

Be sure to catch the Willis Report on the FOX Business Network every weekday from 5-6pm ET.

Gerri Willis joined Fox Business Network (FBN) in March of 2010. Willis is an anchor and personal finance reporter for the network.

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