Megnut

Saving the already-saved Social Security system

I received some feedback via email regarding my post, No smoking gun in Iraq from January 13th. One reader wrote:

Gee, I remember back in 1998 the Clintons and just about every Democrat in Congress were screaming that the budget "surplus" should only be used to "save Social Security." If you believe Social Security needed saving back then and doesn’t now then you must believe it has already been saved. Well, who saved it? Clinton didn’t do anything, so the only answer can be George W. Bush. So following the logic of the Democratic talking points that Social Security is not in crisis (which you have clearing bought into for whatever reason) to be consistent historically you must be willing to admit that someone saved Social Security already and you should be able to tell us who that was. Further you must be able to tell us what transpired in the last six years in the Social Security budget to take it from needing to be "saved" to no longer being in crisis. Are you willing to blog on that a bit?

I could blog on that for a bit (and address the issue of conflating talk of long-term Social Security reform with "crisis" and an immediate push towards privatization), but it's a lot easier to point everyone to someone who can do a much better job of it than I: Hendrik Hertzberg at The New Yorker. In this week's Talk of The Town, Unsocial Insecurity Mr. Hertzberg writes:

"This is one of my charges, is to explain to Congress as clearly as I can: the crisis is now," Bush proclaimed at an "economic summit" a month ago. He does indeed have some 'splaining to do. This year, the Social Security system--the payroll tax, which brings money in, and the pension program, which sends money out--will bring in about $180 billion more than it sends out. It will go on bringing in more than it sends out until 2028, at which point it will begin to draw on the $3.5 trillion surplus it will by then have accumulated. The surplus runs out in 2042, right around the time George W. Bush turns ninety-six. After that, even if nothing has changed, the system's income will continue to cover seventy-three per cent of its outgo.

That's using the Social Security Administration's economic and demographic assumptions, which are habitually pessimistic. Using the assumptions of the nonpartisan Congressional Budget Office, the surplus runs out in 2052. And if one uses the economic growth assumptions that Bush's own budget office uses when it calculates the effects of his own tax cuts, the surplus runs out in--er, maybe never.

I do support some kind of Social Security reform, if only to ensure that the surplus never runs out. But I question the language of "crisis" and the rush to privatization -- a solution that Hertzberg points out that even White House officials and The Comptroller General of the United States, David M. Walker, say does nothing to eliminate the long-term gap and maintain the solvency of the fund.

Previous: Next: