President George W. Bush's second term may prove as controversial on the domestic front as his first term did internationally. His administration has set its sights on far-reaching reform of Social Security, the centrepiece of Roosevelt's New Deal. In the absence of a specific White House proposal it would be premature to offer any final judgment. But there are reasons to question the assumption that part-privatisation is the answer to America's public pensions challenge.

The president's men like to argue that Social Security faces a funding crisis. This overstates the case. The scheme takes in more than it pays out, creating a notional trust fund that will not peak for more than a decade. Thereafter the accumulated surplus will diminish, but it will be 2042 before it runs out, and even then the present level of contributions will cover more than 70 per cent of obligations. For sure, there is a funding gap, bigger the further you look out. But it is a gap the US can easily afford to bridge.