CNN senior correspondent Allan Chernoff falsely asserted on The Situation Room that Social Security "will go bust, be out of money, in 2041." In fact, according to a 2007 federal report, "[p]resent tax rates would be sufficient to pay 75 percent of scheduled benefits after trust fund exhaustion in 2041 and 70 percent of scheduled benefits in 2081."
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On the January 21 edition of CNN's The Situation Room, senior correspondent Allan Chernoff reported: "Voters know that Social Security is a financial time bomb that needs fixing. The latest government calculation is that the system will go bust, be out of money, in 2041." In fact, contrary to Chernoff's assertion that "government calculation[s]" show "that the system will ... be out of money" in 2041, the most recent Old-Age, Survivors, and Disability Insurance Trustees Report (released on April 23, 2007) stated: "Present tax rates would be sufficient to pay 75 percent of scheduled benefits after trust fund exhaustion in 2041 and 70 percent of scheduled benefits in 2081."
Additionally, while discussing the Republican presidential candidates who proposed private accounts purportedly to address expected Social Security shortfalls, Chernoff failed to note that even the Bush administration has acknowledged that its proposal for private Social Security accounts -- on its own -- would do nothing to address Social Security solvency.
Chernoff also misleadingly contrasted Republican presidential candidates' positions on Social Security with those of the Democratic presidential candidates, saying: "Rather than permitting private accounts, Democrats are proposing more taxes." But contrary to Chernoff's suggestion, the Democratic candidates have not rejected the notion of private accounts as a supplement to -- rather than as a replacement for part of -- Social Security payments. Indeed, the leading Democratic candidates each have proposals to provide incentives for private savings:
- Sen. Hillary Rodham Clinton (NY) has proposed "a matching refundable tax credit -- dollar-for-dollar -- for the first $1,000 of savings done by every married couple making up to $60,000," as part of her American Retirement Accounts plan.
- Sen. Barack Obama (IL) has said he intends to "expand the existing Savers Credit to match 50 percent of the first $1,000 of savings for families that earn under $75,000, and he will make the tax credit refundable."
- Former Sen. John Edwards (NC) has proposed Universal Retirement Accounts, in which "[w]orker contributions will be matched up to dollar for dollar on the first $500 by a new Get Ahead tax credit."
Similar to Chernoff's claim that "[v]oters know that Social Security is a financial time bomb that needs fixing," Situation Room host Wolf Blitzer asserted, "Everyone seems to agree that the Social Security system is in deep trouble." Introducing the segment, Blitzer further stated that Chernoff "has been talking to voters out there" about the issue. However, Chernoff's report quoted only one voter -- a man indentified as dentist Todd Maggiore, who said of Social Security, "Do I believe it's going to be there for my generation? Absolutely not," and said of Bush's privatization plan, "I thought that was a great idea." According to Chernoff, Maggiore is "leaning towards [Republican presidential candidate Rudy] Giuliani."
According to PollingReport, the most recent poll on President Bush's handling of Social Security (Associated Press-Ipsos, January 3-5, 2006) showed that 60 percent of respondents "disapprov[ed]" of the way Bush was handling the issue. In the 12 AP-Ipsos polls from February 2005 to January 2006, Bush's approval rating on Social Security was always below 40 percent.
From the January 21 edition of CNN's The Situation Room:
BLITZER: Everyone seems to agree that the Social Security system is in deep trouble.
MAGGIORE [video clip]: Do I believe it's going to be there for my generation? Absolutely not. I'm just paying more in that I'm not going to get.
BLITZER: So, which presidential candidate is poised to capitalize on the concerns about Social Security?
BLITZER: There's at least one issue that all the candidates seem to agree on somewhat. That would be Social Security. Everyone acknowledges that, long term, it's in trouble. But they differ on what needs to be done.
Our senior correspondent, Allan Chernoff, has been talking to voters out there. Allan, what are people saying about Social Security as an issue -- a critical issue -- in this race?
CHERNOFF: That's right, Wolf.
Voters know that Social Security is a financial time bomb that needs fixing. The latest government calculation is that the system will go bust, be out of money, in 2041. So voters who are paying in want something done.
[begin video clip]
CHERNOFF: Talk about Social Security with 39-year-old dentist Todd Maggiore, and it's clear he feels he's the one getting a drilling.
MAGGIORE: How long has it been since your last cleaning?
Do I believe it's going to be there for my generation? Absolutely not. I'm just paying more in that I'm not going to get.
CHERNOFF: That's why Maggiore favors private Social Security accounts that workers could manage on their own. President Bush proposed letting Americans have the option to privatize part of their Social Security. It would mean Washington would have to pay out fewer benefits, but the plan failed to gain support in Congress.
MAGGIORE: I thought that was a great idea.
CHERNOFF: Mike Huckabee agrees.
MIKE HUCKABEE (Republican presidential candidate): The president had the right idea, but he used the wrong word.
CHERNOFF: "Personalization," not "privatization," is Huckabee's preferred term. Mitt Romney and Rudy Giuliani say they'd consider personal savings accounts.
GIULIANI: The first thing we have to do is get a consensus behind private accounts, if we're going to change it.
CHERNOFF: But John McCain says personal accounts should only be a supplement to Social Security, which he claims he'll fix without raising taxes.
Rather than permitting private accounts, Democrats are proposing more taxes. Barack Obama and John Edwards say they want wages above the current cap of $102,000 to be subject to Social Security taxes.
OBAMA: Lift the cap on the payroll tax for potentially exempting folks in the middle, middle-class folks, but making sure that the wealthy are paying more of their fair share.
CHERNOFF: Edwards says he'd increase Social Security taxes for those earning above $200,000.
EDWARDS: Beyond that, I would raise the cap. I'd lift the cap.
CHERNOFF: Hillary Clinton offers less detail, simply saying she'd form a bipartisan commission to study options.
CLINTON: My plan for Social Security is fiscal responsibility first, then to deal with any long-term challenges.
CHERNOFF: Maggiore doubts any candidate can fix Social Security. He's leaning towards Giuliani, mainly because he believes the former mayor would be strong on national defense.
MAGGIORE: I'm not real confident that this is an issue that's going to be resolved real soon.
[end video clip]
CHERNOFF: President Bush tried but failed to change Social Security. There's no reason to believe that the next president will have an easier time of it. Wolf.
BLITZER: Allan Chernoff, thanks very much.