To help fund President Bush's reform plan to add personal retirement accounts to the Social Security program, the White House admitted that it would probably use government borrowing to cover the oft-debated "transition financing" phase of a new program.
"There will be some upfront transition financing that will be needed to move toward a better system," admitted White House spokesman Scott McClellan.
In 2001, President Bush appointed a panel to study the current system of Social Security as part of his campaign theme of creating an "ownership society." One proposal being studied carefully would allow taxpayers to invest up to $1,000 per year in a personal account.
However, critics of the plan argue that the price tag for the transitional costs to another system are estimated to be in the neighborhood of $1 trillion to $2 trillion.
Proponents have pointed out the need for Social Security reform regardless of cost, quoting Social Security Administration figures showing that in 1950, the worker-to-beneficiary ratio was 16-1, while today that figure has plunged to 3.3-to-1.
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