This week I am traveling to Europe to meet with my Group of Seven colleagues in London. As you might imagine, much of our conversation will focus on achieving global growth through free-market reforms, sound monetary policies and free trade. What is not as widely known is the level of interest the G7 finance ministers have in the potential for reform of our Social Security system in the United States.
At the G7’s last meetings — which took place in Washington, D.C., in April — my counterparts raised the issue of America’s Social Security debate right away. They asked me pointed questions about the president’s proposed guidelines for reform: How would it address solvency? How would we offer a permanent fix? Would we achieve bipartisan reform on Capitol Hill? And how could we permanently strengthen the system with prudent transition costs that are neutral to the government budget in the long run?
They ask these questions because many of them face similar — or worse — demographic challenges with their own national pension systems. They ask because, as the global growth leader, the financial strength of the United States is always both of interest and in their interest. And they ask because they expect the United States to set a positive economic example.
Sometimes we become so embroiled in our own policy debates that we forget the world is watching us. This is one of those times. We therefore must be reminded that being a federal representative is a position of international leadership. Saving and strengthening Social Security will primarily impact America’s youngest workers … but the actions of Congress on this issue have the potential to affect young workers all over the globe by inspiring their leaders to act with similar courage.
Every voting Member of Congress has a tremendous opportunity, this year, to remind the world why we are its economic leader. As a government, we have a chance to once again exercise good economic judgment on behalf of our constituents while setting an example for countries who seek to improve their financial futures.
We can once again lead world policy by agreeing on a solution that secures Social Security on a permanent basis. We can protect the benefits of current and near-retirees while strengthening the system and offering great hope to younger generations of workers. We can be the first country to keep the current system intact while vastly improving its future performance.
We have several important options before us as the world looks intently on. We can do nothing, deny the looming crisis ahead and have our inaction burden our children with the ever-expanding debt of an insolvent system. We can once again raise taxes and cut benefits — the easy way out that further separates Americans from the hard-earned fruits of their labor. Or we can be innovative and boldly enact voluntary personal savings accounts as part of a solution that enables each American to choose to keep more of their own money for retirement. Of this last course of action, let it be said that this is the option of freedom, the option of individual empowerment. And these are the things for which America has always stood as the beacon.
We, as a country, have a big job ahead of us, and the world is waiting to see what we do.
John Snow is secretary of the Treasury Department.