MYTH: Post Portrays Social Security As A “Drain On The Budget”

Wash. Post: “Social Security Adding Billions To U.S. Budget Woes.” The headline on the October 30 print edition of the Post article reads, “Social Security Adding Billions To U.S. Budget Woes.”

[The Washington Post, 10/30/11]

Wash. Post: Social Security Is A “Drain On The Budget”; The “Trust Fund Will Provide Little Relief.” From the article:

Social Security is hardly the biggest drain on the budget. But unless Congress acts, its finances will continue to deteriorate as the rising tide of baby boomers begins claiming benefits. The $2.6 trillion Social Security trust fund will provide little relief. The government has borrowed every cent and now must raise taxes, cut spending or borrow more heavily from outside investors to keep benefit checks flowing. [The Washington Post, 10/29/11]

Wash. Post: Escalating Federal Debt Has “Crippled The Government's Ability To Repay The Trust Fund.” From the article:

And 10 years of escalating debt have crippled the government's ability to repay the trust fund. [The Washington Post, 10/29/11]

REALITY: Trust Fund Is Invested In Treasury Securities, Which U.S. Government Has Never Defaulted On

CBPP: Repaying Trust “Will Be A Concern For The Treasury -- But Not For Social Security, As Long As The Solvency Of The Federal Government Itself Is Not Called Into Question.” Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities, wrote:

Money that the federal government borrows from the public or from Social Security is used to finance the ongoing operations of the government in the same way that money deposited in a bank is used to finance spending by consumers and business. In neither case does this represent a “raid” or misuse of the funds. The bank depositor will get his or her money back when needed, and so will the Social Security trust funds.

When Social Security needs to start cashing in its holdings of Treasury securities to meet its benefit obligations, the federal government will have to increase its borrowing from the public, or raise taxes, or spend less. That will be a concern for the Treasury -- but not for Social Security, as long as the solvency of the federal government itself is not called into question. Social Security will be able to sell its bonds just as any private investor might do. [Center on Budget and Policy Priorities, 10/5/10]

Century Foundation's Anrig: Trust Fund “Will Be Paid Back ... By Taxes Collected In The Future -- Just As The Government Has Paid Back Interest And Principal On All Securities It Has Ever Issued.” Greg Anrig of the Century Foundation wrote on its group blog, Taking Note:

Backed by the full faith and credit of the U.S. government, the interest and principal on the Treasury securities in the trust fund will be paid back in full by taxes collected in the future -- just as the government has paid back interest and principal on all securities that the government has ever been issued. No additional burden is placed on future taxpayers due to Social Security beyond the commitment that was already made through the reforms in 1983. [Greg Anrig, Taking Note, Century Foundation, 3/9/11]

CBPP: “Trust Funds Are Invested In Treasury Securities That Are Every Bit As Sound As The U.S. Government Securities Held By Investors Around The Globe.” From CBPP's Van de Water:

[T]he Social Security trust funds are invested in Treasury securities that are every bit as sound as the U.S. government securities held by investors around the globe; investors regard those securities as being among the world's very safest investments.

[...]

[T]he Treasury securities that the trust funds hold are backed by the full faith and credit of the U.S. government. The U.S. government has never defaulted on its obligations, and investors consider U.S. government securities to be one of the world's safest investments. [Center on Budget and Policy Priorities, 10/5/10, emphasis original]

MYTH: Post Repeats Misleading “Life Expectancy” Talking Point

Wash. Post: “Life Expectancy Was Significantly Lower” When Program Started. From the Post article:

Created during the Great Depression, Social Security grew in popularity as Congress repeatedly raised benefits through the 1950s and 1960s and then, in the 1970s, set initial benefits to rise automatically with wages and with inflation thereafter.

Those changes made the program vastly more expensive than the “old age and survivors” insurance originally envisioned by President Franklin D. Roosevelt. He wanted to protect workers and their families from financial hardship due to death, disability or aging. Retirement benefits were available at 65, at a time when life expectancy was significantly lower than today. [The Washington Post, 10/29/11]

REALITY: Life Expectancy At Age 65 Has Increased By Five Years, While Retirement Age Has Increased By Two Years

Wash. Post's Ezra Klein: “Beneficiaries Are Getting Three More Years Of Social Security Now Than They Were Then.” From The Washington Post's Ezra Klein:

Since Social Security's inception, life expectancy at age 65 has risen about five years and the retirement age has increased by two years, so beneficiaries are getting three more years of Social Security now than they were then. Most people don't know this, but most of the experts who deal with these programs do. [Wonkblog, The Washington Post, 5/10/10]

LA Times' Hiltzik Debunks “Longevity” Talking Point: “Longevity Has Hardly Soared.” From Los Angeles Times columnist Michael Hiltzik:

If people are living longer than they used to, doesn't that raise the cost of Social Security benefits? And won't pushing off retirement for a few years fix that?

