INTRO
The High Road To Fiscal Reform

A very misleading story about huge risks of "unfunded liabilities" damaging future generations has dominated the public debate about how to think about budget priorities. This set of claims confuses the disparate issues of how we should provide adequate social insurance for young and old with issues of fiscal responsibility and reform.

As the nation confronts the largest economic crisis since the Great Depression, we believe it is time for a reasoned and balanced dialogue about the state of our nation's finances and our fiscal future. During this period of great anxiety, uncertainty, and confusion, the public debate would benefit from perspective that informs Americans rather than compounds their fears. Full-page advertisements in newspapers depicting an ominous iceberg close at hand, for example, are not constructive in promoting reasoned responses to the genuine but manageable challenges confronting the United States.

Distinguished Senior Fellow Robert Kuttner Debates Former Comptroller General David Walker

AGENDA PROJECT: Deficit Breakfast Discussion from Century Foundation on Vimeo.

More: Watch the Q&A

How About a Bailout for Social Security?

The media's coverage of the new governmental reports showing that the severe economic recession has unsurprisingly taken a hit on the Social Security and Medicare trust funds uniformly leaves out an important fact: those two programs have proved to be invaluable to many millions of American families at a time when virtually every other form of personal financial support has collapsed. Retirees and near retirees have lost more than $10 trillion in housing and investment security wealth in the past two years, according to the Center for Economic and Policy Research. Even those who not long ago seemed relatively comfortable with modest nest eggs and a decent home now recognize they would face severe financial hardship in the absence of Social Security and Medicare. Younger workers confronting their own economic pressures who have retired parents and loved ones would face much greater burdens and stress if those two stalwart programs provided less support than they do now for the elderly.

A Vision for the U.S. Pension System at 100

More than seventy years have passed since Congress laid the foundation of the modern U.S. pension system by enacting the Social Security Act. The full structure took nearly fifty years to complete and encompasses private pensions and tax-sheltered saving, as well as Social Security. From the start, some critics thought Social Security was a wrong-headed interference with personal liberty that would undermine self-reliance. Others came to believe that however well Social Security served an industrial nation less affluent and less mobile than America is today, it is not well designed for a post-industrial, twenty-first-century America. Still others argue that the original vision, although attractive, is unsustainable because of the much-cited "entitlement crisis."

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Our Nation’s Fiscal Future: Today's Reality and Future Challenges

With the enactment of a $787 billion economic recovery plan, combined with additional federal commitments in excess of $1 trillion to help repair the broken financial services industry, many Americans are understandably fearful about the nation’s long-term fiscal health. On top of familiar concerns about the challenges connected to the pending retirement of the large Baby Boom generation, the large new investments intended to stave off a second Great Depression sound potentially overwhelming for the government. The numbers are big, the issues are complicated, and media reports related to federal deficits and debt are often enormously confusing.

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