Each generation supports the one that precedes it. 

That's how Sandy Colson of Dexter viewed Social Security while paying into the system that now helps her elderly parents live comfortably in retirement. 
So did Frank Baldwin of Ann Arbor, who watched his grandparents live out their golden years in dignity on Social Security benefits alone in the 1950s. For nearly 29 years, the former postal worker paid into the system that helped sustain his parents, and now receives benefits himself that are funded by the workers of his children's generation. 

But with Americans living longer, the impending retirement of tens of millions of baby boomers over the next few decades, and many of the nation's leaders calling for historic reforms, both Colson and Baldwin doubt whether future generations can continue the tradition. 

Latest projections indicate that by 2017, the system will be paying out more than it takes in and will rely on Social Security Trust Fund reserves to maintain promised benefits. Those reserves can continue to pay benefits in full until about 2041, according to the 2004 Social Security Trustees Report. After that, the report indicates the trust fund can pay about 73 percent of current benefits for the remainder of the trustees' 75-year projections. 

President George W. Bush and top members of his administration are crisscrossing the country touting their plans to overhaul the system via privatization, while special interest groups splash the airwaves to sway public opinion for and against. Similarly, congressional leaders with opinions on both sides of the issue are hearing from their constituents at town hall meetings, gathering ammunition for the looming battle ahead when Congress reconvenes this week. 

As the debate rages on how to best keep the system going, Colson, a mother of two young adults, and Baldwin, a father of three grown children, sit at very different points in the discussion on what they both agree is the biggest social dilemma facing Americans in a generation. 

Baldwin, who at age 70 is officially retired but still does odd jobs to help make ends meet, believes in saving the system at any cost, even if that requires a tax hike. 

"I'm proud to pay the tax, and I'd be more than honored to pay more to make sure future generations had it, it's that important for everyone," Baldwin proclaimed before more than 100 people at a recent public forum on the issue. 

But Colson, 57, said throwing more money at the system is the wrong approach. Though acknowledging the enormous strain that her generation will have on the entitlement program, she says she believes the biggest problem facing Social Security and taxpayers is the one no one is talking about. 

The Social Security Trust Fund for decades has been used by the federal government to finance other operations. The trust fund is not full of actual dollars, rather it's a large collection of IOUs that the government has no existing plan to pay back, even as the day approaches that beneficiaries will outnumber contributors. 

"Like the (late) Sen. (Daniel Patrick) Moynihan said, this money is used for paper clips and warships, and when the fund needs replenishing they'll have to go to the taxpayer," Colson said. 

Currently, about four out of every five dollars paid into the system go immediately to current beneficiaries, i.e. retirees, disabled people, widows, widowers and their children, and orphans. 

The remaining dollar is used to purchase U.S. Treasury Bonds in the system's trust fund. The annual trustees' report projects that starting in 2017, a portion of the general income tax revenues will be needed to pay interest and eventually principal on those bonds to finance promised benefits in full. 

"Eventually, those loans will have to be redeemed and I don't think people realize what's going to happen. It took me years to realize there's no money in the pot," Colson said. 

Privatization pains 

Other than its push for private investment accounts, the Bush administration has not proposed a specific plan and the president says he remains open to any and all ideas to fix what he says is a crisis, a description disputed by Democrats. 

Both sides say private accounts won't solve the program's long-term solvency, but Bush continues to promote the idea as a way for individual workers to get a better return on their investments when they retire. 

In January, the president proposed that each worker could divert up to 4 percent of wages subject to Social Security tax into private accounts. Retirement benefits currently guaranteed would be reduced by the amount of those contributions, plus anticipated interest on U.S. government bonds - 3 percent above inflation. 

Critics, such as U.S. Rep. Sander Levin, D-Royal Oak - the ranking Democrat on the House Ways and Means Subcommittee on Social Security - argue that taking money out of the current system would only decrease benefits for current recipients or lead to massive borrowing, and accelerate the system's shortfall instead of ensuring long-term solvency. 

"Privatization of Social Security would over time mean its dismantling, and it does nothing to fix the shortfall," Levin said. 

U.S. Rep. John Dingell, whose father as a congressman helped draft the Social Security Act signed into law by President Franklin D. Roosevelt in 1935, said the Bush administration's ideas cut deeper. 

Using slide presentations that included a photo of his father proudly looking on as Roosevelt signed the legislation, Dingell, during a series of public forums last month in Washtenaw County, portrayed the administration's reforms as a fiscally irresponsible overreaction. He said they would stifle the economy by hiking interest rates and put more financial futures at the mercy of the stock market. 

Dingell based his presentation on what the White House has released publicly to date and recommendations offered by a presidential commission on the topic co-chaired by Moynihan in 2001, aides said. 

The commission concluded the system needs an overhaul and has evolved to a point where private accounts should be included. 

But not on a system dependent on borrowing, Dingell argues. 

Not only would the government need to borrow trillions of dollars to cover current recipients while workers establish private accounts, but people opting out of the system would be investing money essentially borrowed from the Social Security Trust Fund. 

Workers would independently invest a portion of their taxes into private investment accounts, but the diverted money will have to be paid back at some point, theoretically from investment income, Dingell said. 

