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The retirement squeeze: How would they fix it?

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Critics say the reason for the president's reticence is obvious: Implementation of partial privatization of Social Security would be very expensive. It might be difficult to build political support at a time of burgeoning deficits and rising national-security spending.

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Consider the problem: When baby boomers begin retiring in large numbers, relatively fewer and fewer workers will be supporting a growing population of retirees. Now there are roughly 3.3 workers paying taxes for each Social Security recipient drawing benefits. By 2030 this support ratio will fall to 2.2.

Today Social Security is in surplus. But in 2018 it will probably pass break-even and dive into the red. Instead of subsidizing other spending in the federal budget, as it does now, it will begin eating up general revenue at the rate of an extra $45 billion every year.

"We have promised more than our economy has the ability to deliver to retirees," said Federal Reserve Chairman Alan Greenspan in an Aug. 27 speech.

In the short run, say critics, private accounts could well make this problem worse, as they would siphon off a share of much-needed revenue. Estimates of the cost of a transition to partial privatization run from $500 million to $2 trillion over 10 years.

Furthermore, the Kerry campaign charges that the new accounts would also represent a mammoth giveaway in fees to the private financial firms that would oversee them. "That's not a plan - it's a rip-off," said Kerry at a campaign appearance last week.

But Kerry himself has not addressed Social Security's financial problems in detail, either. His main position on the program is a simple negative: He's against Social Security privatization.

Kerry is also on record as opposing any attempt to raise the current retirement age or to cut benefits. The way to fix the program, he's said, is simply to fix the general economy.

"The first step to saving Social Security is getting our fiscal house in order," Kerry said last week.

Some experts believe that Social Security is simply too difficult a problem to discuss in the heat of a presidential campaign. The issue does not lend itself to quick description, and solving it will require painful trade-offs. The last big Social Security bailout, in 1983, was the result of hard work by a bipartisan commission - and even then it barely squeaked through.

Yet in the meantime the clock ticks on. Current workers need time to plan if Social Security changes - and the red ink starts flowing in but a few years.

"We actually need to make these policy changes as soon as possible," said Maya MacGuineas, codirector of the New America Foundation's retirement security program, at a seminar on Social Security last year.

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