June 16, 2005 | News Releases on Social Security
WASHINGTON, JUNE 16, 2005-Doing
nothing can be expensive: in the case of Social Security, $120,000
That's the rate at which outstanding debt to the Social Security Trust Fund is piling up-and how much more future taxpayers will be billed to keep the New Deal program fiscally sound without serious reform, according to the "NOdometer," the latest feature on The Heritage Foundation's Web site, heritage.org.
The NOdometer, a debt tote board that resembles a car's odometer, shows how much saying "no" to Social Security reform will cost future generations of Americans. "Social Security's financial situation is untenable in the long run and getting worse with each passing day," says Rea Hederman, a Heritage expert who provided the NOdometer's calculations. "The longer lawmakers delay fixing Social Security, the more painful and expensive the fix will be."
This year alone, the debt owed to Social Security will increase by more than $60 billion and the system's 75-year deficit will increase by at least $600 billion, Hederman said.
Without reform, government will have to start paying down the trust fund's debt in 2017-either by raising taxes, slashing other federal spending or borrowing more money. The debt payments will enable the system to pay full benefits until 2041. At that point, the debt will have been fully repaid, and the trust fund will face annual deficits of just under $400 billion (in 2004 dollars).
Under present law, Hederman notes, Social Security would have to cut benefits across the board by about 25 percent to bring 2041 benefits in line with trust fund income.
Heritage hopes the NOdometer will raise awareness that "Social Security must be reformed sooner, rather than later," Hederman said. The organization is encouraging other pro-reform groups to add the NOdometer to their own Web sites. Instructions on how to copy it for use elsewhere can be found at: heritage.org/Research/SocialSecurity/NOdometer.cfm.
With more than 200,000 individual, foundation and corporate supporters, The Heritage Foundation is the most broadly supported public policy research institute in the country. The 32-year-old institution has a staff of nearly 200 and an annual budget of $38 million.