An average wage-earner who works from age 22 to 62 would ultimately owe $152,000 to the Social Security Trust Fund whether they've made money in the market or not, Dingell says. Then participants would have to purchase an annuity to ensure the government does not lose the money owed if it is not paid back before they die. Together these factors create a phenomenon Dingell described as the "grab-back." 

"This administration has proposed the privilege of forcing young people to borrow money from the government and put it in the market to gamble with," he said. "They'll still have to pay back every nickel." 

The idea of borrowing money taxed from earnings and risking it on the market doesn't seem like a wise idea, said Christal Phillips, a 22-year-old University of Michigan student. 

"I don't think I should gamble my entire retirement on the stock market, and I didn't realize I'd have to pay money back," the women's studies major said after watching Dingell's presentation on campus with more than 100 other students and community members. 

That has some advocates of privatization changing their minds. 
"I was for privatization until I heard the Bush plan," said Robert Hess, 76, of Plymouth. "They're charging us interest and making us take the risk, which seems like they are just trying to offload the obligation to somebody else." 

Though transition costs for privatization give him pause, U.S. Rep. Joe Schwarz, R-Battle Creek, said the notion of a grab-back, or crawl-back, is wrong. 

"There is no crawl-back," said Schwarz, reiterating what Vice President Dick Cheney said while standing beside him at a ticketed forum on the topic last month in Battle Creek. "It's the traditional Social Security benefit at a reduced rate minus what's put into a private account." 

Support may be waning among younger workers, according to a recent poll. 
Less than half of young adults ages 18-29, primarily the strongest supporters of the suggested reforms initially, now support creation of private accounts, according to the March poll by the Pew Research Center for the People and the Press. 

That's down from 54 percent in December. The poll, which also indicated 40 percent of young adults oppose the accounts, has a margin of error of 3 percent. 

"Privatization does not look like the answer, but I reject the idea that it's OK to be paying 70-80 percent of promised benefits after (2041)," said Daniel Hessel, 17, who attended Dingell's forum on the U-M campus. "I think we should maximize what's there for us and make the changes necessary to do it." 

Democrats like Levin speculate the president has softened his stance on privatization as a result of the dwindling support, yet they believe the administration still considers private accounts a necessary part of any overhaul. 
Though public support appears to be waning, the president may have gotten a boost in the trustees' annual report. 

The report indicates the date at which Social Security will pay out more than it takes in moved up to 2017, a year closer than last projected. Similarly, the date at which the system will no longer pay 100 percent of promised benefits crept forward a year to 2041, the report states. 

Rather than sound alarms, however, Levin said the negligible change indicates a stable system requiring only minor adjustments. 

Democrats also point out that in 1997, the trustees predicted the trust fund would run out in 2029, demonstrating that even without changes to the program, the nation's economic performance since then added at least 13 years to the estimated crisis point. 

Republicans on board? 

While nearly all congressional Democrats are skeptical of the proposed changes and solidly oppose privatization, Republican response has been mixed. 
Schwarz said privatization should be considered an add-on to any legislation once the system is financially sound. 

"I haven't embraced anything yet," he said after the event with Cheney. 
"But the proposal I will embrace will first make sure it is actuarially sound." 

U.S. Rep. Mike Rogers, R-Brighton, said he supports giving individuals more control of their Social Security taxes and addressing long-term solvency. Yet how to fund privatization remains a hang-up, he said. 

Rogers was more critical of Democrats' demands to remove private accounts from any pending discussions on reforms. 

"I hope to have an honest debate, but we have not had that yet, I'm afraid to say," he told business leaders in the Brighton area at a breakfast meeting last month. 

Levin said Bush set the agenda that prioritizes privatization and that Democrats who disagree are tackling that first item before moving on to other issues. 

But Democrats are light on reasonable alternatives, said Ann Arbor resident Allen Stewart, 78. 

"I think the president does not have a viable solution for the problem, it's just talk. But the other team has not come up with any solutions or ideas," he said.
 
When pressed during the forums, Dingell said eliminating the $90,000 cap on payroll deductions and making all income subject to the Social Security tax would make it actuarially sound. If the Bush tax cuts are not extended, the system could be solvent "as far as the eye could see," he said. 

Rogers said the tax cuts are needed for economic stimulus and are responsible for recent economic improvement. Secondly, he said, those high-income workers represent a significant chunk of job creators and increasing their taxes would not only hurt present-day job creation but further deplete the trust fund over time by creating a depressed job market. 

"In today's economy, do you really want to pull roughly 15 percent out of the economy and give it to Washington?" he said. 

Schwarz said that a combination of raising the cap, switching the Social Security formula from wage- to price-indexing, and increasing the retirement age should all be discussed. 

And it should happen sooner rather than later, since many politicians face re-election next year and 2017 is creeping closer and closer, he said. 

Stewart, a longtime Republican, said Democrats should be ashamed that Bush is setting the Social Security agenda and they should be the driving force behind reform. 

"This is their program and I think Democrats have to look at themselves in the face and say it's not up to Bush to solve this problem, it should be up to them," he said.