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Home Publications Blogs Beat the Press NPR Joins Drive to Cut Social Security

NPR Joins Drive to Cut Social Security

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Tuesday, 15 March 2011 19:48

NPR ran a piece that largely accepted untrue or misleading Republican assertions about Social Security. The piece told readers that:

"Republicans also believe [emphasis added] the very best time to fix Social Security is now, during a time of divided government when both Democrats and Republicans can share ownership of any changes."

Actually, NPR's reporters/editors have no clue what Republicans "believe." They are just making this up. The Republicans in question (like Democrats) are politicians. They say things that advance their political agenda whether or not they actually believe them. Competent reporters know this and don't try to tell their audience that these politicians actually believe their assertions; competent reporters just report the assertions and let their audience make up their own mind as to whether the politicians believe what they are saying. 

It is also not a fact that Social Security needs to be fixed in any meaningful sense of the term. The Congressional Budget Office projects that the program can pay all benefits for the next 28 years with no changes whatsoever and can pay nearly 80 percent of projected benefits indefinitely into the future, even if nothing is ever done to change the program.

The article includes a statement from Alabama Senator Richard Shelby noting that Social Security paid out more in benefits than it took in taxes last year: "

"Social Security is now at the tipping point, the first step of a long, slow march to insolvency if we don't do something about it."

It would have been worth noting that this actually was part of the design of the program. The reason that payroll taxes were raised to a point where they exceeded benefits was to cover the cost of the baby boomers' retirement, which meant that there would be points like the present where benefits exceeded taxes. Otherwise, the increase in the payroll taxes in the 1980s made no sense. It would have been appropriate to point out to listeners that Mr. Shelby either does not understand the program or is deliberately trying to mislead the public.

Similarly, the segment included an assertion from Oklahoma Senator Tom Coburn that money was stolen from Social Security:

"The fact is ... $2.8 trillion was stolen from Social Security .., The money was spent. It's broke. And we're going to have to fund $2.8 trillion over the next 20 years just to make the payments that we've got. I would think most people would think we ought to fix that."

Actually, not a penny was stolen from Social Security. Social Security lent money to the federal government by buying bonds, just as individuals, private corporations and banks do all the time. When an individual or company buys a bond from the government, it doesn't matter to them at all (except as citizens) whether or how the government spends the money. The government owes the exact same money regardless.

When the government pays back the bonds held by the Social Security trust fund it will effectively be replacing the bonds held by the trust fund with other bonds. The borrowing took place when the government sold bonds to the Social Security trust fund in the first place. It is not new borrowing when the government repays the bonds held by the Social Security trust fund.

Comments (14)Add Comment
Right again
written by Nancy Cadet, March 15, 2011 8:50
this NPR report was awful, fact-free and conveyed GOP propaganda uncritically. We wouldn't hear such a lazy, biased piece on BBC. It's lucky that NPR listeners often get a one hour BBC broadcast every day. That way, they get a sense of what real, responsible journalism is like.NPR is just getting worse, as they face defunding from their key information sources, GOP liars.
USA is Like Iraq - The Ones Who Broke It - Own It
written by izzatzo, March 15, 2011 9:47
"Republicans also believe [emphasis added] the very best time to fix Social Security is now, during a time of divided government when both Democrats and Republicans can share ownership of any changes."


Uh huh. Like Republicans 'believe' the very best time to shut down massive subsidies to nuclear power plants is now in light of the Japan disaster when both Republicans and Democrats can 'share ownership' of the change.

The best time to slam the middle class up against the wall and shake down what money's left from the last three years of plunder and blunder is now, while the Great Austerity Lie still has momentum, because after it fails the political backlash is going to make the current protests look like a goddamn panty waist tea party.

They broke it then, they're breaking it now and they own all of it without 'sharing' a goddamn bit of the carnage with anyone else.
What if
written by Randy, March 15, 2011 10:03
What if we demand that any new revenue from reforming Social Security would NOT be loaned to the Treasury and would instead be prohibited from being loaned to the Federal Government other than through the secondary markets using marketable securities, a special account would be held for SSA at the Federal Reserve.

