Bert Caldwell: Social Security issue merits another hearing

The Treasury Department on Monday quietly released an issue brief on Social Security.

So far, it has been quietly ignored, the usual response when something comes up people do not want to deal with.

President Bush put Social Security reform high on his second-term agenda. But his blueprint would have allowed those paying into the system to carve out personal accounts. That idea flopped, even among Republicans. Folks could not understand how Bush’s plan could shore up the Social Security trust fund if individuals opted to do for themselves first.

It did not add up, and still doesn’t.

Social Security has been off the radar since the administration proposals sank out of sight in mid-2005. So why resurrect the issue — if possible — now? Reform has so far not been part of the election dialogue and, even if it was, nothing could be undertaken until 2009. Incumbents are certainly not going to take up Social Security before the 2008 vote.

Also, Treasury Secretary Henry Paulson is, after all, a trustee of the Social Security funds. So are the secretaries of Labor and Health and Human Services, and the Social Security commissioner.

The trustees annually assess the funds’ soundness. Each spring they release a straightforward report on their findings for Social Security, as well as Medicare, that candidly sets out the challenges both systems will have fulfilling their obligations within the next few decades. In the case of Medicare, the hospital trust fund surplus derived from payroll deductions will be gone in 2019. The last of the Social Security reserves disappear in 2041.

Those dates have been well-publicized but, like everything else with a time horizon beyond Friday, readily forgotten.

Unless the administration turns up the volume, that is unlikely to change. A spokesman for the president says he will not advocate an increase in Social Security taxes, or cuts in benefits, so that is that.

In a statement Monday, Paulson says he has been speaking with congressional Republicans and Democrats about Social Security, looking for common ground.

“Everyone I talked with recognizes the seriousness of the problem,” he says. “Most agreed on some of the principles and policies that must be part of the solution.”

What those are, we do not yet know. The brief released Monday is the first of six that will be rolled out over the next three months. Subsequent papers will consider how reforms can be fair to all generations, and all within each generation; how Social Security surpluses can be saved; and the broader economic effects of reform.

All questions worth examining, but not in a vacuum. That was how the administration came up with its 2005 reform plan. Despite Paulson’s comments, there is no sign Congress is engaged. And there is little likelihood anyone will speak up unless they absolutely must.

A Treasury spokeswoman says the issue briefs will be the work of Treasury alone, albeit with some vetting by the White House Council of Economic Advisers and the National Economic Council. The papers “stand alone” from Paulson’s conversations with members of Congress.

Paulson has been a worthy Treasury secretary. It would be good if someone would step forward and publicly help move the discussion toward some solutions. This administration, and Paulson, will not be around to see anything done, but his issue papers could lay the groundwork for serious debate in the future.