Not necessarily. For one thing, longevity has hardly soared. The average life expectancy of someone who has reached age 65 was about 78 in 1940 and about 83 in 2005. In other words, a gain in the average length of retirement of about five years over six decades. And that's for the whole population. For black males, there has been a gain of just over 2 1/2 years, to an average of 80 for those reaching age 65 in 2005.

That's not nothing, but it isn't 20 years, as some people, like former GOP Sen. Alan Simpson of Wyoming (a member of the deficit commission), seem to think. Also, it has been addressed by changes in Social Security taxes going back as far as 1983. [Los Angeles Times, 7/20/10]

MYTH: Post Misleadingly Mixes Medicare, Social Security Costs

In Article On Social Security, Wash. Post Uses Medicare To Inflate Lifetime Cost Estimates. From the article:

As a result, the average retirees have gotten back far more in federal benefits than they paid into the system during their working life, according to research by Eugene Steuerle, a senior fellow at the Urban Institute. That return is diminishing, in part because people today have paid more into the system than previous generations. But a two-earner, middle-income couple retiring this year can expect to get $913,000 in Social Security and Medicare benefits over their lifetimes, in return for $717,000 in payroll taxes. [The Washington Post, 10/29/11]

REALITY: Social Security And Medicare Pose Categorically Different Challenges To Policy Makers

EPI: Social Security Spending Is Stable While Medicare Spending Rises Over Time. From an Economic Policy Institute briefing paper by Harry C. Ballantyne, Lawrence Mishel, and Monique Morrissey:

In reality, health care cost inflation and insufficient tax revenues are by far our biggest long-term budget challenges.

[...]

[Economic Policy Institute, 8/6/10]

(Click here for more on how the mainstream press regularly gets Social Security wrong.)

Post Uses Loaded Language, Unsubstantiated Claims To Describe Social Security's Finances

Wash. Post: Social Security Has “Passed A Treacherous Milestone.” From the article:

Last year, as a debate over the runaway national debt gathered steam in Washington, Social Security passed a treacherous milestone. It went “cash negative.” [The Washington Post, 10/29/11]

Wash. Post: Social Security Is “Sucking Money” From The Treasury. From the article:

Now, Social Security is sucking money out of the Treasury. This year, it will add a projected $46 billion to the nation's budget problems, according to projections by system trustees. Replacing cash lost to a one-year payroll tax holiday will require an additional $105 billion. [The Washington Post, 10/29/11]

Wash. Post: Changing Inflation Measure Is A “Modest Change.” From the article:

Just as the GOP has rejected any form of tax increase to contain the debt, however, Reid and House Minority Leader Nancy Pelosi (D-Calif.) have ruled out any reduction in government retirement benefits. Last week, Reid softened his stand, backing a Democratic proposal to the supercommittee that included the change in the Social Security inflation index. In return, however, Democrats demanded $1.3 trillion in new tax revenue -- which Republicans instantly rejected, leaving the ideological divide as wide as ever.

Even that modest change to Social Security is drawing fire, however, from a powerful network of organizations representing the elderly, unionized workers and traditional liberals. For years, these groups have cast any proposal to trim the growth in retirement benefits as unnecessary -- and as a mean-spirited attack on the elderly. [The Washington Post, 10/29/11]

Conservatives Use Post Story To Attack Social Security

Fox Echoes Wash. Post's Biased Rhetoric, Uses It As A Launching Pad To Attack Social Security. From Fox News' America's Newsroom:

BILL HEMMER (co-host): To the nation's economy now. Social Security reaching a dangerous tipping point. The program that once paid its own way through payroll taxes is now sucking money out of the Treasury.

[...]

HEMMER: We were all told that Social Security was OK. It was Medicare and Medicaid that was the issue. What's up? [Fox News, America's Newsroom, 10/31/11]

Gateway Pundit: “Social Security Is In The Red.” From a Gateway Pundit post by Jim Hoft that excerpted the Post article, titled “In 2005 Dems Blocked GOP Proposals to Fix Social Security...Today Social Security Is officially In The Red”:

In 2005 Congressional Democrats blocked Republican proposals to save Social Security.

