Today is the first day of President Bush's Economic Summit, which will address issues such as budget and tax reform, health care, and social security. Social security has been widely discussed recently, as this administration has made clear their intent on overhauling the program. According to this New York Times article, however, plans to reform social security may result in significant benefits cuts for retirees in the future due to many factors, including the size of transition costs. Bush recently stated that he was opposed to the idea of raising payroll taxes to offset transition costs.

Senator Lindsey Graham (R-SC), one of the original proponents of reform, very recently warned however that borrowing the entire sum of transition costs to reform the program would be irresponsible. Because of current budgetary constraints, Graham told Fox News Sunday he supports temporarily lifting the program's tax base, or pushing up the $87,900 cap on personal income subject to Social Security. He said, "I don't think you can make the tax cuts permanent, have alternative minimum tax relief, and borrow the entire transition cost--which is over $1 trillion, and have debts that we can sustain."

To read more about Graham and the social security debate, click here and here.

Yesterday, the government reported that America's trade deficit widened in October at a record monthly rate. BNA news services reported, "A major contributor to the October deterioration in the deficit was the oil import bill, as the price of oil rose 11 percent to a record $41.79 a barrel from $37.62 in September."

The trade gap widened a total of 9 percent from September to October. The deficit in September was $50.9 billion, and the deficit in October was $55.5 billion. The total deficit tally for the first ten months of 2004 was $500.5 billion, which is a significant increase when compared with the deficit tally for all twelve months of 2003, which was $496.5 billion. As a New York Times editorial pointed out today, the United States "is now on track for a trade deficit of more than $60 billion next June."

The continuously high trade deficit is not good news for the return on our dollar. The dollar is currently down 55 percent against the euro, and 22 percent against the yen. To read more about the dollar and the implications of the trade gap, click here. To read about President Bush's latest comments on the current strength (or weakness) of the dollar, click here.