The US economy is in the doldrums, unemployment is stubbornly high and Social Security, the New Deal-era safety net for older Americans, is running out of money. It is 1981.
To salvage the popular programme, President Ronald Reagan forms a commission. At its head is Alan Greenspan, the man he later makes chairman of the US Federal Reserve.
The commission procrastinates but then, in a model of backroom bipartisanship that is hard to imagine today, a “gang of nine” does a deal. Payroll taxes go up; over time, so does the Social Security retirement age, from 65 to 67.
But as Mr Greenspan recalls today, from his office overlooking Connecticut Avenue in downtown Washington, the fix was not forever. “Funding over a 75-year period was all that the political system would take. What that does is create a very large deficit in the 76th year and forward.”
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