I would be that much of the talk of reforming Social Security would go silent because the funds could not be used to address the current deficit.
It is stories like this
written by McMike, March 15, 2011 11:29
that make it very difficult for me to give a hoot if public broadcasting gets the axe.
...
written by einniv, March 15, 2011 11:50
If social security held marketable securities would that really protect it? I don't know the answer to this but wouldn't it still be possible to target the program? Presumably the serial numbers of the bonds held by the trust fund would be recorded somewhere. Couldn't Congress still single out just those particular bonds and default on them? Sure, it would have a larger panic inducing potential but is it technically possible? Does anyone know the answer?
Ira Glass challenged On The Media to evaluate NPR slant...
written by SLittlehale, March 16, 2011 12:10
... I recommended that OTM take a look at NPR/Welna's SS coverage, and interview Dean.
Defund NPR
written by NewsFromAnnArbor, March 16, 2011 1:34
De-fund Now-Pandering-Right radio!
Yes, everyone in the media is now spreading misinformation about Social Security
written by ratinoalrevolution, March 16, 2011 6:32
See my recent blog post on the subject here:

http://www.rationalrevolution.net/blog/index.blog?entry_id=2133122

The fact is that Social Security never had added one dime to the deficit and it never will, it is in fact forbidden by law from ever running a deficit.

The Republicans (and some Democrats) are trying o default on the debt held by the Trust Fund (which don't forget was established by Alan Greenspan and Ronald Reagan).
...
written by liberal, March 16, 2011 6:53
Randy wrote,
What if we demand that any new revenue from reforming Social Security would NOT be loaned to the Treasury...


That's not the problem. The problem is that people who pay into SS don't have a so-called "property interest" in the bonds held by SS. That's the reason that the government can renege on the implicit promise in the SS trust fund (via legislative action) but not on bonds held by private parties. Only way to legally renege on the latter is by inflation.
...
written by skeptonomist, March 16, 2011 8:33
"When the government pays back the bonds held by the Social Security trust fund it will effectively be replacing the bonds held by the trust fund with other bonds."

There is no reason that at least some of the debt can't be retired with money from income and other taxes. In fact, this is the crux of the matter; the main reason that SS is under attack is probably that high-income people want to keep their income-tax rates low. It is not likely that these people, or most politicians, are really concerned about the level of the debt, since it has been increasing since 1981.
When do change Social Security?
written by Tony, March 16, 2011 8:41
Some say we should adjust social security now, where the change would be very small, while others say we should wait until the surplus runs out, and then make a bigger adjustment. I wonder which is closer to the truth.
...
written by Grich, March 16, 2011 4:24
Mister Shelby shows his lack of knowledge every time he comments on an issue. He doesn't understand economics nor does he care to. He just repeats the talking points of his "masters". Social Security could be fixed very simply by raising the cut off point or raising taxes by a minuscule amount. But heaven forbid a politician even mentioning the T word. Someone needs to lead on this issue.
...
written by urban legend, March 16, 2011 4:47
We should wait until we have a better idea whether and when the trust fund will be depleted and continuing revenues will be inadequate to fund fully projected benefits. These are projections that, in fact, have bounced all over the place ever since the "Baby Boom Trust Fund" was established. They are the SSA's best guess, which is what long-term economic projections necessarily must be. In 1997, the projected exhaustion date was 2029 -- 32 years in the future. In 2003, only six years later thanks to a strong economy and high employment, that projected Doomsday date had not dropped to 26 years as it should have if SSA could still say 2029 was the right date, had been pushed 13 years farther into the future(2042), or 39 years into the future.

Not such a ringing slogan: "Help the sky is falling although admittedly, it should fall later than we told you a few years ago." Of course, with the weak economy, which SSA believes is the reason for new payroll tax revenues not matching benefits this year -- and not that we have actually reached the so-called tipping point when we will permanently have to move to using the interest accumulated in the Trust Fund -- it has moved back closer again, but only to 2037. With such uncertainty, it would be completely irresponsible to ask anyone to pay more in or to accept lower benefits now. We need to keep watching, but it is too early to take the kind of steps, even raising the ceiling, that are being bandied about.

In 1983, when the structure was revised by Greenspan and Reagan, Social Security was going to be unable to fund benefits fully that very same year. We can wait awhile to get a better lay of the land when we are unlikely to face a problem for almost another 30 years.
...
written by urban legend, March 16, 2011 4:50
I should have said "lower future benefits." Such preemptive cuts (for the same level of taxes) simply cannot be justified as a matter of reasonable public policy.

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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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