NBC's David Gregory falsely claimed Social Security will "pay out more than it's taking in by 2010"
SUMMARY: NBC's David Gregory falsely asserted that Social Security will "pay out more than it's taking in by 2010." In fact, according to the 2008 Social Security trustees' report, Social Security will not exceed the income rate before 2017 and will be able to pay full benefits until 2041, after which it will be able to cover between 78 and 75 percent of scheduled benefits through the end of the 75-year period the report's long-range projection covered.
During the February 1 edition of NBC's Meet the Press, host David Gregory falsely asserted that "Social Security is about to go -- pay out more than it's taking in by 2010." In fact, the 2008 Social Security trustees' report estimated that "[u]nder the intermediate assumptions, the OASDI [Old Age Survivors and Disability Insurance] cost rate is projected to increase rapidly and first exceed the income rate in 2017," not in 2010 as Gregory claimed. Moreover, as Media Matters for America has noted, the 2008 Social Security trustees' report forecasts that, in the absence of a change in the law, Social Security will be able to pay full benefits until 2041, after which it will be able to cover between 78 and 75 percent of scheduled benefits through the end of the 75-year period the report's long-range projection covered.
This is not the first time NBC has perpetuated myths about Social Security. As Media Matters documented, during the October 2, 2008, edition of NBC's Nightly News, NBC News correspondent John Yang falsely asserted: "At current rates, analysts say Social Security will run out of money by 2041." Additionally, on the September 18, 2008, edition of MSNBC Live, correspondent David Shuster stated that Social Security "will run out of money unless we make some major changes, at least in the next several years."
From the February 1 edition of NBC's Meet the Press:
MARK ZANDI (Moody's Economy.com chief economist): Let me make a point about the debt. It's 40 percent of GDP now. If the projections are right, we get to 60, maybe 70 percent of GDP, which is high, but it's manageable. In our history, we've been higher, as you pointed out. And moreover, it's very consistent with other countries and their debt loads. And more -- and just as important, investors understand this. They know this and they're still buying our debt, and interest rates are still very, very low. So we need to take this opportunity and be very aggressive and use the resources that we have at our disposal.
ERIN BURNETT (CNBC anchor): It's true. But you look at 67 percent, that's where Japan was when they did their first stimulus package back in 1989. And then they ended up going obviously significantly higher than that, which is why it all comes down to -- you're right, it's manageable, other countries are there, but if you don't get -- if you're not spending that money well, you're going to have to keep spending more and more and more. So it's a significant point.
GREGORY: And in terms of government spending, you have that if it's at 70 percent, we're not factoring in some of these unfunded entitlement programs like Medicare, the fact that Social Security is about to go -- pay out more than it's taking in by 2010. So there are some real concerns down the road.
ZANDI: Well, here's the other thing: If we don't do anything, the deficit's going to rise anyway. We're going to have a much worse recession. Tax revenues are going to fall even more significantly. Government spending will rise because of the income support program, so it could be that debt would be even higher.
And how much has the Iraq War cost us?
I know it's off topic, but I think its good to remind Republicans about their President's boondoggle whenever they start whining about how much Democrats want to spend on things that actually help people.
Invest, not spend. That's the big difference in a lot of what the Democrats are proposing.
just a thought. In the MMFA piece there is np mention of the date of the 2008 report. Most likely it was completed before the financial meltdown. The inflow/outflow issue could have changed drastically as part of the inflow is the earnings that the fund makes. Depending on where it was invested *1( its earnings may be near zero and (2) a loss of capital and 0% interest rates could put the fund in jeopardy. How do we know Gregory is wrong versus MMFA being wrong by quoting a grossly outdated report given recen tmarket changes??
Perhaps MMFA could do some real research and answer this question for us.
Perhaps MMfA should limit its articles about Gregory to things he knows well. The number of articles would be much smaller then.
Would there be ANY?
At the rate the economy is currently expanding(?), I wouldn't be surprised to see the next Trustees report move the date from 2017 back a year or two, still well beyond (in political terms) Gregory's 2010, but still not a good scenario.
I'm sure rising unemployment may make a dent in that date. Let's hope Obama's package passes and delivers as promised.
Kinda makes you understand now how we, as a county, end up in this kind of messes, doesn't it? When the media does not perform, or understand, research and the politicians are just playing political games with serious issues like economic disasters and wars. Democracy inaction at its best, for sure.
