Social Security Monitor reports on misleading statements and lies about Social Security in the media and by politicians and officials.


The following is a letter that was sent to Rep. Susan Brooks' office and newspapers in her home state of Indiana.

To the Editor,

In a recent talk to Tipton, IN, residents about “entitlement” reform, Rep. Susan Brooks suggested “needs-testing” Medicare to ensure that the wealthy are not receiving benefits. She went on to say “When it was created, they didn’t expect people to depend on the program for their medical care… There are not enough young people paying into the program.”

Assuming that Rep. Brooks meant means-testing instead of “needs-testing,” she might want to clarify whom she means by the wealthy. Fewer than 6 percent of seniors have over $60,000 in non-Social Security income. Removing them from the pool of Medicare beneficiaries would have little effect on the program’s long-term cost projections. To significantly curb expenses under needs-testing, benefits would have to be cut for people who have much less income – in fact, as little as $40,000 per year.  

As it stands, the cost controls put into place by the Affordable Care Act allow the Medicare trust funds to pay full benefits through 2024 and close to full benefits from then on. As well, the latest data from the non-partisan Congressional Budget Office show that the rate of Medicare cost growth has slowed sharply in recent years. If the cost growth continues at the current rate, most of the projected long-term budget deficits disappear. In other words, there is little point in cutting the much-needed benefits of those making less than $60,000 in the name of deficit reduction that is already happening.

Also, when Medicare was created by Congress in 1965, they knew the baby boomers would eventually retire and depend upon these programs. As President Johnson stated, “And through this new law… every citizen will be able, in his productive years when he is earning, to insure himself against the ravages of illness in his old age.”  They also anticipated the increase in life expectancy we have seen since then. Neither of these factors has impacted the program in ways that were not planned for. 

I encourage Rep. Brooks to accurately describe the nature of the benefit cuts she is proposing and the people who will be affected. Simply offering unspecified cuts in the name of deficit reduction does a disservice to her constituents, many of whom depend on these vital social insurance programs in their retirement.


Dean Baker
Center for Economic and Policy Research

The Very Serious People in Washington have been running around arguing that the country should be very worried about the aging of the population. The story is that we face an enormous crisis because the ratio of workers to retirees is projected to fall from 2.8 to 1 in 2013 to just 2.0 to 1 over the next two decades. This declining ratio is supposed to mean that our children will face an enormous burden in supporting a rapidly growing population of retirees.

While this projection produces much hand wringing and head nodding among the Very Serious People (VSP), fans of arithmetic know that it provides little basis for concern. The reason for the lack of concern is often given by the VSPs themselves. When pushing the scare story they often throw in the tidbit that the ratio of workers to retirees used to be 5 to 1 back in the 1960s.

Of course the country is far richer on average today than it was in the 1960s even though we have much lower ratio of workers to retirees. The secret is productivity growth. Output per worker hour is more than twice as much in 2013 as it was in the 1960s. As a result, we can both have a larger share of output diverted to supporting retirees and have higher living standards for both workers and retirees.

The same story holds going forward. In 20 years average output per worker is conservatively estimated to be more than 40 percent higher than it is today. This means that even if workers were to see an increase in their payroll tax of 2 or 3 percentage points (almost certainly more than would actually be the case – we can also raise the cap on taxable wages) they would still have much higher after-tax wages in 2033 than they do today.

The following is a letter that was sent to newspapers in Sen. Orrin Hatch's home state of Utah.

To the Editor,

Earlier this week, Sen. Orrin Hatch (R-Utah) addressed the Senate on its latest budget proposal. On the topic of social insurance programs, Sen. Hatch said:

Put simply, this budget ignores our unsustainable entitlement spending and allows it to continue on a path that will bankrupt these programs.”

Sen. Hatch went on to say:

This isn't new information. It isn't privileged or classified. Anyone paying attention to our nation's fiscal situation is aware that these challenges exist.”

It is true that information on the finances of these problems is freely available. And the Senator’s constituents might like to know that by all indications, these programs are actually not on a path to bankruptcy. The projections of both the Social Security Trustees and the nonpartisan Congressional Budget Office show that Social Security will continue to be able to pay full benefits for the next 20 years and more than 75 percent of benefits from then on.

