The New York Times is celebrating Social Security’s 90th birthday with an article by Mark Miller that purports to dispel six “myths” about the program. The Committee for a Responsible Federal Budget (CRFB) read it over and found that five of them are actually true.
The CRFB blog post goes through them one by one:
- “Social Security is ‘running out of money.'” It definitely is! The trust fund is projected to run out of money in 2033. The NYT acknowledges this is true but then says Congress can draw on general revenue to keep the program going. The CBO assumes that will happen when the trust fund runs out, but the trust fund definitely will run out.
- “Aging boomers are the problem.” The NYT says the aging population “was always anticipated.” CRFB rightly retorts, “The fact that lawmakers have known about this problem for over 40 years and done nothing to solve it does not make its existence a myth.”
- “Social Security helps drive the deficit.” The NYT says this is a myth because the program is self-funded, even though it just acknowledged earlier on that in several years it will need to draw from general revenues to keep benefits going. CRFB notes that Social Security costs have exceeded revenues by $1.4 trillion since 2010, and the shortfall this year is $250 billion. That adds to the deficit.
- “The trust fund is nothing but a pile of I.O.U.s.” The bonds in the trust fund are not backed by any assets. They are not traded on public markets. They are a promise from the federal government. The federal government has made good on those promises so far, but that’s all it is: a promise, which, in the context of money, can be called an I.O.U.
- “We need to cut benefits now to pay them later.” I suppose it could be called a myth to say “need,” but that’s really an opinion question. Cutting benefits now to pay them later is certainly one way to go about fixing the program, and as CRFB says, “acting sooner will literally reduce the necessary size of the adjustment.”
The only one of the six myths that is actually a myth was the final one: “Waste, fraud, and abuse abound.” There truly isn’t very much fraud in Social Security in the form of improper payments. One could say that the basic structure of the program itself is a fraud, but that’s the law.
The biggest myth about Social Security that is believed by both parties and needs to be busted is this: Politicians can continue to ignore Social Security reform and everything will turn out fine.