Cheney on Social Security

VP Cheney spoke at Catholic University in Washington, D.C. yesterday and outlined three main points of the administration's reform plan:

- No benefit reductions for current retirees or those close to retirement
- Payroll taxes must not increase
- Personal Retirement Accounts

He also addressed a few of the common arguments used against reform (most of which I'd heard before and agree with), including a really great nugget about the "transition" costs:

Again, the projected shortfall in Social Security exceeds $10 trillion. That figure is nearly twice the combined wages and salaries of every single working American last year. There will be costs, no matter what we decide, but if we neglect the responsibility to act, it will be all the more difficult to preserve Social Security for generations to come.

The latest Social Security trustees' report shows that each year that we wait will add roughly $600 billion to the cost of fixing Social Security for good. That cost is far in excess of any of the so-called transition costs that have been projected for any of the plans put forward by members of Congress. Clearly inaction imposes the greatest cost of all.

This is the first time I've heard what most pundits are calling the "transition" cost ($10 trillion) described as something else and that the trustees' report's mention of the $600 billion yearly increase is larger than any estimated "transition" costs. I'll look forward to some smart people breaking down his statements, especially this one, in the days ahead.