While much has been written recently about the federal budget deficit, states across the country are continuing to struggle under budget crises of their own. Most states are required by law to balance their budgets. While the federal government often carries large deficits to finance its programs and priorities even when revenues are not sufficient, this is usually not an option for state legislatures. Often, the resulting deficit financed federal policies are responsible for making state fiscal situations worse.

President Bush has been clear that Social Security reform is a top priority in his second term. Even though he has not announced a plan, he expressed his desire to allow people the option of creating private – or in Bush language, personal – investment accounts. Given the necessity of benefits cuts as well as heavy transition costs years into the future, several high-ranking Republicans have begun expressing doubts about the president’s plan. Moreover, many are beginning to question whether Social Security really has a “crisis” as Bush claims.

The 109th Congress of the United States opened last week, with much of the fanfare surrounding GOP pre-session planning (particularly ethics committee rule changes) and the decision of a few Democrats (including Senator Boxer from California) to hopelessly challenge the presidential election results from Ohio during the electoral college count on Thursday.