In terms of Medicare, projections show that the Affordable Care Act put into place cost controls that allow the program to pay full benefits through the year 2024 and the vast majority of benefits for the foreseeable future. And if Medicare cost growth continues at the same rate as we've seen over the past five years, Medicare will essentially flatline as a portion of our budget, and most of the projected long-term budget deficits will fall away.

In other words, even if Congress does nothing at all right now, these programs will continue to exist for future generations. The remaining shortfall in the Medicare programs relative to the size of the economy is roughly one-third the size of the increase in defense spending associated with the wars In Iraq and Afghanistan.

As a member of the Senate Finance Committee and the Subcommittee on Social Security, Pensions and Family Policy, it is crucial that Senator Hatch accurately describes the finances of these programs. Anything less endangers and weakens programs that are vital to the retirement security of retirees around the nation.

Dean Baker,
Co-Director, Center for Economic and Policy Research

The Honorable Robert Portman
338 Russell Senate Office Building
Washington DC, 20510-3506

Dear Senator Portman and Staff:

In an interview about President Obama's State of the Union address, you stated, "I was most encouraged about what he said about entitlement reform and tax reform... [because e]ntitlement programs, as important as they are, are not sustainable in their current form."

With all due respect, the non-partisan Congressional Budget Office projects that even if Congress makes no changes to the program at all, Social Security can pay full scheduled benefits through the year 2034 and over three-quarters of scheduled benefits for the rest of the century. The shortfall that remains is equivalent to only about 0.6 percent of our GDP, which could be easily made up with common-sense solutions, such as applying the Social Security payroll tax to income above $113,700.

Medicare is projected to be able to pay full benefits through the year 2024 and the long-term projected shortfall has decreased by more than two-thirds, due to cost controls put in place by the Affordable Care Act. In addition, the latest projections of Medicare spending from 2011 to 2020 have dropped by $500 billion. The main reason for Medicare's long-term deficits is that we pay twice as much per person for health care as in other developed nations, without better health outcomes to show for it. In fact, if we could get our health care costs down to their levels, for example by allowing the government to negotiate Medicare prescription drug prices, then we'd be looking at budget surpluses, not deficits, in the future.

In contrast, "entitlement reform" plans would cut Social Security and Medicare benefits by large amounts, undermining the security of American retirees. For example, the "chained CPI" that has been proposed for Social Security and other inflation-adjusted programs, including federal income tax brackets, would effectively be a painful benefit cut as well as a tax increase for most Americans.

As you continue to deliberate over Social Security and Medicare, I hope you and your staff will have the opportunity to further review the design and finances of the programs. If you would like any additional background, I would be happy to assist you.

Dean Baker
Co-Director, Center for Economic and Policy Research

The Honorable Kristi Noem
1323 Longworth House Office Building
Washington DC, 20515

Dear Rep. Noem,

In answer to a recent question on Social Security and the national debt, you stated:

“Social Security is running at a deficit today…We’re having to make up that deficit out of the national treasury. That’s why we have to shore it up.”

By law, however, Social Security can only spend money from its designated payroll tax or interest on the bonds in its trust fund. Therefore, it cannot contribute to budget deficits or the national debt. Currently it is spending interest from the government bonds it owns, in addition to its designated payroll tax receipts. It makes no more sense to say that this spending from interest contributes to the deficit than if you or I were to spend interest on government bonds that we owned. 

Since by law, Social Security is financed by its own revenue stream, it seems peculiar that you would bring it up in the context of the national debt and deficits. Your constituents might be interested in knowing why you discuss Social Security in this fashion.

While Social Security is projected to face longer term-shortfalls, I assume you are aware that both the non-partisan Congressional Budget Office (CBO) and the Social Security Trustees Report show that Social Security will be able to pay full benefits into the 2030s and over 75 percent of benefits thereafter if no changes at all are made to the program.

