"The U.S. Treasury recently reported that the federal deficit will hit a record high of $311 billion for the first half of the fiscal year, thanks in part to plunging corporate profits and revenues. The report was greeted with stifled yawns by official Washington. Similar indifference greeted the Social Security and Medicare trustees when they issued their annual spring warning about an even bigger fiscal time bomb: exploding entitlement costs.

The trustees are used to being ignored, but this year's warning is more serious than ever: In 2008, the oldest of 77 million baby boomers will reach the age of eligibility for Medicare and Social Security. It is the beginning of an unprecedented demographic surge that threatens to overwhelm the nation's finances if we don't act, and soon.

To this end, members of the Brookings-Heritage Fiscal Seminar, a nonpartisan group of 16 federal budget and policy experts, of which I am member, have hammered out an innovative plan for averting a fiscal meltdown. The basic idea is simple: Take entitlement spending off auto-pilot, and establish a fixed, overall budget for the programs."

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