OPINION: McCain Digs Own Hole on Social Security

Sen. John McCain (R., Ariz.) stepped into controversy on Sunday by backing away from his previous support for private Social Security accounts and leaving himself open to charges of flip flopping on his opposition to new taxes.

When asked about creating private Social Security accounts, McCain responded that he favors "putting everything on the table and coming up with an answer." Does he support private accounts, higher taxes, or lower benefits? It's no longer clear.

McCain's difficulty in articulating a clear position underlines the complexity surrounding the Social Security debate. What can be done to fix it?

Social Security came into being as part of the "New Deal" authored by President Franklin D. Roosevelt in the 1930s. It was intended to offer social insurance to the elderly and provide a safety net. It has succeeded in this regard with very little overhead: less than 1 percent.

So, what's wrong with Social Security? In 1983, the Greenspan Commission, led by Alan Greenspan prior to his becoming chairman of the Federal Reserve, sat down to address the coming shortfall in Social Security benefits as the "baby boomer" generation neared retirement. The commission recommended that payroll tax proceeds be placed in a trust fund (or OASDI fund). Some say the OASDI doesn't exist because the government has borrowed from it to fund our federal deficit. Legally and practically, the OASDI will remain in place.

According to the most recent report by the Trustees of the Social Security Administration, the OASDI will start to pay out more than it takes in by 2017. In 2041, the OASDI will be gone. If nothing changes, benefits would be reduced to 75% of their current levels.