If you are interested in ways to tackle the long-term solvency of Social Security I would be happy to discuss this with you. I hope you are more careful in the future when discussing Social Security, deficits and the national debt.

Dean Baker, Co-Director, Center for Economic and Policy Research

The Honorable Robert Corker
185 Dirksen Senate Office Building
Washington DC, 20515

Dear Senator Corker,

You recently introduced a new bill aimed at deficit reduction, in part taking aim at ‘entitlement reform’. On the subject of Medicare, you stated:

“Medicare means-testing would allow Medicare payments to be reduced for people who can afford to pay for their own healthcare.”

I’m curious as to the income levels where you would consider people to be so wealthy that they do not need Medicare or at least should receive less assistance from the government in paying for it? As you know, Congress just had a serious debate on this issue with President Obama on taxes and decided that $400,000 was the appropriate cutoff for who is considered wealthy. If Congress were to set a comparable income level as a cutoff for Medicare, the savings will be too small to even be noticed in budget projections. Even if the cutoff for a means test was set at half this level, or $200,000, it would only affect 1 percent of beneficiaries, and therefore could at least lead to a reduction of Medicare costs of 1 percent in the extreme case that people at this income level were thrown off Medicare completely. In order to raise any substantial amount of money through a means test of Medicare you would have to set the cutoff for some reduction in benefits in the $50,000-$60,000 income range.  

I would be happy to work through calculations of potential savings from means-testing with you if that would be helpful. In any case, I hope that you clarify your plans for means-testing Medicare. I suspect that people in Tennessee and around the country would be very interested.

Dean Baker, Co-Director, Center for Economic and Policy Research

The Honorable Pat Toomey
502 Hart Senate Office Building
Washington DC, 20510

Dear Senator Toomey,

In a recent interview on MSNBC, you said

“We Republicans need to be willing to tolerate a temporary, partial government shutdown which is what that could mean. And we have to get off the road to Greece, because that is a road that we’re on right now. We can only solve this problem by getting spending under control and restructuring the entitlement programs. This president doesn’t want to go there. We have to force it, and we’re going to have to force it over the debt ceiling.”

This appears to be a rather strong statement, which I would like to make sure that I am not misunderstanding. Are you saying that it is the intent of you and your fellow Republicans to force the government to default on its debt unless the president agrees to cut Social Security and Medicare, which together account for the vast majority of entitlements?

My guess is that threatening default of the debt as a way to force cuts to Social Security and Medicare is not popular with the country as a whole or your constituents in Pennsylvania, but of course that is your prerogative as an elected official. It would be helpful to everyone if you could clarify your position on this issue.

Dean Baker, Co-Director, Center for Economic and Policy Research

The Honorable Thomas J. Rooney
1529 Longworth House Office Building
Washington, D.C. 20515

Dear Representative Rooney:

Last week, the Washington Post reported that you stated, “If there are truly real entitlement reforms that are going to preserve Social Security and Medicare for generations to come, it’s going to be very difficult for me to oppose” higher tax rates for the rich.

With all due respect, the Congressional Budget Office projects that even if Congress makes no changes to the program at all, Social Security can pay full scheduled benefits through the year 2034 and close to 80 percent of scheduled benefits for the rest of the century. 

In the case of Medicare, the program is projected to be able to pay full benefits through the year 2024. The cost controls put in place by the Affordable Care Act pushed this date eight years further into the future, from 2016, and reduced the long-term projected shortfall by more than two-thirds. 

In contrast, most recently proposed "entitlement reform" plans would cut Social Security and Medicare benefits by comparable, or even larger, amounts.  Considering these facts, I find it difficult to ascertain what the word "preserve" means in this context. 

As you continue to deliberate over Social Security and Medicare, I hope you and your staff will have the opportunity to further review the design and finances of the programs. If you would like any additional background, I would be happy to assist you.


Dean Baker
Co-Director, Center for Economic and Policy Research

The Honorable Pat Toomey
502 Hart Senate Office Building
Washington, D.C. 20510

Dear Senator Toomey:

I read through the talk on the budget that you gave at the Brookings Institution this week. The talk included several comments on Social Security that were at least misleading, if not actually wrong.