Amen. These establishment folks (including in the media) have taken the Wall Street Journal as their Bible for so long they are now behind the learning curve. If there has been a more irresponsible editorial page in America, I don't know what it is. (Why didn't last year's tax cut stimulus package work? Doesn't anybody remember the spike in the price of gas?) The Washington Post had a good piece, quoted by Frank Rich on Sunday, giving the consensus view on the abject failure of the Bush tax cuts. But I am beginning to think TV news, local and national, is just hopeless.
But the bottom line is still the same.
What's meant, I think, is that even if we do nothing Social Security will NOT go bankrupt like the right wing always spews. It will take until 2041 be fore benefits are reduced. Which means there is time to address this problem. Bush and the righties on the other hand were trying to make you think it was going under last week, and we should privatize it now. Its all the framing of the argument, and not letting the false conservative narrative take over. Yes Social Security needs some tweaking. Tweaking, not a major overhaul. Yes it faces problems DOWN THE ROAD. lets take some time, and fix it correctly. Not go off half-cocked like the right is trying to do..
Social Security is fine right now--we need to fix problems caused by Bush and the Republicans TODAY. We will fix the program that the Republicans have never liked and are using only to distract us TOMORROW.
Umm, I hate to say it, but republicans weren't the only ones responsible for SS and the problems it will face down the line. Almost every administration since inception of the SS program have had their hands in the SS cookie jar, taking money from the trust fund to fund other things. It would have been a simple fix awhile back, just keep their hands off of that money, but it seems, they can't do that, and then can't pay it back in either. That's where most of the problem resides, and it's not just a republican problem.
"Almost every administration since inception of the SS program have had their hands in the SS cookie jar..." As I understand it, back in 1983 Social Security began to take in more money than it was paying out in anticipation of the retirement of the Baby Boomers. These excess receipts weren't put in a cookie jar but were used to purchase US bonds of some sort - in theory a prudent investment. I don't know if there was ever a plan to spend the proceeds of these bond sales to the Social Security Trust Fund any differently from the way the government spends the proceeds of other bond sales.
Well said, mags...the situation requires a solution...not a partisan bitchfight about who should shoulder the blame...and I agree that there is plenty of blame to go around...including many former and present feckless republicans.
including many former and present feckless republicans.
I prefer to call them condomless Republicans ;-)
Rubberless and rudderless Republicans ridiculous in rhetoric and rigid in rabid railing agains rabble, rooting for rich rascals.
Anyway, as Ravi Bhatra points out in "Greenspan's Fraud", Reagan administration cut taxes for the wealthy...then the deficit exploded. Then, with Greenspan's urging (among others) the Social Security taxes were raised considerably; the sell was to pay for future Boomer retirement. But the con was that the revenue raised was used to reduce the deficit.
Both Republicans and Democrats have been complicit it raiding the supposed "trust fund" and the few who have called for a lock box, like Gore did, are riciculed, as Snoop says below.
Umm, I hate to say it, but republicans weren't the only ones responsible for SS and the problems it will face down the line. Almost every administration since inception of the SS program have had their hands in the SS cookie jar, taking money from the trust fund to fund other things. It would have been a simple fix awhile back, just keep their hands off of that money, but it seems, they can't do that, and then can't pay it back in either. That's where most of the problem resides, and it's not just a republican problem.
So says Magnolialover.
But this is not accurate. Using the excess money to earn interest and help resolve the issue of the coming baby boomer boomlet by having an excess amount of money collected is not a problem.
The problem is that if the economy doesn't grow enough, there won't be enough money coming in from current workers to pay for the retirees. We can either tax the current workers more in 2040, or we can cut benefits, or can do both, or we can make those changes before 2040, but the problem is not that we have allowed excess money to be loaned out.
yup, I agree with that accessment. Gore understood that and proposed a lockbox. Too bad he was rediculed for such a lofty notion.
Let's put it this way: just be glad Bush and the Repubs weren't able to privatize SS. Dodged a bullet there (more like a warhead).
Agreed. I think they would be quite pleased if the current crisis killed Social Security, along with the rest of the "Welfare State".
As the Republican Party Leader, Rush Limbaugh, admitted, their goal is to kill off the policies of Roosevelt.
