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Home / Business / Social security sticks to its first real lack of decades. Big cuts can follow.

Social security sticks to its first real lack of decades. Big cuts can follow.



"The fund's surplus was meant to provide a buffer that would give politicians enough time to show some fiscal responsibility," said Robert D. Reischauer, a former social security overseer who was also the head of Congress's budget office and is now President emeritus of Urban Institute. "But the problem is that without an immediate crisis, politicians don't have to act. And really, they'd rather sleep. So when the crisis finally comes, as it wants, it's probably much, much worse because of the delay." [19659002] John Cogan, a public policy professor in Stanford, said that the basic problem of social security was that benefits had been rising faster than income. The cuts, he said, will be unpleasant, but inevitable.

"The solution I think is slowing the growth of real benefits promised to future recipients," he said.

Democrats in Congress have proposed an increase in social security benefits, accompanied by higher taxes for the rich. In combination, the bill's various measures will eliminate the program's financial shortfall, according to forecasts by chief executive Stephen C. Goss.

Conservatives continue to push for sharp reductions in the size of social security, as well as Medicare, saying the United States cannot afford the growing burden of the two "rights programs".

"Rights programs in the United States have expanded more than ten times since its inception, but workers are not nearly 10 times better as a result," the Heritage Foundation said in a May 20 political proposal. The Conservative Think Tank favors cuts in benefits and siphoning money from payroll taxes in some investment accounts. It echoed an initiative that President George W. Bush once embraced, but democrats blocked.

There is no sign of an imminent breakthrough, although Professor Cogan said that, as in the past, the imminent prospect of prejudice "is changing the political atmosphere and making it possible to find a compromise."


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