Greenspan Urges Prompt Fixes to Senior Programs

Federal Reserve Chairman Alan Greenspan said Thursday that delays in shoring up the financially shaky Social Security and Medicare programs could require “abrupt and painful” adjustments when baby boomers begin retiring.

He suggested Congress consider switching to an inflation measurement that would trim billions of dollars from annual cost-of-living adjustments provided to the 46 million Social Security recipients.

Greenspan did not give the Senate’s Special Committee on Aging a formal list of recommendations. But he said lawmakers should consider trimming benefits, raising the retirement age or considering other ideas before raising the payroll tax paid by employers and employees, because that tax increase would be a disincentive to hiring workers.

He urged Congress to move as quickly as possible to fix the problems that will see Social Security paying out more in benefits than it collects in payroll taxes beginning in 2017.