Can you imagine if he had succeeded and privatized Social Security? How much of the money that we would have been able to invest in our own futures would have just vaporized in the last 6 months?
I'd love to hear from one of the proponents of privatization on how much worse it would be today if they had succeeded.
Depends really. For someone like myself that has 30+ years to keep on working, privatization might be a better tilt, as I'd be looking at it like another 401k plan. Mine has taken a beating lately, but I know, it'll bounce back (eventually), and I have plenty of time to wait for it to bounce back, and heck, I might need that time.
For older folks, closer to retirement, this would have been a disaster.
Anyway, we shouldn't privatize it, it's been working pretty darn well for lots of years, let's keep it that way. As I said before, if we could keep administrations from dipping their hand in there, we'd be better off.
Yes, you said it before, and it wasn't correct then, and it's still not correct. It's a debunked talking point to claim that it's a flaw of Social Security that the money in the trust fund gets loaned to the general treasury. It wouldn't make us better off if we kept the money locked in a vault. If we didn't gain interest on those funds, we'd run out of excess funds sooner. Loaning it out to the general treasury is a good thing.
If you can only pay 75% of your obligations, you are bankrupt.
You're still missing the point. (or are you?) We've got years before we have to do any thing about Social Security. there are MUCH more pressing problems right now! Going off abut SS is just an attempt to muddy the waters.
As mentioned above, we're lucky to even have SS. Had Bruce's conservative ideologic breathren succeeded in privatizing it we would have no SS right now.
These cons are little more than blubbering idiots with a clear lack of creative thinking and a cynical brain dysfunction to boot.
One simple idea is to raise the cap on taxable income for SS. There are betterprogressive ideas yet to be imagined if only we stop ceding the discussion to terms of block-head conservative privatization.
Privatizing SS would have ben extremely poor timing, that's certainly true.
I don't believe the solution is simple or it would have been done by now. Raising the cap does not generate enough revenue to cover scheduled benefits. It is extremely likely that benefits will have to be reduced in the future.
There are quite a few combinations of potential solutions for this problem, and it is something that needs to get done.
But it's conservative misinformation to claim that the time when income is exceeded by outgo is going to come sooner than it really will happen! It's not a big time crisis now. If we do nothing, it would be a crisis. It's not a crisis when income is exceeded by outgo.
Poor timing? That's a delicate way of conceding that it was a stupid idea to even consider in the first place.
Benefits probably will need to be reduced in the future. That is why it is absolutely necessary to bring income inequality back to earth now. We must have living wages, secure pensions and universal healthcare. No society on earth has ever thrived when wealth is so concentrated at the top, while average people have to go deep in debt to get by and excessive fortune buys the kind of disproportionate political power that murders the ethic of egalitarianism.
It's the pursuit of wild fortunes that have caused this global meltdown.
I disagree. I think we need to start working on this now. As it will be a priority. If we keep pushing it back, then we'll never get around to working on it. And sooner than we know, 2041 (or whatever date they use) will come around, and we'll start to panic. If we address is now, we have a good long time to come up with a really good solution as to how to save it, and make it work for many future generations.
Peebs7555, so how long do we wait? 2040 and double tax rates? or the next couple of years and make minor adjustments? There were some changes made about 25 years ago that extended the "life" of SS considerably. 2041 is not that far away. unless you are a politician.
On other SS threads, MMFA has made the claim that the fund will still be able to pay 75% of benefits as a counter-argument to the statement that the fund will be bankrupt. In that context, MMFA's counter argument is ineffective since that statistic does not disprove that the fund will be bankrupt.
In this thread MMFA just states the fact for some reason, I don't know why.
It's also disappointing, at least to me, that none of Gregory's guests caught this error. Or, if they did catch it, decided not to say anything about it.
It's probably p--ing into the wind (I didn't realize that the P-word would get blocked on this site, I'm embarrassed!,) but FWIW, here's a copy of the e-mail I just sent MTP:
On the February 1, 2009 edition of MTP, while discussing the economy with guests Mark Zandi and Erin Burnett, host David Gregory stated (among other things) that Social Security will "pay more than it's taking in by 2010." This statement is false.