First, on page five of the transcript you lumped Social Security in with Medicare and other health care programs and said that collectively they are unsustainable. This is misleading for several reasons.

Most importantly, the cost of Social Security is projected to rise much less rapidly than the costs of health care programs. And, after the mid-2030s, Social Security’s costs are projected to remain virtually constant as a share of GDP through the rest of the century. There is nothing about these projections that imply this will be an unsustainable burden.

Furthermore, because of the way in which Social Security is financed, under the law it cannot contribute to the deficit. The Congressional Budget Office’s (CBO) most recent projections show that the program will be fully funded from its dedicated stream of tax revenues through 2038, with no changes whatsoever. (The Social Security Trustees project 2033 as the date of trust fund exhaustion.)

This means that for the next quarter-century, CBO projects that Social Security will be fully funded from its designated tax and the interest and principal from the bonds bought with surplus revenue from this tax. If we reach 2038 and the fund is depleted as projected, then under the law Social Security would not be able to pay full benefits. (The payable benefit would be about 80 percent of the scheduled benefit, which would still be considerably higher than what current retirees receive.) Social Security would not be able to make payments in excess of the money coming into the system, and thereby add to the deficit, unless Congress were to vote to change the law and allow Social Security to spend from general revenue.

A new revised edition of "The Young Person's Guide to Social Security" by the Economic Policy Institute and National Academy of Social Insurance includes the latest official estimates in the 2012 Social Security Trustees’ report to give young adults the information needed to participate in debates about the program's future.

“Social Security is the best deal most young people don’t even know they have,” said Kathryn Anne Edwards, one of the paper's authors. "It is insurance that is not only effective and important, but irreplaceable. Young people need to get the message that it’s not somebody else’s security, it’s your security. It’s not your grandparents’ program, or your parents’ program, it’s your program. And it’s yours to lose.”

The printed edition is free and available through NASI.  The publication is also available online in a downloadable format and available through EPI or NASI. For even more on Social Security, visit our Social Security and Retirement page.

Former White House adviser Ezekiel Emanuel offered in a recent New York Times column his bipartisan solution to Medicare, Medicaid and Social Security reform: Graduated eligibility for Social Security and Medicare, or linking "the age of eligibility to lifetime wealth." The idea, according to Emmanuel, is that "[t]he richer you are, the older you would have to be to be eligible for Social Security and Medicare."

As Dean Baker notes over at Beat the Press, there are two problems with this approach. First, the budget deficit is a health care problem, not a Social Security problem. Lumping Social Security in with Medicare and Medicaid certainly makes it look like a problem, but if you replace "Social Security" with "muffins," suddenly we are experiencing explosive growth with muffin costs.

Second, Emanuel's proposal states:

People in the bottom half of the lifetime earnings distribution would become eligible for normal retirement benefits at age 65 for Medicare and 66 for Social Security, just as they are today. But people in the next quarter of the lifetime earnings distribution would become eligible for the respective programs at 67 and 68, and those in the top quarter would become eligible at 70 and 71. All eligibility ages would increase over time, as they are scheduled to now.

Dean points out that "Emanuel's proposed cuts in these programs would hit people with average lifetime earnings of $40,000 and above."* Dean and Hye Jin Rho wrote a paper about means testing last year, which you can find here.

* See Social Security data on Average and Median Amounts of Net Compensation.

Matt Miller, in a recent Washington Post column, talks about the need for a third party to change the boundaries of debate in politics. OK, but let's read a little more. One of his reasons includes "reallocating public resources from outsized projected spending on programs serving seniors to big investments in the future." Miller writes:

If you think we should not guarantee the next generation of retirees a 30 percent real increase in initial Social Security benefits (as we do today) before we’ve first guaranteed that every child in America has access to high-quality pre-schools and great teachers (in part by recruiting top college students to careers in the classroom and paying them up to $150,000 a year), which party represents your voice?

