As the economy weakens, a cut of that size is bound to undermine Social Security by eroding the budget surplus created to guarantee its solvency. Or is that exactly what the administration would like to see happen in order to prove its case against Social Security?

So far, everything we've heard about Social Security going broke has been ideologically skewed to favor the interests of the brokerage industry and right-wing think tanks like the Cato Institute and Concord Coalition.

How do anti-entitlements conservatives conclude that Social Security is in trouble? By choosing statistics deliberately meant to panic the public. They assume a growth rate even lower than Social Security's hyper-modest estimate of 1 or 2 percent. They assume that health care inflation will continue at today's high rate forever.

Most frighteningly, they assume the United States government won't be able to honor the Treasury bonds in the Social Security trust fund. They leave unexplained how the Treasury could default on just those bonds and not on all of its bonds held in private portfolios, a catastrophe that would create global chaos.

Helped by the news media -- always in search of ``sky-is-falling'' sensationalism -- such predictions have done a superb job of obfuscating the issue. Certainly those who reject big government programs on principle have a right to advocate privatizing Social Security.

But surrounding one's proposal with false rumors of doom distorts the historical record.

Social Security underwent its last major adjustment in 1982 when Alan Greenspan designed a formula to earmark funds for the retirement of the baby boomers through about 2040. The budget surplus that is now such a political football was generated by that fix.

But that fix, which will see every last boomer into retirement, needs to adjust for the longevity Americans enjoy. Starting with the boomers, the life expectancy of future generations may reach to age 90 and beyond.

There are several ways to cope with that. The Social Security tax, which is divided between employers and employees, could be gradually raised (say by one-tenth of a percentage point per year) from 12.4 percent of payroll to 14.5 percent. Or we might combine that with removing the $80,400 cap on earnings taxable for Social Security or perhaps with making capital gains taxable for Social Security.

The Social Security Administration estimates that such reforms would achieve actuarial balance for the next 75 years. Whenever you hear how ``painful'' it will be to save Social Security, note the extent of that pain: an imperceptible increase in the payroll tax to pay for the many extra years of life modern medicine has given us. That's all it takes. Only those who oppose any increase in taxes can see that as intolerable.

The most important fact about the Social Security ``crisis'' is that, as things now stand, there is no crisis. Our economy is more than productive enough to afford a generous retirement for its workforce. That's why Social Security has enough resources (in current taxes and Treasury bonds) to pay its bills for the next generation. Those who would privatize the system are asking us to place more trust in the brokers who gave us the dot-com debacle than in a program boasting a 60-year record of fiduciary reliability and backed by the full faith and credit of the Congress.

If there was ever a Catch-22, the Social Security issue is it. Those best qualified to discuss reforming the system are those who recognize there's no need for reform. As financial columnist Jane Bryant Quinn observes, ``Contrary to popular belief, Social Security isn't going bankrupt. . . . The problems are fixable, with incremental changes in benefits, taxes and, eventually, borrowing.'' (For a more detailed explanation of these options, see ``Social Security: The Phony Crisis,'' by Dean Baker and Mark Weisbrot.)

But by opting for tax cuts and ``star wars'' spending that will devour the surplus, the Bush administration could make sure that the phony Social Security crisis becomes a real one.

The president insists the surplus belongs to the people. That's true. So do fiscal obligations like the national debt and the cost of entitlements. The Social Security surplus is the nest egg Americans have quite responsibly set aside over the past 20 years to provide for baby boomer retirement. Squander that money, and dire predictions about the future of the system could come true.

Theodore Roszak's latest book is ``Longevity Revolution: As Boomers Become Elders'' (Berkeley Hills Books, www.berkeleyhills.com).

© 2001 The Mercury News

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