Letter to Senator Kerry on Social Security Comments
|Written by Dean Baker|
|Wednesday, 10 August 2011 12:25|
218 Russell Senate Office Building
United States Senate
Washington, DC 20510
Dear Senator Kerry:
In a recent interview you said that our nation's problem is one of "long-term debt." You described this debt as "...the structural debt of Social Security, Medicare and Medicaid measured against the demographics of our nation. That then juxtaposed to the lack of jobs and job creation and growth."
In reality, this is not the case. Social Security does not contribute to the debt in either the short-term or long-term. Under the law, Social Security can only spend money that was raised through the designated Social Security tax or from interest on the bonds purchased with this money. The latest projections from the Congressional Budget Office show that the program can pay full benefits through the year 2038 and slightly more than 80 percent of scheduled benefits in subsequent years.
However, this projected gap can only be made up by additional funding approved by Congress. If there are no legislated changes and this projection proves accurate, then less than the full benefit will be paid, and therefore Social Security will not be contributing to the deficit even in the years after it is first projected to face a shortfall.
While it is true that the lack of jobs and jobs creation is significantly impeding the growth of our economy, Social Security is not. And as the discussion over Social Security continues in Congress, 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.