Social Security Round-up for 2/27
So does that mean that Social Security is only adding $41 billion to the deficit this year, instead of the $695 billion I saw in the papers? No. It’s adding zero to the deficit. This self-funded program is forbidden by law from ever adding to the deficit. It has a $2.6 trillion (that’s “trillion” with a “t”) surplus and will return to profitability in a couple of years, before finally using up its surplus so that it can pay “only” 75% of benefits — nearly three decades from now. There are easy fixes for that, especially lifting the cap on the payroll tax. But apparently anything that discommodes the glitterati doesn’t fit the prevailing narrative. Whatever the reason, everybody’s pretending that option doesn’t exist.
Why do reporters parrot misinformation about Social Security? It’s probably done in the name of balance and a centrist approach. Trouble is, the center on this issue has been pulled so far right that the Beltway consensus portrays Social Security as a program in crisis and a main driver of the federal budget deficit.
But the consensus is wrong, and so is much of the reporting.
*Check Please? Republicans Propose Major Cuts To Social Security Administration | TPMDC:
House Republicans will wait until the budget fight this spring to attack Social Security head-on. But in the meantime, they’re coming after America’s favorite entitlement at an angle. In the current spending bill, they’re proposing to slash the administrative funds that federal employees use to run the program. Democrats warn this will lead to furloughs and other service interruptions that could delay checks and prevent new retirees from enrolling.
*Joe Conason: Why Do They Hate Social Security? – Truthdig:
First, let’s remember that Social Security actually provides support at a very modest level. Last year, the average retirement benefit was $1,170 a month, or about $14,000 a year, with the average disabled worker or widow receiving slightly less.
…
More important than those comparative statistics is the fact that the great majority of Social Security beneficiaries have no other cushion for their retirement—not because they were lazy or improvident, but because their wages were simply too low to permit much savings, let alone investment.
*Social Security Options in the Grand Bargain | FDL News Desk:
By contrast, if you want to impose the burden for bringing Social Security into long-term balance on those who can afford it, you can simply eliminate the payroll tax cap and solve the entire problem, keeping Social Security solvent for at least the next 75 years, according to the Congressional Research Service.
It’s just not that hard a problem, and certainly not something that needs to be thrown into a grand bargain in order to bully Democrats into supporting it.
*WWTOD: What Would Tip O'Neill Do? | OurFuture.org:
Let’s begin by assessing the claim implicit in the first part of the President’s message: That the imperatives and conditions for reforming Social Security are as strong now as they were in 1983.
An honest interpretation of the facts shows this to be a false analogy. Neither the imperatives, nor the conditions for Social Security reform in 2011 are what they were in 1983.
Here’s what I mean:
•Saving Social Security may have required compromise in 1983, but that is no longer true. Back in 1983, Social Security was facing an immediate financial shortfall in which it would be unable to pay full benefits in a matter of months. Democrats had no choice but to deal with the problem right away, so the impetus to compromise was much greater. In fact, the cuts and revenue increases implemented then—including a delayed COLA, retirement age increase, and taxation of benefits—are responsible for Social Security’s current surplus of $2.6 trillion.
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