Social Security: The Truth Emerges (Slowly)
The Washington Times, December 21, 1998
Ann Arbor News, December 20, 1998
President Clinton's little ruse on Social Security is getting threadbare. It's about to reach the point where little Toto pulls the curtain back and exposes the Wizard of Oz as a sham.
Stories are beginning to surface in the press, stating what everyone who has looked at the numbers has known for years: Social Security is financially sound for the foreseeable future. Proposals to "reform" the system are driven by politics-- including Wall Street's enormous interest in privatization-- and not by any problem with the program's finances.
"What Social Security Crisis?" was the title of Business Week's editorial in the November 30th issue. And not a moment too soon.
It is one thing to deceive the public about something that has about as much relevance to their lives as Prince Charles' 50th birthday. It is quite another to "mislead the American people"-- to quote the President in another context-- about a program that helps support 44 million people, or about one out of every six Americans.
Over the last couple of years I have been telling many cynical people here in Washington that the truth would inevitably leak out as the politicians got closer to actually considering the cuts that would push millions of senior citizens below the poverty line. That is finally beginning to happen.
The reason that this charade has lasted so long is that so many of the major players have an interest in pretending that there is a problem to fix. President Clinton sees an opportunity to create a legacy for himself, hopefully displacing the more embarrassing one that the media has carved out for him. Many Republicans would like to achieve the privatization that they could only dream about during the Reagan era, but dared not pursue. And there are plenty of Democrats who like to keep the issue on the table because, as they learned in November, it helps them win elections.
And then of course there is Wall Street, salivating over the tens of billions of dollars in potential brokerage and administrative fees that would be theirs, if they could just get this huge pile of retirement savings and income to pass through their hands.
In 1983 the Social Security system was just a few months away from not having enough money to meet its obligations. Of course nobody missed a check, and it is doubtful that anyone ever will, so long as the government still exists. Those who really want to save Social Security need only to accomplish one thing: stop Congress from changing the law. All promised benefits-- which increase with rising wages and are adjusted for inflation-- will then be paid.
We are now at least 34 years away from reaching the point we hit in 1983. None of the participants in the White House conference, which is heavily stacked in favor of those who would privatize and cut benefits, would dispute this projection. But you would have to cross-examine them very diligently to get them to admit it.
The good news is that more journalists are visiting the Social Security Administration's web site (www.ssa.gov), where they can look at the actual numbers. There they will discover that even the projected shortfall 34 years from now is based on the assumption that the economy will grow about half as fast in the future as it did in the past. In other words, the system may never run short of money at all.
If they read carefully, they will also find that Social Security will not suffer any strains during the baby boomers' retirement, since that has already been provided for. And that any shortfall for the whole 75-year planning period could be covered by tax increases less than those of 1950s, 60s, or the 70s. In other words, they will find that there is no real news here at all, except perhaps that the public has been bamboozled into thinking that the Social Security system was headed for insolvency.
When the public discovers how far away and uncertain the program's "problems" really are, the whole "reform" effort will collapse like a house of cards. So for all those who really want to save Social Security, here are three words of advice: tell the truth. Even in Washington, there are times when honesty is the best policy.
Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of the forthcoming book Failed: What the "Experts" Got Wrong About the Global Economy (Oxford University Press, 2015).