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The Social Security Trust Fund is facing a serious financial crisis -- by 2014, benefits will cost more than the program takes in each year in taxes. By 2034, the Trust Fund’s surplus will be completely exhausted and annual program taxes will cover only 71 percent of benefits. That places the retirement security of millions of Americans in serious peril -- unless we take action now to correct this problem.

The Social Security crisis is primarily a function of demographics. Aging "baby-boomers" will begin retiring in ten years, resulting in a 75 percent increase in the number of people age 65 and older by 2025. Similarly, people are living longer -- more than six years will have been added to the average life expectancy by 2030.

The end result is startling. In 1940, during the early days of Social Security, there were forty-two workers paying into the Social Security Trust fund per beneficiary. Today, there are only three workers per beneficiary. In 2035, there will be only two workers per beneficiary. Given these significant demographic shifts, it is obvious that the current pay-as-you-go system cannot guarantee the retirement security of future retirees -- unless we institute massive tax hikes or drastic cuts in benefits.

Instead, we must institute fundamental reforms to the nation’s Social Security system -- looking at the possibility of allowing people to invest a portion of their own money. Should private investment of this sort be an option, I would advocate letting individuals choose between a range of stocks. Opponents of this plan -- largely Democrats -- have already charged that the American people would become too confused by the range of choices, with many making bad investment decisions. But they ignore the fact that nearly 50 percent of American households currently invest in the stock market. Many 401(k) and 403(b) plans are largely self-directed, with people making their own investment choices. The American people are smarter and more savvy than many Democrats give them credit for.

Under no conditions would I support the approach advocated by President Clinton that would make the federal government responsible for investing the funds in the stock market. Conflict of interest and improper political influence in the selection of stocks would be inevitable. Even Federal Reserve Chairman Alan Greenspan agrees. He recently testified before Congress that, even with Herculean efforts, it would be impossible to protect the trust funds from political pressures to invest money inappropriately.

Alan Greenspan is right. Once the government gets its hands in the cookie jar, decision-makers cannot resist the temptation to wield their new-found power. First, the government will refuse to buy stocks in companies that, for example, invest in nations like Syria and Iraq. Then the government will prohibit investment in stocks of politically incorrect companies such as cigarette and gun manufacturers. Next, it will limit investment to companies that maintain a certain percentage of minority employment or that donate a certain level of profits to charities. It is a slippery slope that will lead to a government takeover of a part of our economy.

Similarly, Chairman Greenspan noted that the rate of return on government invested funds is typically lower than comparable private pension funds. So not only would the President’s plan be harmful to the American economy, it would also be an inefficient investment.

The Republican Congress has taken strong steps to shore up the current system. We stopped the 30-year raid on the Social Security Trust Fund by ensuring that every penny of the trust fund will be used only for the retirement security of our seniors. This put an end to the practice of big spenders using the retirement security of our seniors as a slush fund for more government bureaucracy and unnecessary federal programs. We maintained this fiscal discipline even as we move forward with paying down trillions of dollars in national debt that out of control spenders in Washington have amassed over the past three decades. In contrast, President Clinton’s budget from last year would have robbed more than 40 percent of the trust fund for more federal spending and eighty new programs.

One thing is certain -- the American people need to wake up to this looming retirement crisis. Leaving the current system intact is not a sustainable alternative. In fact, inaction would be a disaster. The time for action is now. We must set partisanship aside and come together to increase retirement security for all our people.