01:00 AM EST on Tuesday, February 22, 2005

PRESIDENT BUSH'S administration has a credibility gap that is founded on concealed budget estimates of the Medicare privatization bill, on nonexistent weapons of mass destruction, and on unfunded mandates created by the No Child Left Behind Act. It is in this context and from the vantage point of this gap that we should examine the president's plans for Social Security.

Contrast the president's rhetoric with the facts. He states that the Social Security "crisis is now." According to the Social Security actuaries, beginning in 2042 Social Security will be unable to pay full benefits. The nonpartisan Congressional Budget Office, headed by a former Bush White House economist, puts that date at 2052. The president has a very long view if 37 or 47 years ahead is "now."

Moreover, the Social Security system, while certainly facing a long-term problem, is hardly confronting a crisis. The president wants us to think that the system will be, in his own words, "flat bust, bankrupt" if we don't act. So does that mean Social Security will be unable to pay anything out, as the president wants you to think? Well, no. Without changes in the system, even after Social Security pays down its surplus, in 2042 or 2052, it will be able to pay about 75 percent of promised benefits. Those seniors will still receive greater benefits than seniors receive today, even accounting for inflation. While that kind of benefit cut is not acceptable, it's also a far cry from bankruptcy.

There is a kernel of truth in the administration's warnings, however. A crisis looms, but it's the Bush administration's budget crisis, not a Social Security crisis.

Since the president took office and began squandering the Clinton surpluses, the federal government has treated Social Security like a credit card -- borrowing from the Social Security surplus to pay its other bills. Beginning in 2018, the government needs to start repaying what it has borrowed. But because this administration turned a $5.6 trillion projected surplus into a $3.5 trillion deficit, and counting, that won't be easy.

Yet the state of Social Security isn't the problem; paying off the credit card is the problem. It's important that we keep these two issues clear.

The president is essentially saying that Social Security beneficiaries should be the only ones to sacrifice to solve the government's budget problem. Arguing that we need to perform radical surgery on Social Security because it will be hard to pay back what was borrowed for big tax breaks is irresponsible and short-sighted. Imagine the reaction you'd get if you made that argument to your bank.

If the administration were serious about protecting and strengthening Social Security, it would be asking how to restore its long-term solvency as simply as possible, so that it could maintain its important guarantee of dignity and security. No solution will be pain-free, but it's worth pointing out that making the Bush tax breaks permanent would cost more than four times as much over the next 75 years as restoring Social Security's solvency.

We could have a healthy debate about how to best strengthen the system's finances without cutting benefits, but that's not the question the president is asking. The real question he is asking is: How can Social Security be converted into a system of private accounts?

In fact, the president's partial-privatization scheme for Social Security doesn't address the system's long-term solvency problem; it accelerates, it from mid-century to right now. The plan for private accounts would divert approximately $2 trillion in revenue from Social Security. Consequently, the date at which the government would need to start paying back what it has borrowed would jump from 2018 to next year. Social Security would be unable to pay full benefits in 2021, instead of 2042 or 2052.

In other words, because the president's true goal is private accounts -- not Social Security solvency -- he would dramatically worsen the health of the Social Security system and make the federal-budget picture even more precarious. The unavoidable result would be deep Social Security cuts plus dramatically bigger deficits, higher interest rates, and even the risk of a currency crisis.

It doesn't need to be this way. What we need to do is have an honest discussion about how we can protect Social Security for future generations -- not the best way to scrap a proven program and create another budget mess.

I actually share the president's interest in putting meaningful investment accounts in the hands of every American. I just don't think we should do it by gambling Americans' retirement security. Both Social Security solvency and developing an ownership society are important goals, but they are distinct.

Last year, I worked with a broad bipartisan coalition of U.S. representatives and senators on a bold proposal that would truly create an ownership society. The result was the ASPIRE Act, which would give every child an investment account at birth. It would be put in a seed contribution, and match parental contributions for lower-income children. The accounts would grow tax-free, and by the time the children turn 18, they would have a nest egg, which could be used for college or saved to buy a home, capitalize a small business, or apply to retirement.

If an ownership society is the goal, it makes more sense to start it at birth. By starting kids off in life with assets, you create ripple effects that can last throughout their lives.

If the president were truly interested in protecting Social Security and helping increase asset ownership among Americans, he'd find willing partners for each among the Democrats. Instead, it is looking more likely that he will just widen his credibility gap and attempt to shatter one of the most successful social programs in our nation's history.

Patrick J. Kennedy represents Rhode Island's First Congressional District.