Can we trust in the Social Security Trust Fund (SSTF)? Recently, the President's Social Security Commission released a report stating that the Trust Fund contains "no real assets" and that the "crisis date" is 2016 when benefits begin to exceed revenues coming in. The report implies that private retirement accounts are the best way to address future financing problems. A leading critic of the report, Henry J. Aaron, a former Chairman of the Advisory Council on Social Security, charged that the SSTF currently holds more than $1 trillion in Treasury securities. These securities he says are just as real as the Treasury bonds held by private investors.

Is there a difference between bonds held by private investors and those in the SSTF? According to the General Accounting Office (GAO) "Social Security's Trust Funds are not like private trust funds. A private trust fund can set aside money for the future by increasing its assets, but under current law, when the SSTF receives more than it pays out, that money must be invested in Treasury securities and immediately used to meet the current cash needs of the government. These securities are an asset to the Trust Fund, but they are a claim on the Treasury," in other words, an IOU.

Uncle Sam set up a retirement Trust Fund, but instead of depositing real money he deposited IOUs that pay interest. When he needs to use the Trust Fund there won't be any real money. He still has to come up with a way to pay off the IOUs and interest.

Can we rely on Uncle Sam to pay? The good news is Uncle Sam has always paid benefits in the past. The bad news is Uncle Sam did so by reducing his "liabilities." In 1977 and again in 1983 when the Social Security Trust Fund faced deficit, benefits were cut. All we have is a promise that can change at any time. Under the Supreme Court ruling in Flemming v. Nestor, the court found that current retirees and workers have no legal ownership of their Social Security benefits.

In 2016 Uncle Sam will need to start cashing in those IOUs. If tax dollars are insufficient to cover them, then the government must either raise taxes, cut benefits or other spending, or borrow to get the money. This happened in 1977 and 1983. Shortfalls occurred in both the SSTF and the general federal revenues at the same time. The nation was strapped for cash by recent tax cuts, inflation, recession, and increased Social Security benefit costs. Benefit cuts, big payroll tax increases, and borrowing enabled the program to stay afloat, but at a cost to millions of Social Security recipients.

Private retirement accounts alone can not save Social Security. Private accounts would divert money out of the program causing the "crisis date" to occur an estimated nine years earlier. Other proposals that would extend the solvency of Social Security exist, but the Social Security Commission is not charged with addressing those under a comprehensive plan.

Unintended consequences occur when legislation is enacted in haste. We need comprehensive solutions to Social Security's problems that take place slowly and incrementally to avoid placing any undue financial burden on any one particular group of individuals. We cannot afford denial, delay, or short-sighted fixes. We must open the debate to all proposals to strengthen Social Security.