In a statement by Treasury Secretary Henry Paulson on the 2008 Social Security and Medicare Trust Fund Reports, the Secretary reaches deep to find big bad numbers to support his and the president's call for reform of the Social Security program. Social Security's unfunded obligation--the difference between the present values of Social Security inflows and outflows less the existing Trust Fund--equals $4.3 trillion over the next 75 years and $13.6 trillion on a permanent basis. To make the system whole on a permanent basis, the combined payroll tax rate would have to be raised immediately by 26 percent (from 12.4 percent to about 15.6 percent), or benefits reduced immediately by 20 percent. The "permanent basis" to which Paulson is referring is an infinite time horizon. That's right, the report says that a 3.2 percentage point increase in Social Security taxes is required to bring the program into actuarial balance forever. But, the report also says that to bring the program into balance over the next 75 years would require a 1.7 percentage point payroll tax increase - that's about half the increase the Paulson quotes and not quite as scary. I also want to point out Paulson's citation that to bring the program into actuarial balance on an infinite time horizon would require cutting Social Security benefits today and forever by 20 percent. Immediately cutting benefits by 20 percent to avoid a chance of insolvency would be really stupid, because, as the report points out, when the trust fund is exhausted in 2041 - the date of insolvency - tax revenues will be sufficient to cover 78 percent of promised benefits. Got that? In 2041, we can cut benefits by 22 percent and maintain solvency forever.