As shown in the 2008 Social Security Trustees Report, the Trust will not being paying out more than it is taking in until 2017. (See Trustees Report at http://www.ssa.gov/OACT/TR/TR08/tr08.pdf#page=16). Moreover, the Trustees Report shows that even despite the cash intake deficit, the Social Security Trust will still be able to pay out 100% of projected benefits through 2041 and between 75% and 78% of projected benefits through at least 2082. Neither of the supposed "expert" guests corrected Mr. Gregory's misstatement or the incorrect impression he left about the "concerns" re: future Social Security funding and spending.
Giving Mr. Gregory and his guests the benefit of the doubt and assuming this incident was not the deliberate spread of partisan dis/misinformation, but rather was just ignorance and/or sloppiness, my comment is that such ignorance and/or sloppiness is unworthy of a show with the history, prestige, and influence of MTP. In fact, it is inexcusable. It is to be hoped that Mr. Gregory will study his homework a bit harder now that he has such an important position and that he will not allow similar "errors" to occur on future shows. Thank you.
More like a gnat fart in a hurricane.
As Al Franken frequently said on his radio show, 75 years is a long time into the future, and the way to fix this is to vary the income exemption. There is no reason someone should stop paying SS tax after $90 something thousand dollars. Bill Gates and everyone below him, if they paid the same rate, would easily keep social security solvent for centuries. But there are very smart people who could figure out how much everyone has to pay to make it work, and don't forget, the Baby Boom won't last forever and then we're back to a more even keel, if not even declining population once people wake up and realize we can't sustain 6 billion on the planet.
I agree with both points, but the Republican True Believers will fight you tooth and nail on both.
They will argue that it's not "fair" to apply the payroll tax to 100% of rich people's income, since most of their income is not in the form of wages.
Of course, this exposes another problem, i.e. that a lot of rich people pay taxes at a lower rate than most middle class workers. Why? Because the trickle-downers convinced enough people that income made from investments should be taxed at a much lower rate than income made from labor. And then they accuse Democrats of class warfare... go figure.
As for the population problem, it should be obvious to any rational observer. But just go back and read the Conservative comments about the Family Planning money that got stripped out of the Stimulus Package. In their minds, discouraging families from having 14 babies is "tyranny".
You will have to show me the list of people who encouraged this woman to have 14 children.
Also, you'll have to explain to me how the Family Planning money would have prevented this woman from having 14 children, since she was actively seeking pregnancy.
If you think we should limit how many children people should be allowed to have, I can agree with that. Some might say you would be limiting peoples freedoms if you did so.
Also, a declining population will make it more difficult for the working to support the retired. That's just factual. Unless we limit how long people can live, perhaps we should start pulling the plug on people at age ??? That would solve a lot of problems right there.
"There is no reason someone should stop paying SS tax after $90 something thousand dollars."
There is a reason. There's an upper limit to what a recipient can get. Since there's that upper limit, there should be an upper limit to what the ceiling is, but it certainly can be and should be raised.
"MMFA continues to note that the fund will be able to cover between 78 and 75 percent of scheduled benefits after 2041, as if that's acceptable."
They continue to note it because based on the trustees' report, it's true.
"MMFA continues to note that the fund will be able to cover between 78 and 75 percent of scheduled benefits after 2041, as if that's acceptable."
I think the poster has confused MMFA's concern for facts about the subject with advocating some sort of position on the subject itself. It's not that 2041 is "acceptable" or not but that 2041 is very different than 2010.
1. Just because rates are low now doesn't mean that rates will be low in the near future. Borrowing money because it appears puts the US in a situation where it will have to pay more later. If we use short term debt that rolls over we will be subjected to rate increases as soon as they happen, if we use long term debt we still confront the problem of future deficits by soaking up availible funds.
2. Using other countries as an excuse for why our new loads is unacceptable. the more debt that is out there the worse off you are issuing debt. We saw this during the housing bubble, when everyone uses the same model for risk you end up with a convergence of that risk essentially building the black swan event. If and when the event comes that drives governments to insolvency the fact that everyone else is screwed as well is little (er, no) consolation.
3. Investors sentiment should not be viewed as an absolute measure of solvency or health, only a realtive measure. People buying US bonds means that they view US bonds as the best investment, but that doesn't nessecarily mean they are a 'good' investment. The nature of our current meltdown has individuals and companies placing premiums on short term survival, this should not be extrapolated without rigorous investigation.