CONGRESS: PASS OR FAIL

Remember being back in school? Your read a book then took a test on it, right?

Okay here's the book: The 2007 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds

Here's the test: Who said, "When you find yourself in a hole, stop digging"? a. Garfield the Cat b. Confucius c. Will Rogers d. Winston Churchill e. Doesn't matter, it's true no matter who said it. If you chose "e", you've just aced the test. Now comes the hard part.

Each spring, the Social Security trustees - four members of the President's cabinet, plus two public trustees appointed by the President and confirmed by the Senate - project how economic and demographic conditions will affect Social Security's finances. By law, the trustees must issue their report annually.

The latest report, released April 23, 2007, shows that Social Security faces multi-trillion dollar deficits, which grow with each passing year. If we don't fix Social Security, and soon, ours could be the first generation to leave its children and grandchildren worse off than we have been.

The Trustees' projections are sobering: lower birth rates will reduce the number of workers paying into the system while increased life expectancies mean that more seniors will be collecting benefits from it. While there were 16 workers for each retiree in 1950 and 3.3 workers per retiree today, by 2040 there will be just two.

And when there are only two workers paying into Social Security for each retiree collecting benefits, Social Security's 12.4 percent payroll tax simply won't be enough to pay full benefits. Beginning in 2017, according to the Trustees report, Social Security will collect less in payroll taxes than it needs to pay benefits. At that point, the government will need to come up with extra cash, and lots of it. Over the next 75 years, Social Security faces cash deficits of $4.7 trillion; extending beyond 75 years increases the shortfall to over $13 trillion. That's the amount we would need to set aside today to keep the system solvent permanently. If we wait, the payroll tax would eventually have to rise to almost double to balance Social Security's books.

Social Security has faced bankruptcy several times in the past, and the fix has been to increase taxes and reduce benefits. Benefits have been reduced in several ways: altering the way initial benefits have been calculated, increasing the retirement age, and subjecting benefits to income taxation.

Congress has been spending recklessly for years. Forcing them to break this habit will be very difficult. But the nation's financial security - the quality of life our children and grandchildren can expect - is in great jeopardy. Corrective action is required before we condemn future generations to a lifetime of higher taxes and lower standards of living.

Don't believe it? Congress's own investigative agency, the Government Accountability Office, says we should have an additional (and nonexistent) $50 trillion invested in Treasury bonds to cover the government's current obligations to Social Security and Medicare. That means Americans currently are on the hook for about $440,000 per household.

That's right. Whenever you read that the government owes anything always remember that means folks are talking about your tax dollars. Money out of your pocket.

Contact your elected officials in Washington, DC today. Ask them to read the book and take the same test you took. Then give them a grade. On this, they either pass or fail.

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