I was about to go after Robert Samuelson’s terribly misleading attack on Social Security this AM—it has become welfare!…FDR would hate it!—when it occurred to me that this is just the type of spurious attack the drives Dean Baker nuts (Dean and Mark Weisbrot were early recognizers of the Soc Sec crisis mongering).
So, if you’re unfortunate enough to read Samuelson, here’s the antidote.
Two points I’d add. First, amplifying one of Dean’s points, be aware of the Social Security bait and switch. In order to make the finances of the guaranteed pension system sound worse than they are, Samuelson, toward the end of the piece, switches from “Social Security” to “Social Security and Medicare,” the latter of which is truly on an unsustainable path. That’s a separable issue, but it’s characteristic of the “no-more-social-insurance” crowd to jam them like this.
Second, none of us are arguing that we should ignore the actual fiscal imbalances faced by Social Security. Our point is that they are manageable with known solutions (whereas controlling costs in health care is less certain—although frankly, that too is less elusive than we generally think—every other advanced economy is doing much better than we are with some form of single payer or highly regulated delivery system and cost controls).
Here are the relevant facts about Social Security’s future (as we at CBPP see them):
–The trustees estimate that the combined Social Security trust funds will be exhausted in 2036 —a year earlier than they forecast in last year’s report.
–After 2036, Social Security could pay three-fourths of scheduled benefits using its annual tax income [Samuelson implies all benefits expire in three years!]. Those who fear that Social Security won’t be around when today’s young workers retire misunderstand the trustees’ projections.
–The program’s shortfall is relatively modest, amounting to 0.8 percent of GDP over the next 75 years (and 1.45 percent of GDP in 2085). A mix of tax increases and benefit modifications — carefully crafted to shield recipients of limited means and to give ample notice to all participants — could put the program on a sound footing indefinitely.
–The 75-year Social Security shortfall is only slightly larger than the cost, over that period, of extending the 2001 and 2003 tax cuts for the richest 2 percent of Americans (those with incomes above $250,000 a year). Members of Congress cannot simultaneously claim that the tax cuts for people at the top are affordable [or like the Ryan budget, add trillions more in tax cuts] while the Social Security shortfall constitutes a dire fiscal threat. And the shortfall is well under half the cost over 75 years of making all of the 2001 and 2003 tax cuts permanent.