House leaders are advocating legislation to guarantee full Social Security benefits.  The bill would require the government to issue certificates promising that Social Security benefits for anyone who reaches retirement age will not be cut.

President Bush doesn't support the idea because advisors fear it would undermine private Social Security retirement accounts and likely spark future lawsuits.  Others said the guarantees wouldn't be worth the paper they're printed on -- the current program can't provide any such guarantee.  The Congressional Research Service (CRS) confirmed this in a recent study of February 20, 2002, which said, "Future congressional action could 'amend or repeal' such guarantees."

Election year rhetoric aside, what's far more enlightening is what lawmakers are actually doing with the money to pay benefits.  For example, the Administration proposed to make last year's tax cuts, which are set to expire by the end of 2010, permanent.  The proposal comes as the Congressional Budget Office shows deterioration in the budget outlook.

According to a study by the Center for Budget and Policy Priorities, making the tax cuts permanent would reduce the surplus another $333 billion over the 2002-2011 period.  But over 75 years, the cost of the tax cuts, if made permanent, would be more than twice as great as the entire shortfall projected in the Social Security Trust Fund.  It would deprive the Treasury of approximately $4 trillion in revenue at the same period when baby boomers will begin to retire in large numbers and the cost of Social Security, Medicare and Medicaid long-term care will rise dramatically. (1)

Substantial revenues from outside of Social Security taxes are likely to be needed to ensure the solvency of the Trust Fund if drastic benefit cuts are to be avoided.  Permanent extension of the tax cuts would render such transfers to Social Security impossible.

Under current law the best guarantee for Social Security recipients is not a piece of paper -- it's a budget surplus.  That takes more revenues coming in than going out.  TSCL members overwhelmingly support legitimate actions to guarantee benefits, but paper promises can be broken too easily.  The TSCL staff will continue to work with Members of Congress to find measures with the real teeth needed to protect Social Security, Medicare and Medicaid benefits.  

(1) "The Administration's Proposal to Make the Tax Cut Permanent," Center on Budget and Policy Priorities, February 11, 2002.

To read more TSCL articles on topics that affect your Social Security Benefits, click here:  http://www.tscl.org/SSBenefitInfo.asp.

April 2002