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Home Publications Blogs Beat the Press If Senator Simpson Started Muttering Incoherently, Would the Media Sill Cover Up for Him?

If Senator Simpson Started Muttering Incoherently, Would the Media Sill Cover Up for Him?

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Wednesday, 25 May 2011 20:44

At Peter Peterson's daylong conference on the deficit, former Senator Alan Simpson, who was also the co-chair of President Obama's deficit commission, once again insisted that Social Security was not intended as a retirement program. He also insisted that the arithmetic for the program doesn't add up and that therefore there have to be major cuts.

Of course everyone involved with the establishment of Social Security understood it to be a retirement program. It's not clear what Senator Simpson has been reading that led him to think otherwise.

In terms of the arithmetic underlying the program's finances, this is performed regularly by the actuaries at Social Security. With the trustees current assumptions, the program can pay all benefits through the year 2036 and almost 80 percent of scheduled benefits for the rest of Social Security's 75-year planning period. The projected shortfall could be almost completely eliminated with the cap on the payroll tax was removed.

Put another way, if there had not been a massive upward redistribution of wage income over the last three decades, most of the current projected shortfall would not be there. This is the simple arithmetic that apparently Senator Simpson does not understand.

It is incredible that no media outlet other than Huffington Post thinks it is newsworthy that the co-chair of President Obama's deficit commission is completely uninformed about the country's most important social program. While these news outlets have been anxious to tout comments by minor administration officials that had little to with their jobs (e.g. Van Jones' pejorative reference to Republicans), they have consistently covered up Mr. Simpson's repeated demonstrations of ignorance on the finances of Social Security.

Comments (5)Add Comment
Rapture Journalism
written by Union Member, May 25, 2011 9:47

Stories about people who give away everything in anticipation of the end of the world are more distracting...I mean important.

And compared to the Rev. Herald the 2nd Commings, Allen Simpson seems more real...I mean sane...I mean serious! That's it. Former Sen. Simpson is serious.


Removing SS cap
written by Bill Turner, May 26, 2011 7:36
I feel the cap should be removed, as Dean suggests in this article. However, I have never seen anything that tells me what I want to know. Will that alone be enough to solve the long term budget problem? If so, is it excessive, for, if so, can the overall rate be reduced? I have the same questions for Medicare. If expanded and reduced, certainly the extra income in the average tax payers' hands would be a stimulus to the economy.

I, by the way, feel the taxes, both SS and medicare, should be widened to cover investment income. It doesn't make sense that this is ONLY a tax on labor, and a very regressive tax at that!
...
written by fuyura, May 26, 2011 7:47
What do you mean "if"?
Alan Simpson on the deficit commission
written by dopp, May 26, 2011 4:56
is one of several things for which I cannot forgive Obama. In fact, the Deficit Commission itself is something for which I cannot forgive Mark Warner or Obama. The problem, of course, is that both are still much better than any likely competitors.
...
written by AndrewDover, May 26, 2011 6:50
@Bill Turner

http://www.ssa.gov/OACT/solven...un207.html shows the estimates for removing the payroll cap based upon the 2010 numbers.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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