Yesterday, I posted a link to a sober analysis about the potential of various Social Security reforms. Today, I’m linking to an article that is the exact opposite of sober analysis. It’s misleading, demagoguery that frankly should be embarrassing to the author-a United States Senator. In Politico, Vermont’s Bernie Sanders writes:
The White House deficit commission is reportedly considering deep benefit cuts for Social Security, including a steep rise in the retirement age. We cannot let that happen.
First, let’s be clear: Despite all the right-wing rhetoric, Social Security is not going bankrupt. That’s a lie!
The truth is that the Social Security Trust Fund has run surpluses for the last quarter century. Today’s $2.5 trillion cushion is projected to grow to $4 trillion in 2023. The nonpartisan Congressional Budget Office, experts in this area, say Social Security will be able to pay every nickel owed to every eligible beneficiary until 2039.
Got that? In case you don’t, let me repeat it. The people who have studied this issue most thoroughly and have no political bias report that Social Security will be able to pay out all benefits to every eligible beneficiary for the next 29 years.
Yes, Mr. Sanders, it is true that there is something called a Social Security Trust Fund that will technically allow Social Security to continue paying all promised benefits for decades, but the Trust Fund does nothing-absolutely nothing-to change the pressure Social Security will place on the budget and ultimately on taxpayers. I wrote an op-ed explaining the uselessness of the trust fund:
For decades, Social Security payroll tax revenues exceeded required benefit payments. The Social Security Administration (SSA) took this extra revenue and loaned it back to the general treasury, receiving in return government bonds that accrued interest. ….
The real limitations of the Trust Fund became clear this year when Social Security’s balance sheet turned negative. Instead of running a surplus, Social Security actuaries predict that payroll tax revenue won’t be enough to cover benefits in 2010. Social Security will have to use its famed Trust Fund assets to cover the shortfall. Taxpayers are now learning once and for all that those assets are of no comfort: Congress will have a new line item in its budget, and will have to either issue new debt, raise taxes, or cut other spending to pay SSA back. That’s exactly what would have happened absent the Trust Fund, unless politicians wanted to do the unthinkable and cut current Social Security benefits.
It’s completely misleading to suggest to taxpayers that they don’t need to worry about Social Security’s finances because the Trust Fund exists. Real choices are going to have to be made: either taxpayers are going to have to cough up a lot more to prop up the current system, the government is going to have to issue trillions in additional debt, or Social Security will have to be changed to reduce the cost of future benefits. It shouldn’t be unthinkable to consider changing the growth of future benefits so that someone like me-in their mid-thirties with plenty of time to plan for retirement-gets less than under current law. It’s pretending that real choices don’t have to be made which is the real lie.