Then they wildly cheered their own obstructionism during the State of the Union Address the following year.

Today Social Security is in the red.

As Americans were focusing on Barack Obama's record debt and unemployment the last two years, Social Security went cash negative this past year. [Gateway Pundit, 10/30/11, emphasis original]

Ace of Spades: Federal Government Has Been “Fudging The Numbers,” And “The Lies Are Falling Apart.” From an Ace of Spades HQ blog post that linked to the Post article:

Once again, the Feds express shock that Social Security went into the red so much sooner than they expected. They've been fudging the numbers for so long -- since the very start of the program, actually -- that no one really knew what the hell was going on. They still don't, really. What you're hearing are the best guesses of politicians and their economist pets who have every reason to lie. But as Walter Russell Meade observes, all the lies are falling apart. [Ace of Spades HQ, 10/31/11]

Progressive Experts Have Criticized Post Article

Dean Baker: Wash. Post Story “Would Have Been Excluded From Most Opinion Pages Because Of All The Inaccuracies It Contained.” From economist Dean Baker writing at Beat the Press, a blog of the Center for Economic Policy Research:

News outlets generally like to claim a separation between their editorial pages and their news pages. The Washington Post has long ignored this distinction in pursuing its agenda for cutting Social Security, however it took a big step further in tearing down this barrier with a lead front page story that would have been excluded from most opinion pages because of all the inaccuracies it contained. [Beat the Press, Center for Economic Policy Research, 10/29/11]

NY Times' Krugman: Article Invokes “A Favorite Point Used To Create Confusion By Those Who Want To Kill The Program.” From Nobel laureate Paul Krugman's New York Times blog:

Dean Baker is angry at the Washington Post for spreading disinformation about Social Security. He's right, of course -- and it's shocking that a well-known fallacy is the subject of a “news analysis” that purports to inform readers.

You see, the WaPo makes a big deal of the fact that Social Security is currently taking in less in payroll taxes than it's paying out in benefits. Yet this means nothing, except as a favorite point used to create confusion by those who want to kill the program.

[...]

What you can't do is insist that the trust fund is meaningless, because SS is just part of the budget, then claim that some crisis arises when receipts fall short of payments, because SS is a standalone program. Yet that's exactly what the WaPo claims.

This is what you call negative journalistic value added. [Paul Krugman, The Conscience of a Liberal, The New York Times, 10/30/11]

Alliance For Retired Americans: “We Cannot Allow Politicians” Or The Media “To Use This Budget Climate As Political Cover For Misleading Attacks On A Great American Success Story.” Media Matters obtained a statement from Edward F. Coyle, executive director of the Alliance for Retired Americans:

We cannot allow politicians or those in the media who have never liked Social Security to use this budget climate as political cover for misleading attacks on a great American success story that has kept generations of seniors out of poverty. Social Security has amassed a $2.6 trillion surplus to prepare for upcoming retirements, and the Treasury Department pays interest to the Social Security Trust Fund on what it borrows.

NCPSSM President Max Ritchman: Wash Post Story “So Riddled With Factual Inaccuracies And Biased Rhetorical Flourishes It Has No Business In The News Section Of” A Major Newspaper. From a letter to the editor submitted to The Washington Post by Max Ritchman, president and CEO of the National Committee to Preserve Social Security and Medicare, obtained by Media Matters:

Dear Editor:

On behalf of millions of Americans who have worked for and earned their Social Security benefits, I take strong exception to Sunday's front-page piece by Lori Montgomery titled “Social Security adding billions to U.S. budget woes.” This story is so riddled with factual inaccuracies and biased rhetorical flourishes it has no business in the news section of a major, or that matter, any newspaper.

The entire premise of the piece is built on a foundation of falsehoods that have been perpetrated for decades by those who oppose Social Security with virtually no balance provided for the reader. Bias reported as fact is the hallmark of this story. For example, Social Security's short-term shortfall is not a “treacherous milestone,” but indeed a natural consequence of the programs' funding mechanism. Surpluses have been built up in Social Security since the last major reforms in 1983 precisely so funds would be available to pay benefits of the baby boom generation as they began retiring

[...]

I strongly urge the Washington Post to limit its editorializing to the appropriate editorial pages and stop disguising opinion as news reporting.