The Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds (read: Social Security) released their annual report yesterday. It must be absolutely disturbing to prompt these remarks from Treasury Secretary Henry Paulson: Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues, and threaten America's future prosperity. I urge my friends in Congress to join me in a bipartisan effort to strengthen both programs for future retirees. This year's Social Security report again demonstrates that the Social Security program is financially unsustainable and requires reform. Oh, heavens! Unsustainable? What could be in the the trustees report that has Paulson proclaiming doom - DOOM! - is to befall the nation? For the trust funds to remain solvent throughout the 75-year projection period, the combined payroll tax rate could be increased during the period in a manner equivalent to an immediate and permanent increase of 1.95 percentage points, benefits could be reduced during the period in a manner equivalent to an immediate and permanent reduction of 13.0 percent...or some combination of approaches could be adopted. By raising FICA (payroll) taxes from 7.65% to 9.55, Social Security can be "fixed." Clearly not the calamity Paulson (or Robert Samuelson) would have you believe. In fact, the "entitlement crisis" that many inside and outside of the government bemoan does not exist. What we are facing is a problem with rapidly rising costs of health care.