In a July 14 Los Angeles Times article, staff writer Peter Wallsten asserted as fact that in recent comments about Social Security, Sen. John McCain used the word “disgrace” to refer to how “younger workers are forced to pay for a plan that, in his view, is unlikely to benefit them when they retire.” In making the assertion, Wallsten was echoing McCain's reported explanation of a comment he made on July 7: “Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed.” But in simply echoing McCain's reported explanation -- that he was remarking on the fact that young people, in McCain's words, are “paying so much that they are paying into a system that they won't receive benefits from on its present track that it's on” -- Wallsten ignored an assertion by McCain on CNN on July 8, the day after the original controversial comment. On the July 8 edition of CNN's American Morning, McCain again appeared to be denouncing the Social Security system itself and not, as Wallsten reported, the fact that absent legislative change, the system faces insolvency in the future. On American Morning, McCain said that younger people “pay their taxes and right now their taxes are going to pay the retirement of present-day retirees. That's why it's broken, that's why we can fix it. We can do it together, Republicans and Democrats alike.”

Wallsten included a quote from McCain's American Morning appearance in his article, but did not include that comment.

Further, Wallsten quoted McCain's statement that “it's terrible to ask people to pay into a system that they won't receive benefits from,” but did not directly note that the assertion that young workers will not receive Social Security benefits upon retirement is false. According to the Social Security and Medicare Boards of Trustees, if no legislative changes are made, “Tax income would cover 75 percent of scheduled benefits in the final year (2082) of the 75-year projection period.”

Wallsten later wrote that after 2041, “workers' payroll taxes would cover only a fraction of the benefits promised to retirees” -- but did not note the size of that fraction. According to the “Summary of the 2008 Annual Social Security and Medicare Trust Fund Reports” by the Social Security and Medicare Boards of Trustees:

For OASDI [the combined Old-Age and Survivors' Insurance and Disability Insurance trust funds], interest income will first be needed to pay a portion of benefits in 2017, although the trust funds will continue to accumulate assets. In 2027, trust fund assets will begin to be depleted and are projected to be exhausted in 2041, after which continuing tax income would be sufficient to cover 78 percent of scheduled benefits. Tax income would cover 75 percent of scheduled benefits in the final year (2082) of the 75-year projection period. Although the projected exhaustion date for the DI Trust Fund is 2025, the value of the OASI Trust Fund would be sufficient at that point to make assets available to pay full DI benefits, but only with authorizing legislation.

From the Los Angeles Times article headlined “McCain takes a Social Security risk”:

McCain, the presumed Republican presidential nominee, spoke several times last week about changing how the popular retirement program is funded, at one point calling it a “disgrace” that younger workers are forced to pay for a plan that, in his view, is unlikely to benefit them when they retire.

Democrats are gearing up to turn McCain's stand on Social Security, and his willingness to consider a privatization plan, into a key campaign issue. They say changing the program in that way would undermine retirees' benefits, and they hope to use the issue to harm the Arizona senator's support among a set of voters who tilt toward him -- seniors.

[...]

McCain's remarks on Social Security came during a week that showcased his ideas for the economy. When asked by a young woman at a Denver town hall meeting last Monday how to make Social Security viable for her generation, he said she could not rely on the system “unless we fix it.”

“We are paying present-day retirees with the taxes paid by young workers in America today,” he said. “And that's a disgrace. It's an absolute disgrace, and it's got to be fixed.”

His comments seemed to suggest that McCain favored a new funding mechanism for Social Security benefits, such as private accounts. Later, on CNN, McCain seemed to fully embrace the idea of private accounts. “I want young workers to be able to, if they choose, to take part of their own money, which is their taxes, and put it in an account which has their name on it,” he said. Participation would be a “voluntary thing,” he said, and “would not affect any present-day retirees or the system as necessary.”

[...]

His aides said Democrats were misrepresenting his statements; his only plan for fixing Social Security, they said, is forging a bipartisan compromise that considers all options.

Still, McCain did not back down, saying later in the week that “it's terrible to ask people to pay into a system that they won't receive benefits from.”

At issue is how to shore up the finances of the Social Security system, which will come under pressure as more than 70 million baby boomers -- the generation born between 1946 and 1964 -- enter retirement and receive their benefits.

A government report in March painted a gloomy picture of the program's future, estimating that its costs will surpass payroll tax revenue in 2017 -- forcing the system to rely on a trust fund that, the report said, will go broke in 2041.

After that, workers' payroll taxes would cover only a fraction of the benefits promised to retirees.