Slashing benefits or hiking taxes—or both—is the only way to make the Social Security system solvent, reports a Treasury Department briefing paper. Treasury Secretary Henry Paulson warned that faster economic growth alone won't solve the money problems of Social Security, which faces a $13.6 trillion shortfall in the "indefinite future," Bloomberg reports.
The costs of delaying an overhaul of Social Security are "significant," warns the paper, which was aimed at identifying common ground between the administration and Democrats on shoring up the program. The Social Security program pays benefits to 49 million people and will cost $576 billion in 2007. The system is expected to be bankrupt by 2041.