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

 

Robert Pozen, a financial industry executive and proponent of Social Security privatization, wrote in the Washington Post that liberals should support cuts to Social Security because of growing wage inequality. But as Dean points out, Pozen doesn't think we should tackle the sources of wage inequality. He wants to cut benefits for the middle-class to solve the problem. Do you think the Washington Post will allow a rebuttal?

Add the Wall Street Journal to the list of media organizations that are confused over how Social Security funding works. Over at Beat the Press, Dean explains yet again how budgets and bonds work.
Over at Beat the Press, Dean continues to explain to Washington Post opinion writer Charles Krauthammer the concept of government bonds.

March 17, 2011

The Honorable Rand Paul
SRC-5 Russell Senate Office Building
Washington DC, 22204

Dear Senator Paul,

During a recent episode of NPR’s "All Things Considered" you said that "... Social Security is broken". However, this is not the case. The government bonds that comprise the Social Security trust fund allow the program to maintain full solvency through the year 2037. And even if nothing is done at that point, the program will still to be able to pay benefits of around 75 percent from then on. This information is easily accessible on the Social Security website and has been confirmed by the CBO and other organizations.

You also said that the only way we can fix Social Security and the only way it can continue is if we look at the eligibility. Insofar as you mean the shortfall projected after 2037, there are many other options, including lifting the payroll cap or scheduling modest increases in the future when funds will be needed.

As the discussion on Social Security continues, 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 the program, I would be happy to assist you.

Earlier this week NPR joined the "cut Social Security" bandwagon, now The New York Times is talking about how Congress will move to "rein in the costs of Medicare, Medicaid and Social Security." Dean has the story over at Beat the Press.

The Honorable Tom Coburn
172 Russell Senate Office Building
Washington, DC 20510

Dear Senator Coburn:

According to a clip that aired on a recent segment of NPR’s All Things Considered, you said that Social Security is broke because the federal government stole $2.8 trillion from the Social Security trust fund.

This assertion is mistaken. No money was stolen, and the law has been followed to the letter.

The recommendations of the National Commission on Social Security Reform in 1983, led to the growth of a large surplus. The surplus has always been used to buy bonds.

Just as with any funds used to purchase bonds, the money is borrowed by the government, but repaid at the end of the term of the bond. Saying the government stole from Social Security is like saying the government stole from a grandparent who bought a $100 savings bond for their newborn grand-daughter, and no one believes this to be the case. The reality is that the bonds are backed by the full faith and credit of the United States government. The bonds will be repaid.

Currently, the bonds making up the trust fund will be able to pay full benefits through the year 2037, and 75 percent thereafter. This is a far cry from broke.

As the discussion over Social Security continues to heat up in the coming weeks, I hope you and your staff will have the opportunity to further review the design and finances of Social Security. If you would like any additional background on the program, I would be happy to assist you.

The Honorable Richard Shelby
304 Russell Senate Office Building
Washington, DC 20510

Dear Senator Shelby:

During a recent episode of NPR’s "All Things Considered" you said that last year, Social Security paid out more than it received in benefits than it received in contributions. You went on to say that this is “… the first step of a long, slow march to insolvency if we don’t do something about it.”

However, this is not the case. The government bonds that comprise the Social Security trust fund allow the program to maintain full solvency through the year 2037. And even if nothing is done at that point, the program will still to be able to pay benefits of around 75 percent from then on. This was the point behind taxing workers 2 additional percentage points than was needed to pay for Social Security in 1982. If the intent was not to pay for future benefits, what other purpose would there be for the additional taxes?

In addition to representing the people of Alabama, you are also a leader in the Senate. You therefore have the responsibility to know the facts about this essential program and to present them accurately. If I can provide any additional background on this vital program, I will be happy to assist.

Over at Beat the Press, Dean comments on a recent NPR piece that overwhelmingly accepts Republican assertions about the state of Social Security.  
As Dean notes in Beat the Press, an article in The Hill describes Social Security's trust fund as "theoretical" and U.S. government bonds as "IOUs." No, it's not an opinion piece.
The Economist has posted a scary graph that lumps Social Security in with "entitlement" spending on Medicare and Medicaid and compares the costs to total government revenue. But as Dean points out at Beat the Press, strangely nobody mentions growing health care costs.

The Annenburg Public Policy School's FactCheck.org refuses to back down to its "angry readers" in response to an article it published wrongly attacking Democrats for correctly pointing out that Social Security does not contribute to the deficit. As Dean notes on Beat the Press, the "on-budget" budget numbers are available here and here. They should probably check those facts.

Over at Beat the Press, Dean challenges Charles Krauthammer's claim that the government bonds in Social Security's trust fund are "worthless."

Many people in policy debates have argued that means testing, or reducing Social Security payments to affluent beneficiaries, can be an effective way to save money for the program and to reduce the federal budget deficit. A new CEPR report examines the feasibility of several different means-testing scenarios and finds the potential savings to be rather limited.

"The majority of Social Security beneficiaries are lower- to middle- income people," said Dean Baker, an author of the paper and a co-director at CEPR. "The number of beneficiaries who are by most standards considered affluent is too small to raise a significant amount of money via means testing."

Read the full report here.

The Honorable Mark Warner
459A Russell Senate Office Building
Washington, DC 20510

Dear Senator Warner:

During an interview on NPR's Morning Edition today you stated that the retirement age for Social Security was set at 65 by President Roosevelt when the average life expectancy was 64 and that now we are living much longer. The implication of this comment was that the retirement age must be raised to better reflect life expectancy.

As can be seen from the Social Security Trustees’ Report, the normal retirement age for Social Security has already been raised to 66 and is already scheduled to rise to 67. Raising the retirement age further would amount to a cut in benefits with each successive increase in the retirement age. If the normal age of retirement is phased in to reach 70 by 2036, it would result in a 4.0 percent reduction in benefits for workers between the ages of 50-54 in 2007 and a 10 percent reduction for workers between the ages of 40-44 in 2007.

The Honorable Richard Shelby
304 Russell Senate Office Building
Washington, DC 20510

Dear Senator Shelby:

During a recent breakfast at the Institute for Education, you said that Social Security is actuarially unsound, that the next generation of workers would receive little or nothing from Social Security and that there is no proof that your sons would get much at all. This is badly mistaken. You should know, both for your own personal finances, and more importantly for your actions as Senator, that under any plausible set of circumstances you and your sons can anticipate a substantial Social Security benefit.

You reached the national retirement age for Social Security in 1999. While I don’t know your precise earnings history, your pay as a senator made you eligible for the maximum benefit if it were sustained for 35 years. The Social Security Trustees Report and likely your own personal finances show that a maximum wage earner retiring in 1999 receives an annual benefit of $21,674 in 2010 dollars.

The Honorable Michael Bennet
702 Hart Senate Office Building
Washington, DC 20510

Dear Senator Bennet:

I heard you say during your interview on National Public Radio this morning that if nothing is done, there will be no Social Security for people your age. This is badly mistaken. You should know, both for planning your own personal finances, and more importantly for your actions as Senator, that under any plausible set of circumstances you can anticipate a substantial Social Security benefit.

On the program you said that you are currently age 45. This means that if you work until the normal retirement age for your age cohort of 67, you will be retiring in 2032. While I don’t know your precise earnings history, your pay as a senator would make you eligible for the maximum benefit if it were sustained for 35 years. The Social Security Trustees Report shows that a maximum wage earner retiring in 2032 would receive an annual benefit of $40,800 in 2010 dollars. (This can be found in Table V1.F10 available here.)


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