But why is it one or the other? As Dean Baker writes on Beat the Press, "Since workers pay for their Social Security benefits with a designated tax, his sentence makes no more sense than saying we should not pay interest on the government bonds held by wealthy people like Peter Peterson before guaranteeing decent eduction for our kids. Those of us familiar with the projections know that there is no reason that we cannot do both."

The Honorable Johnny Isakson
131 Russell Senate Office Building
United States House of Representatives
Washington, DC 20515

Dear Senator Isakson:

In a recent appearance before the Fayette County, GA Chamber of Commerce, you said “…Social Security and Medicare are contracts with our government. They are contracts, not gifts. They should not be invalidated but they must be reformed. Social Security is going broke in 2034 and we have to fix it.”

While the program does face a shortfall in the 2030s, the reality is that Social Security benefit payments will not ‘go broke’ in 2034. While the Social Security trustees report shows that the program only be able to pay full scheduled benefits through the year 2033, at which point the trust fund would be depleted, there will still be an enormous amount of revenue coming into the system each year. (The projections of the Congressional Budget Office are more optimistic and show that Social Security will pay full benefits through 2038.) After that, even if Congress makes no changes to the program whatsoever, Social Security will still be able to pay over 75 percent of the full benefit. The payable benefit after the projected date of trust fund depletion will still be higher than the benefit received by retirees today, so the system would be far from broke. 

As you continue to discuss Social Security, I hope you and your staff will have the opportunity to further review the design and finances of the program. If you would like any additional background on this, I would be happy to assist you.

Now that the latest Social Security Trustees Report is out, it's time to dig through the misinformation that passes as reporting. Thankfully Dean Baker already does this for us over at Beat the Press. Here are some highlights:

  • A Washington Post article on the report attributed Social Security's "bleak outlook" to "the ever-larger numbers of people in the baby boom generation entering retirement."  As Dean notes, this isn't a new development. The Greenspan Commission in 1983 knew they would be retiring, too. Has the Post already forgotten about our high unemployment rate, which has resulted in fewer contributions to the program?

  • CNN had a rather amusing article about the "burgeoning" costs of Medicare and Social Security, but right below the headline they posted a graph showing Social Security costs, measured as a share of GDP, as basically flat. Medicare spending, on the other hand, climbs well above Social Security. This is what Dean has been saying all along: The problem is our health care system.

  • In an interview on American Public Media's Marketplace, Olivia Mitchell, executive director of the Pension Research Council at the Wharton School, trotted out the old line about how the trust fund "has been spent." Dean explains why that's simply false.

The Social Security Trustees' report released today finds the projected shortfall in the financing of Social Security over the 75-year planning period is 2.67 percent of taxable earnings, compared with 2.22 percent in last year's report. By far the largest factor in this change is the Trustees' assumptions regarding the current and future economy, which accounted for nearly half of the total change. In particular, the Trustees revised down their projections of average hours worked. Last year, the intermediate assumption was that average hours would not change over time, while this year they are assumed to fall 0.05 percent per year. Over the 75-year planning period, this implies an eventual fall in hours by about 4 percent. As a result, growth in average annual earnings was similarly revised downward.

For a more in-depth analysis, read our Social Security Byte.

Seriously. Robert Samuelson really hates Social Security. Dean Baker already covered this on Beat the Press, but the amount of dishonesty in Samuelson's piece is mind-boggling. Paul Krugman and Jared Bernstein also picked up on it here and here. Samuelson pulls out every trick in the book to make Social Security look terrible, even the old "What would FDR think?" fallacy. Perhaps we should all send The Washington Post's Fact Checker, Glenn Kessler, links to Samuelson's column and the Beat the Press response with the note "Please read."

We don't make this stuff up. Esquire's recent article on "The War Against Youth" is shocking, but not for the reason you'd expect after reading that headline. It starts out with this statement: "The year Obama took office, older Americans made almost forty-seven times as much as the younger generation." As Dean Baker notes on Beat the Press, that would be wealth, not income. Wealth = total assets - liabilities. Or as Dean says:

This means that if we add up the home equity of the typical household over age 65, their 401(k) and all other savings, the value of their car and any other possessions they might have, it comes to just over $170,000. This is a bit more than the price of the median home.

