The Democrats drew a 50-50 split in the Senate yesterday on their resolution that read, “Congress should reject any Social Security plan that requires deep benefit cuts or a massive increase in debt.” The Democrats insist that any reform plan involving personal retirement accounts, which President Bush advocates, would require at least one of the two – so they’re unwilling even to consider proposals that allow participants to invest their Social Security dollars in their own personal accounts.

Well, let them – and President Bush, for that matter – cast their peepers over the Ryan-Sununu plan. It was introduced last year, and Senator Sununu, a Republican of New Hampshire, announced yesterday his intention to introduce the bill again in the 109th Congress. He put paid to the argument that personal accounts would require either massive debt or benefit cuts, saying, on the floor, that the reason to take up his plan is precisely “so we avoid $12 trillion of unfunded debt that our children and grandchildren will be stuck with if we don’t act now.”

The Granite State numbers cruncher asserted that his legislation is scored by the Social Security actuary as making the system solvent and bringing it into balance permanently, while offering significant personal accounts and not requiring benefit cuts. Participants would be allowed to build tax-free personal accounts with 10 percentage points of the current 12.4% Social Security payroll tax on the first $10,000 of wages each year. On taxable wages above that, they would be able to devote 5 percentage points of the 12.4% tax to their accounts. That means participants would shift an average of 6.4 percentage points of the Social Security payroll tax to their accounts, with low-income earners able to invest more of their payroll tax than earners of high incomes.

Participants would choose investments by picking a fund from an approved list. The government would guarantee that each recipient gets at least as much as Social Security promises now, should their investments fail to yield an adequate return. But in most cases benefits from the personal accounts would substitute for a portion of traditional Social Security benefits, based on the amount each individual chose to place in a personal account or paid into the traditional system.

That’s how the plan makes Social Security solvent. “The benefit obligation is largely transferred over to the personal retirement account and that is how the accounts bring Social Security into solvency,” Rep. Paul Ryan, a Republican of Wisconsin, told us. The personal accounts in Ryan-Sununu are larger than those proposed by the White House, but the larger accounts help overcome Social Security’s long-term deficits without cutting benefits. “First of all, the bigger the account, the sooner the system comes into solvency,” said Mr. Ryan.

To finance the short-term transition costs, Messrs. Ryan and Sununu propose to devote all the Social Security surpluses projected until 2018 to covering the initial shortfall in Social Security revenues. They also expect increased revenue from economic growth created by increased saving and investment. Most important, “We do primarily rely on constraining the growth of federal spending by 1 percentage point for eight years,” Mr. Ryan told us, noting that his reform would still leave spending growing 1 percentage point higher than it did during the Clinton administration. “If Congress can get its act together and control the growth of spending, then we can save Social Security,” he said.

The plan would involve some additional federal borrowing in the short term. But, according to an official score by the chief actuary of Social Security, the plan would start to produce surpluses by 2025, which would pay off the initial debt entirely by 2047. The plan would require some belt-tightening in the short term. But the fiscal impact would not be as painful as the tax increases or benefit cuts that would be required to sustain the current system. Mr. Ryan tells us he expects to reintroduce the bill “within a week or two,” after he receives updated numbers from the actuaries. If the Democrats won’t even discuss it, they’ll have to explain themselves to the voters come 2006.