The Future of Social Security

The Future of Social Security

New York City


New York City

William Greider’s “The Man Who Wants to Loot Social Security” [March 2] grossly misrepresents Pete Peterson and the Peter G. Peterson Foundation’s views on Social Security reform and overlooks some large and inescapable truths.

Both Republicans and Democrats in Washington have charged everything to the nation’s credit card, including tax cuts and spending increases, without paying for them. Washington’s imprudent, unethical and even immoral behavior is facilitated by a lack of transparency and accountability. As of September 30, 2008, the government was in a $56 trillion-plus fiscal hole, according to its official financial consolidated statements. This amount is equal to $483,000 per household and $184,000 per American. Left unchecked, this burden will rise every year by $6,600 to $9,900 per person, even with a balanced budget.

The nation’s bedrock social safety programs, Medicare and Social Security, are not in danger of being looted–they already have been looted. The government has already spent any related surplus and replaced it with nonmarketable IOUs, which it doesn’t even consider liabilities. In addition, Medicare is already drawing down on these IOUs, and Social Security will start doing so within ten years.

Greider is correct in saying that the government will have to repay what it borrows from Social Security–but how will it do so, and what level of tax burdens will be required to meet our growing Social Security, Medicare and Medicaid obligations without fundamental reforms?

As a US comptroller general from 1998 to 2008 and a former public trustee of Social Security and Medicare, I share Pete Peterson’s deep commitment to preserving a strong, sustainable safety net for all Americans, including seniors. And contrary to the impression one could draw from Greider’s article, Pete and I both support the concept of a sound defined-benefit program for Social Security supplemented by additional automatic savings accounts for individuals.

At the same time, Pete and I also believe that the process one employs is critically important when transformational changes are needed. We have sadly concluded that the “regular order” in Congress is broken and that achieving progress on multiple fronts within a short time frame is not possible on a piecemeal basis.

What does this mean? The president and Congress need to work together to establish a Fiscal Future Commission (or task force), which, unlike most Washington commissions, would be designed to accelerate action and get the ball across the goal line rather than punt it down the field. Ideally, this bipartisan commission would be created by statute to ensure buy-in from Congress and the president. It should include selected and diverse members of Congress and of the administration as well as nongovernment officials. It should engage the public outside the Beltway, including by leveraging digital technology and the web. Everything, including budget controls, entitlement reforms, spending constraints and tax increases, would be on the table. After engaging the public and key stakeholders, it would make a range of recommendations that would be subject to an up-or-down vote in Congress.

Greider is incorrect in claiming that such a commission would be a backdoor attempt to cut benefits or “dismantle the Social Security entitlement.” A commission, and ultimately Congress and the president, would be required to look at many alternative solutions to these structural fiscal challenges and make recommendations designed to put us on a more prudent and sustainable path.

It is disappointing that Greider and The Nation on its misleading cover have used hyperbole to falsely impress upon readers that Pete Peterson is trying to “loot Social Security,” or that he is alone in trying to address Social Security’s financial challenges. Indeed, a growing number of prominent individuals spanning the ideological spectrum support the need for dramatic and fundamental reforms of several of our nation’s programs and policies.

Why is a diverse coalition supporting this growing movement? Because there is an increasing consensus that our policy of ignoring our fiscal realities by spending the Social Security surplus, ignoring out-of-control healthcare costs, running operating deficits and relying increasingly on foreign lenders serves to threaten our collective future. In my view, our country is deeply fortunate that Pete Peterson is willing to dedicate a significant portion of his net worth to help keep America strong and the American Dream alive for future generations.

DAVID WALKER, president and CEO
Peter G. Peterson Foundation

Ann Arbor, Mich.

Thanks for exposing the (most current) attempt to undercut Social Security. William Greider is one of today’s all-too-rare exemplars of genuine noblesse oblige in action–a true national treasure. With most in the know bought off, the indefatigable and undauntable Greider fights on. Thanks for giving him, thus us, the space his work deserves. In Greider’s honor, I sent off the following advice to the Peterson-captured David Walker:

“The Peterson shell game has been outed. Get out of there while you can–that is, while you still have the reputation you earned working in the daylight. I know it sounded nice. But so did ‘derivatives.’ Both depended on no one really understanding what was going on. Now we do.”


New York City

As a founding member of the National Academy of Social Insurance (, I want to express my deep appreciation for William Greider’s article on the threats that a “bipartisan entitlement commission” poses to the future of Social Security. His assessment is correct. Thank you for drawing attention to this issue, as the Obama administration’s forthcoming “fiscal summit” runs a real risk of falling into the trap set by longtime foes of social insurance in general and Social Security and Medicare in particular.


Greider Replies

Washington, D.C.

David Walker is offended, but if you read his letter closely he more or less confirms what I wrote about the establishment’s assault on Social Security and other entitlement programs. I said they want to loot Social Security. He says it’s already been looted. I said they are trying to evade the regular processes of representative democracy. He says Congress is “broken” and so cannot be trusted to make sound decisions in a timely manner. Do they want to whack benefits for Social Security recipients, as I claimed, or don’t they? Walker declines to answer the question. Readers can decide for themselves whom to believe.


Correction: Those Pesky Decimals

There were three computation errors in Christopher Hayes’s March 2 “Cut the Military Budget.” The Pentagon budget request represents a 13 (not 12) percent increase over last year’s budget. The reported Obama Defense Department appropriation would represent a 2.2 percent increase over last year’s budget (not 8 percent). And regarding the F-22 Raptor fighter jet, $3.4 billion divided by 95,000 works out to $35,800 per job (not $35.8 million). So it is not true that “more jobs would be created by hiring people to shred the money.” We deeply regret the errors and have FedExed a new abacus to our Washington bureau.

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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