News of the Day ... in Perspective
Social Security will be flat broke, President Bush says.
On his weekly radio report, President Bush urged Americans to support his plan to allow workers to divert part of their payroll taxes into private investment plans, saying that “Social Security is on the road to bankruptcy.”
Waiting a single year to fix the system would add $600 billion to the ultimate cost, according to Social Security trustees.
“If we do not act now, government will ultimately be left with two choices: Dramatically reduce benefits or impose a massive, economically ruinous tax increase,” the President said. “Leaving our children with such a mess would be a generational betrayal.”
Payouts will exceed revenue by 2018, say trustees. The “trust fund” will be exhausted by 2042, when tax revenues will be sufficient to pay only 73% of promised benefits.
Children born today can expect less than a 2% return, after inflation, on all the money they will pay into Social Security during their lifetime (AP).