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Letter to Senator Rubio on Social Security Comments Print
Written by Dean Baker   
Thursday, 31 March 2011 10:15

The Honorable Marco Rubio
B40a Dirksen Senate Office Building
Washington DC, 20510

Dear Senator Rubio and Staff;

In an Op-Ed in the March 30 Wall Street Journal, you wrote, “No changes should be made to Medicare and Social Security for people who are currently in the system, like my mother. But people decades away from retirement, like me, must accept that reforms are necessary if we want Social Security and Medicare to exist at all by the time we are eligible for them.”

Protecting the benefits of people currently in these programs is commendable. However, the assertion that Social Security will not “…exist at all…” by the time you are eligible for it is simply wrong.

The Social Security trustees’ projections show that the program would face a shortfall beginning in 2037. If the projections prove accurate, and Congress never makes any changes to the program, then Social Security is projected to be able to pay almost 80 percent of scheduled benefits in subsequent years. This means that you would be able to anticipate a benefit of $30,484 in 2038 and subsequent years. In other words, the projections show that you can expect to get a substantial benefit from Social Security as long as you live.

As the discussion over Social Security continues, 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.

 
It's Not Just the Editorials that Lie About Social Security Print
Written by CEPR   
Wednesday, 30 March 2011 09:30

Ezra Klein responded to criticisms over a piece he wrote on Social Security reform, saying don't be scared by misleading "editorials." As Dean wrote on Beat the Press, the problem isn't so much what's on the editorial page as what's in the rest of the news. If you need some examples, we'd be more than happy to link to some.

 
Misleading Social Security Claims: The Game Print
Written by CEPR   
Tuesday, 29 March 2011 16:15

Republican political strategist Mark McKinnon has apparently invented a new game: Every time a columnist makes up something about Social Security, he or she gets a point. Over at Beat the Press, Dean tallies McKinnon's score.

 
What Social Security Reform Means Print
Written by CEPR   
Tuesday, 29 March 2011 15:15
Which is the problem: Social Security reform or the reformers? Ezra Klein criticized Social Security supporters for holding up what could be potentially beneficial reform, but as Dean points out on Beat the Press the constant barrage of untrue or misleading claims from reporters and politicians is shaping the debate, not reason.
 
Letter to Rep. Akin on Social Security Comments Print
Written by Dean Baker   
Wednesday, 23 March 2011 15:45

The Honorable W. Todd Akin
117 Cannon Office Building
Washington, DC 20515

Dear Rep. Akin,

During a recent episode of C-SPAN’s Washington Journal, you stated that one of the reasons you do not like the Social Security program is that the government spends the money that is paid into the system and that this is wrong. However, this program is structured this way by design.

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. Currently, the bonds held by the trust fund, together with annual tax collections and interest, are projected to be sufficient to finance full benefits through the year 2037, and more than 75 percent in later years.

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. By design, the sale of government bonds is used for federal spending. These bonds are backed by the full faith and credit of the United States government and will be repaid unless Congress were to vote to default on these bonds.

In this same segment, you offer another reason that you dislike Social Security -- that if a person in their 30s or 40s had instead invested the same amount in the stock market or T-Bills, they would be a millionaire by the time they retire. It is interesting that you suggested investing in T-bills. As is the case with the bonds held by Social Security, money invested in T-bills is also used to pay for government spending.

Returns on stock market investments can be a mixed bag. A person in their late 40s who invested in the stock market in the late 90s would have seen a negative real return on investment. This is not the route to becoming a millionaire.

As the public discussion of 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 Social Security, I would be happy to assist you.

 
Reading the Post Op-Ed Page So You Don't Have To Print
Written by CEPR   
Wednesday, 23 March 2011 10:45

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?

 
WSJ Doesn't Get the Whole Budget/Bonds Thing Print
Written by CEPR   
Tuesday, 22 March 2011 10:00
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.
 
Krauthammer Still Doesn't Get It Print
Written by CEPR   
Friday, 18 March 2011 11:00
Over at Beat the Press, Dean continues to explain to Washington Post opinion writer Charles Krauthammer the concept of government bonds.
 
Letter to Senator Rand Paul on Social Security Comments Print
Written by Dean Baker   
Thursday, 17 March 2011 16:30

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.

 
And So Goes the New York Times Print
Written by CEPR   
Thursday, 17 March 2011 08:25
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.
 
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