At the heart of the Social Security debate is whether the Republicans are willing to make good the securities that have been placed Social Security Trust Fund. The following has been George Bush’s position since February, 2005.

"Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust fund."

Mr.  Bush is saying there is nothing in the Social Security Trust fund, yet he is claiming there is enough there to prevent Social Security from going broke until 2042. He cannot have it both ways! As president of the United States, he cannot openly talk about defaulting on debt. As party leader, he dare not advocate directly honoring the securities on the Trust Fund if doing so increases the tax burden of his main constituents, the corporations and the wealthy.

In 1983, Social Security taxes were hiked to accumulate enough money to meet the needs of Baby Boomers. The extra funds were put into the Trust Fund, but Congress siphoned off the money, replacing it with $1,500,000 trillion in non-negotiable U.S. government bonds. It also pays interest on these bonds. Up to now, that is about the amount of money the Treasury has not collected due to the Reagan and Bush tax cuts.

Conservatives estimate that the amount taken from the Trust Fund will be $2.8 trillion in 2017. Others estimate it at $3.7 trillion by 2013. Now that the Bush tax cuts and end of the estate tax have become permanent, the later estimate may be more on target. There is a Trust Fund crisis mounting, because it will be necessary to start cashing those non-negotiable securities in 2017. What makes it worse is that the government is now borrowing more than ever before from the Trust Fund.

Conservative think tanks and columnists are arguing that the fund is empty and the securities there are worthless, mere paper. They say the Trust Fund securities balance is "really only an accounting mechanism." Section 4 of the Fourteenth Amendment seems to guarantee all debt, but the conservative answer to this is that it is debt of another kind–what the government owes itself. If the non-transferrable securities are honored, taxation would be required. This would threaten the tax cuts that were awarded to corporations and the rich. Now you can see the reason why House Republican leaders like Bill Thomas have been talking about a national sales tax.

Another way around the problem would be to propose a privatization plan now. To meet the transitional costs of such a plan, trillions would have to be borrowed, and enough extra could be borrowed to repay the Trust Fund. As almost everyone understands by now, the privatization scheme is also an effort to convert numerous voters to Republicans.

If the privatization plan is unlikely to pass Congress, an option would be to propose drastic cuts in social security benefits for all but the poorest future retirees. This may explain why Bush offered his "Progressive indexing" For wealthy constituents, a 35% cut in benefits would be preferable to paying higher annual taxes. Asking ordinary Americans to take a 30% cut is difficult, but not as tough as imposing a 16% national sales tax. Besides, the 30% will be scaled back by Congressmen anxious to appear to be the defenders of the little guy. Placing the progressive indexing scheme on the table now suggests that Bush is assuming that there is a great deal of tacit support in Congress for defaulting on the securities in the Trust Fund. Congress has raided other trust funds, and what happens with the Social Security Trust Fund will set a precedent. Still another issue, is whether what Congress owes the Social Security Trust fund and other trust funds is part of the nation’s debt. At present, they are not counted.