January 27, 1997

Opponents Playing a Dangerous Game . . .

It is not surprising that protectors of deficit spending fear the ultimate proposal to end it: the Balanced Budget Constitutional Amendment (BBCA). What is surprising is the extent to which they are willing to go to defeat the constitutional amendment, jeopardizing not only America's financial security but seniors' Social Security. Their method is as simple as it is dangerous: Instead of opposing the BBCA outright, they add a provision to exclude Social Security receipts and expenditures from calculations of a balanced budget. While claiming to promote a balanced budget by 2002 and to protect Social Security, they do neither, but rather do the very opposite.

Endangering Social Security

In 1994, the Clinton Administration established the Advisory Commission on Social Security and directed it to "focus specifically on the long-term fiscal imbalance." That commission reported back on January 6 of this year. While offering three proposals to address the problem, there was no disagreement on the problem itself: Beginning in 2012, Social Security will be spending more than it collects in taxes. BBCA opponents completely ignore the report and its implications: Social Security is on a trajectory toward bankruptcy.

• Taking Social Security outside the fiscal discipline of the budget simultaneously removes the fiscal responsibility to fix the system. The reason for this is because Social Security's future deficits will adversely affect retirees and the country as a whole, but they would have no impact on the official deficit.

The longer this nation takes to address this trajectory toward bankruptcy, the more difficult and painful the ultimate solution must be. The Social Security deficit in 2050 will be more than $5 trillion -- which almost exactly equals today's total national debt.

Perverse Incentive to Play with Social Security

If Social Security were taken out of the budget picture, there would be disincentives to fix its deficit dilemma; but, more than that, there would be a perverse incentive to alter the system by either diverting funds from it or adding programs to it. Because Social Security's deficits would be meaningless for the constitutional budget, its revenues could be shifted to help balance the government's deficit books or additional government programs could be foisted onto Social Security and thus "hidden."

A Win-Win Situation for BBCA Opponents

Opponents to a balanced budget amendment to the Constitution have created a Social Security canard that gives them a win-win scenario: either they defeat BBCA and deficit spending can continue, or if BBCA is passed, their Social Security provision can hide continued deficit spending and require only temporary balance. The budget would only have to be balanced for less than two decades; after 2019, Social Security will begin running off-budget deficits.

. . . And a Lose-Lose One for America

Deficit spenders have become masterful "deceit spinners." Under the cloak of Social Security, they have sought a way to undo what everyone knows must be done: Balance the budget by 2002. Instead they promote a proposal they know would unnecessarily increase the level of cuts needed to balance the budget -- and do so to an extent they won't support. Their cynically hypocritical ploy would allow for an unbalanced budget or at best a temporarily balanced one, meanwhile jeopardizing Social Security itself.

Their honest support for deficits would be preferable to this deceit.