If you used that wealth to pay off your mortgage, you would end up with very little leftover and dependent on Social Security benefits, which average a bit more than $1,200 a month. But Esquire has problems with that, too. According to the article, Social Security is a "boondoggle" that is "weighted heavily in favor of the older population." Esquire would also like us to think that Social Security benefits are going to "run out in 2036." Why? Maybe you remember the Esquire Commission to Balance the Federal Budget. Backed by the Committee for a Responsible Federal Budget, which includes Erskine Bowles and Pete Peterson on its board, it included recommendations like raising the retirement age to 70 and using the Chained Consumer Price Index for All Urban Consumers (CPI-U) to calculate cost-of-living adjustments. Dean Baker and David Rosnick have written about those very proposals here (and for more, check out our Social Security issues page). Spoiler alert: They're going to hurt people more than help.

Dean sums up the article pretty well:

"[It] is a shameful effort to transform the realities of class war, where the wealthy have been rigging the rules to secure themselves most of the gains from economic growth, into a generational issue. The combination of ignorance and dishonesty in this piece is truly extraordinary.


The Honorable Paul Ryan
1233 Longworth House Office Building
Washington DC, 20515-4901

Dear Representative Ryan:

Your new budget plan repeatedly refers to the recommendations of the President’s Fiscal Commission, also known as the Bowles- Simpson Commission and officially as the National Commission on Fiscal Responsibility and Reform. This is surprising considering that as a member of the commission, you should be aware of the fact that there were no official recommendations from the commission.

As established by President Obama, the commission was created in February if 2010 under co-chairs Erskine Bowles and Alan Simpson and 16 other members. As you may recall, the commission was to issue a report on December 1, 2010. For this report to be adopted, 14 of the 18 members had to vote to approve it. The commission failed to produce a report that had the support of the necessary 14 members by its deadline. On December 3rd, it did take an informal poll of the 18 members on the report of the co-chairs, which received the support of 11 members (not including you). This meant that there was no official document agreed upon and adopted by the commission.

Just as a bill in the Senate needs at least 60 votes to get through a filibuster and most juries must reach unanimity to render a verdict, the rules establishing the National Commission on Fiscal Responsibility and Reform clearly specified that a commission report must get the support of 14 of the 18 commission members. The report of the co-chairs did not reach this target; therefore it is simply the report of the co-chairs, not the commission. I hope that you will clarify this point when discussing the report in the future and correct the wording in the on-line version of your budget plan.

Bloomberg columnist Clive Crook wrote last week about the problem of retirees not having enough money to have a decent standard of living. But as Dean Baker noted over at Beat the Press, Crook's plan for Social Security going forward isn't exactly clear. Along with proposals for raising the retirement age and means-testing, he advocates a new, separate system of partial privatization. Even if it's not clear whether Crook wants to expand or privatize Social Security, at least he's talking about the issue of retirement income.
Fortune's Allan Sloan wrote in a recent column about Social Security's projected $300 billion shortfall and the need for reform. But as Dean Baker wrote on Beat the Press yesterday, there are technical issues with Sloan's analysis as well as one substantive issue: "[T]he first, second, and third priority of policymakers should be job creation." As we've said time and time again here at CEPR, the latest projections from the Congressional Budget Office (CBO) show that Social Security will be able to pay full benefits through the year 2038 and will be able to pay almost 80 percent of full benefits for decades afterwards. To quote Dean: "Relax."
Fred Hiatt, editorial page editor at the Washington Post, told readers on Sunday that there's a conflict growing between "accountability liberals" and "nostalgia liberals" over Social Security. According to Hiatt, "accountability liberals" believe Social Security reform — in the form of scaling back benefits to the wealthy, or means testing — is necessary to save the program. "Nostalgia liberals," on the other hand, believe this type of reform could cause the program to lose support and funding. Even if you choose to accept Hiatt's ridiculous either-or fallacy, as Dean Baker points out over at Beat the Press the only way to save a substantial amount through means testing would be to extend it to people earning $30,000 a year. That's not exactly "wealthy."

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