The Heritage NOdometer

For the moment at least, courtesy of the Heritage Foundation, I am displaying their NOdometer on the left (Hat Tip to Porkopolis, where I first saw it).

Heritage explains it all (except for my clearly identified editorial change):

The NOdometer display shows the outstanding debt owed to the Social Security Trust Fund. Congress will have to raise taxes, reduce Social Security benefits, reduce other spending, or borrow more when it comes time to repay the Trust Fund–starting in 2017, according to the Social Security Administration.

Without reform, future taxpayers will be paying down the Trust Fund debt until 2041. But things don’t just get better then. When the trust fund is finally paid off in full, Social Security will face annual deficits just under $400 billion (in 2004 dollars), relative to the benefits that it has promised. Under present law, Social Security would have to cut benefits across the board by about 25 percent. The only alternatives are raising taxes, cutting away entire government departments serious cuts in and/or elimination of other government programs, or borrowing more money.

For Social Security, time is money. The longer lawmakers delay fixing Social Security, the more painful the fix will be. This year alone, the debt owed to Social Security will increase by over $60 billion.

None of the facts in the above narrative are in dispute.

The NOdometer isn’t displaying very well in my favorite browers (Firefox and Safari for Mac), but apparently looks okay in IE for Mac and Windows (if I’m wrong please e-mail me).

I have contacted (begged) Heritage to produce a thinner version that doesn’t display the last six numbers, but for the time being I’ll leave the current version up.

UPDATE: Well, well. Now it looks fine in all browsers and is thinner. Don’t know whether to give thanks to my web guy Charles, or Sami at Heritage, or both. Each of you can take the credit as far as I’m concerned.

The rounded figure currently on display is $1.72 TRILLION.

UPDATE 2: BizzyBlog’s impeccable sense of timing fails again, as the Bush Administration appears to be wimping out either wimping out or playing a trump card on private accounts (see Update 2A for more):

Washington - With the acquiescence of their leaders, key House Republicans are drafting Social Security legislation stripped of President Bush’s proposed personal accounts financed with payroll taxes and lacking provisions aimed at assuring long-term solvency.

Instead, according to officials familiar with the details, the measure showcases a promise, designed to reassure seniors, that Social Security surplus funds will be held inviolate, available only to create individual accounts that differ sharply from Bush’s approach.

Under current law, any Social Security payroll tax money not used to finance monthly benefits is in effect lent by Social Security to the Treasury, which uses it to finance other government programs. Government actuaries say the surplus is expected to vanish in 2017 when benefit payments exceed payroll taxes collected.

In addition, the GOP bill “doesn’t deal with solvency,” according to another official, indicating it would avoid the difficult choices of curbs on benefits, higher taxes or changes in the retirement age needed to implement the president’s call for long-term financial stability.

The officials who discussed the measure Tuesday did so on condition of anonymity, saying they were barred from disclosing details until a formal release today.

There may be a trick up someone’s sleeve here, but I don’t see it. Mr. Bush, my kids, if they were allowed, would quietly curse you. Mr. Bush, I think I get it, now carry through with it, and my kids will love you.

UPDATE 2A: Well, there is a “trick” in the sense that the Administration appears to be shifting the debate from “carving out” contributions to using the excess of FICA taxes over benefits paid for the next 12 years to build phased-in private accounts. The money in these accounts would be invested in the first few years in US securities and after that individuals could move some or all of the money into other (presumably pre-approved index-fund) investments.

That’s a very brief description of what is described at the Opinion Journal editorial today, which is essentially a pre-emptive leak from a couple of congressmen pushing the idea (with almost certain administration support).

The devil is in the details of this “invest-the-surplus” idea, but it looks promising (in fact, I’m tempted to say brilliant, but am holding back to see if the administration will put its political capital fully behind it).

The immediate question is what is the rest of the government going to do when it can’t steal this money any more, but that’s a good debate to have, because it exposes the well-hidden truth that the government has been getting by for 30-plus years only because it has “borrowed” Social Security surpluses and used it to fund everything else.