PERSPECTIVE ON SOCIAL SECURITY : Fix It Now or Risk a Generational War : Politicians must stand up to the senior lobby AARP and include the entitlement plan in any long-range deficit reduction proposal.

Lawmakers from both political parties continue to sell out the future of younger Americans by refusing to include Social Security, the single largest expenditure of the federal government, as part of a long-term deficit reduction plan. The consequence could be a deadly head-on collision between two generations of Americans early in the next century.

Unfortunately, our nation’s leaders are acting not from ignorance but from fear of the most powerful special interest in the country, the American Assn of Retired Persons. For too long, AARP has held Washington hostage, distorting the facts about Social Security and other entitlement programs, using scare tactics to frighten senior citizens into action and threatening to terminate the career of any politician who tries to reform our bloated and broken retirement system. And because AARP is a tax-exempt organization, all of it happens at taxpayer expense.

But AARP may be running into a serious roadblock. Sen. Alan Simpson (R-Wyo.) will hold hearings this week on the activities and tax status of this lobby. And it’s not a day too soon.

Social Security is far from secure. This massive entitlement, which consumes 20% of the total budget and is larger even than defense spending, is heading for bankruptcy on the shoulders of Generation X. Government accountants predict that, over the next 75 years, Social Security will run up a long-range deficit of $59 billion annually--$2 trillion in today’s dollars. A bipartisan presidential commission has warned that Social Security could go into deficit by 2013. Even the Social Security Administration is projecting that the trust fund (the amount the government collects beyond what it pays out each year in benefits) could be depleted in less than 20 years.

The reason is a simple matter of arithmetic. The ratio of workers to retirees is shrinking. In 1950, there were 16 workers to every retiree. Today, there are five. By 2030 there will be fewer than three. Already, almost 75% of the American work force pays more payroll than income tax. This to fund a system under which the average current Social Security recipient receives everything he paid in, plus interest, in under four years.

In contrast, today’s 25-year-old can expect to get back less than half of what she pays in. That’s if the system is still solvent. In a classic example of robbing Peter to pay Paul, Washington has allowed the trust funds to be used to offset the deficit--financing other government spending with Social Security taxes. So what happens when the bills come due?

In 2012, 46 million baby boomers will start leaving their employment treadmills for their exercise treadmills, beginning the largest migration to retirement in American history. At that point, we will face a terrible choice: Double or even triple payroll taxes on my generation and those behind us, or dramatically slash benefits to elderly recipients. The latter course would plunge millions of senior citizens into economic jeopardy. The former will trigger the biggest tax revolt since the Boston Tea Party and lead to a generational war.

Despite this looming catastrophe, both parties play off the fears of the elderly. Republicans did this in 1993 over Clinton’s modest proposal to tax a larger portion of the benefits received by wealthy retirees. Today, it is the Democrats depicting the Republicans’ much-needed attempt to rein in Medicare as a vicious plan to pull the rug out from under needy senior citizens.

This is shameless and short-sighted. Entitlements are the fastest-growing part of the budget, with spending on the elderly gobbling up almost half of all federal spending. At current levels, spending on Medicare will increase almost 70% by the end of the century; on Social Security 36%.

Most senior citizens would not be unfairly penalized by proposed reforms. Consider:

* Seniors are the most affluent segment of American society with a poverty rate of only 8%, compared with over 20% for children.

* Annually, we dish out $30 billion in benefits to retirees making more than $100,000 after taxes, half a million of them millionaires.

* The average senior citizen paid just under $84,000 into Social Security and will get back more than $300,000.

The President and Congress must find the political courage to stop bending to pressure from the senior lobby and put these sacred cows on the chopping block along with the rest of America’s bloated government programs. That America’s leaders so proudly announce their refusal to do so should not inspire us. It should scare the hell out of us.