WASHINGTON — On the heels of President Clinton’s remarks this morning
touting a “larger than projected” surplus and calling on Republicans to help him
“save Social Security with a lockbox,” The Concord Coalition today warned that
surplus euphoria and lockbox rhetoric are no substitutes for real Social Security reform.
WASHINGTON — On the heels of President Clinton’s remarks this morning
touting a “larger than projected” surplus and calling on Republicans to help him
“save Social Security with a lockbox,” The Concord Coalition today warned that
surplus euphoria and lockbox rhetoric are no substitutes for real Social Security reform.
“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.
