Since Social Security’s long term budget constraint has been responsible for significant forward benefit cuts, it may not be as feasible, or as easy, to make these cuts in future benefits if there is now the tradition of making general revenue transfers to fill Social Security’s revenue gaps. What may encourage national saving in one budget may discourage it in another.
Indeed, given the global economic slowdown resulting from the continuing financial crisis, it is important that we remain united in our efforts to minimize its adverse impact on our country and our people. Ensuring the availability of market liquidity is a critical element in a comprehensive approach to avoiding a severe slowdown.