USA Today's Social Security Scaremongering

[gulfcoastliberal]

Under the headline "Social Security Races to 'Negative': Rash of Retirements Push Fund to Brink," USA Today's February 8 front page presented an alarmist view on a story that is regularly misreported in the corporate media (Extra!, 7-8/95, 1-2/05; FAIR Action Alert, 10/19/07).

Reporter Richard Wolf leads with this warning: "Social Security's annual surplus nearly evaporated in 2009 for the first time in 25 years." But several paragraphs later, readers are told that the program has been "accumulating a $2.5 trillion trust fund"--which certainly sounds less ominous than the headline's warning about being on a "brink." And by a "nearly evaporated" surplus, USA Today means that Social Security "took in only $3 billion more in taxes last year than it paid out in benefits."

CUT

Actually, the fact that Social Security would begin paying out more in benefits is neither alarming nor particularly surprising. In the 1980s, Social Security taxes were raised and benefits cut in the name of covering the retirement of the Baby Boomers--and, not incidentally, so that the system could loan its surplus to the Treasury Department to cover for Reagan's income tax slashing (Extra!, 1-2/88; Nation, 3/2/09). That money was to be paid back with interest, just like the U.S. Treasury's debts to China, Japan, private U.S. citizens and everyone else who owns Treasury bonds. If Social Security fails to collect the money that is owed to it by the Treasury, that would amount to a massive fraud and transfer of wealth, as trillions of dollars specifically collected to pay for workers' retirement benefits would never be used for that purpose, and instead would merely transfer the general cost of government from progressive income taxes to the regressive payroll tax (Center for Economic and Policy Research, 1/27/05).

The money borrowed from Social Security is currently scheduled to be paid back by 2037, at which point the program will have an actual deficit. But many experts have argued for years that this projected future shortfall is not a short-term crisis, and can be addressed with minor changes like eliminating the cap on taxable income, so that the wealthy would pay the same percentage of their income as middle-income and poor workers (Social Security: The Phony Crisis, 1999).

http://www.baltimorechronicle.com/2010/020910FAIR.shtml

Gee, we really need that commission! /sarcasm

[KoKo]

1. Is "reporter Richard Wolfe" the one that appears on MSNBC all the time? The Brit?

:shrug:

[laughingliberal]

2. Yep! The main purpose of the commission will be to enable the theft of our SS money

without having to debate it in the light of day in Congress. At least, thank the stars, they defeated it in Congress. That deal would have meant the House and Senate would have had to vote up or down on the proposals in their entirety. At least now it is not subject to that and there will be debate on their recommendations.

[fascisthunter]

3. I Think the Wealthy will Only Be Happy if we all die

[OHdem10]

4. When are they going to pay back all the I O Us Presidents and

Congress Critters have borrowed for other purposes?
Not to bash, but as an example: Regan borrowed millions
and millions for his defense buildup during the Cold War?
I O Us have been left by Congress when they borrowed from
this fund. Now to start screaming--it is in the red, is
downright annoying.

[damntexdem]

6. It's not in the red because it has invested in government notes.

Were the government to default on the SS trust fund, why should any lender lend to the feds?

[damntexdem]

5. GOPers refer to Social Security as being 'not fully funded' -- that's a bare-assed lie.

It has always been not just fully funded but over-funded -- that's what the trust fund is, the surplus. Even should it start paying out more than it takes in, it would still be fully funded, by that trust fund surplus. Only if it uses up its surplus and still pays out more than it takes in, would it not be fully funded. But that can easily be taken care of by raising, or better eliminating, the income cap on FICA taxes.