Social Security needs long-term overhaul, not campaign slogans

For his part, in his State of the Union message, President Bush proposed using a portion of payroll taxes to create personal-investment accounts for American workers. I was a member of the president's bipartisan Commission to Strengthen Social Security, and I agree that personal accounts should be part of the system in the future. Critics will rightly argue, however, that creating voluntary personal accounts for younger workers will be a fiscal challenge, given the already costly obligations of supporting the baby-boom retirees.

When it comes to strengthening Social Security, our commission acknowledged that there is no free lunch. But we also made clear in our report that tomorrow's retirees have been promised Social Security benefits much higher than those received by a retiree today with a similar work history. Accordingly, we proposed that, in the future, basic benefits be adjusted for inflation - but no more. By applying these savings, we were able to develop a reform plan that (over time) returns Social Security to financial balance, while also establishing private accounts. These private accounts represent a nest egg that younger workers can use to supplement their retirement income, leaving them better off than they would be under the traditional system.

Several members of Congress have submitted Social Security reform plans, and bipartisan interest in reform is growing. However, as the campaign heats up, there will be a temptation by others to play politics with this issue. Voters will not be well served by scare tactics or slogans. Candidates who pledge to protect the Social Security status quo are offering a false promise. Both the GAO and the CBO have warned that meeting Social Security's future costs would require increasing payroll taxes by nearly 50 percent or reducing promised benefits by roughly 30 percent. That approach would mean that younger workers would pay more - while getting less. Clearly, we need to do better than that.

Greenspan has set the stage for an election-year debate about Social Security's future. In the final analysis, what is important to the American people are the answers to the following questions: How will benefits be paid to the retiring baby boomers once payroll taxes fall short of annual benefits? By raising taxes? By increasing debt? By an infusion of general revenues at the expense of other defense and domestic priorities? How will private accounts be financed? How will they be structured? Can we find a solution that is fair to the baby-boom retirees - while also fair to their children and grandchildren?

The answers will depend on an election-year debate that is both high profile and high caliber. Let's hope we get it.

• Tim Penny, a former Democratic congressman from Minnesota, is chairman of the national advisory board of For Our Grandchildren, a Social Security education program. He was also a member of President Bush's bipartisan Commission to Strengthen Social Security.

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