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Letter to Senator Tom Coburn on Social Security Comments Print
Written by Dean Baker   
Wednesday, 16 March 2011 16:15

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.

 
Letter to Senator Richard Shelby on Social Security Comments Print
Written by Dean Baker   
Wednesday, 16 March 2011 14:55

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.

 
A Fair and Balanced NPR? Print
Written by CEPR   
Wednesday, 16 March 2011 08:38
Over at Beat the Press, Dean comments on a recent NPR piece that overwhelmingly accepts Republican assertions about the state of Social Security.  
 
The Hill Owes Readers an Explanation Over its Coverage Print
Written by CEPR   
Wednesday, 16 March 2011 06:54
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's Scary Graph Print
Written by CEPR   
Friday, 11 March 2011 20:12
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.
 
FactCheck.org Addresses its Angry Readers, But Not Really Print
Written by CEPR   
Friday, 11 March 2011 11:28

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.

 
Send Us Your Bonds, Krauthammer Print
Written by CEPR   
Friday, 11 March 2011 09:00
Over at Beat the Press, Dean challenges Charles Krauthammer's claim that the government bonds in Social Security's trust fund are "worthless."
 
CEPR Paper: Savings from Means Testing Limited Print
Written by CEPR   
Tuesday, 08 March 2011 11:45

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.

 
Letter to Senator Mark Warner on Social Security Comments Print
Written by Dean Baker   
Thursday, 17 February 2011 14:35
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.

Read more...

 

 
Letter to Senator Richard Shelby on Social Security Comments Print
Written by Dean Baker   
Wednesday, 09 February 2011 14:18

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.

Read more...

 

 
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