Nov
01
2011

To WaPo, Social Security Is a Treacherous Money Sucker

On its Sunday front-page, the Washington Post published an incredibly dishonest attack on Social Security.

Under the headline, "Social Security Adding Billions to U.S. Budget Woes," reporter Lori Montgomery reported that "Social Security passed a treacherous milestone"–a moment where the program, largely because of the recession, spent more in benefits than it took in.

What does this mean? Montgomery tells readers: "Social Security is sucking money out of the Treasury."

Montgomery complains that "fixing Social Security has largely vanished from the conversation" about the country's fiscal crisis, and politicians are "ducking the issue." She adds: "Many Democrats have largely chosen to ignore the shortfall, insisting the program is flush."

This is the kind of language one might expect in an editorial, where papers are normally free to take a position on an issue under debate. Here the Post is declaring in a news piece that politicians who do not believe Social Security is in a crisis are wrong.

Montgomery singles out Democratic Sen. Harry Reid for a fact check:

In an MSNBC interview, he added: "Social Security does not add a single penny, not a dime, a nickel, a dollar to the budget problems we have. Never has and, for the next 30 years, it won't do that."

Such statements have not been true since at least 2009, when the cost of monthly checks regularly began to exceed payroll tax collections.

Economist Dean Baker weighed in at his Beat the Press blog (his takedown of the Post's propaganda is a must-read):

Of course Senator Reid is exactly right. The system is self-financed under the law. In 2009 it began drawing on the interest on the government bonds it held. That is exactly what the law dictates, when Social Security needs more money than it collects in taxes, it is supposed to draw on the bonds that were purchased with Social Security taxes in the past. This means it is self-financing.

Anyone in the mood for factchecking at the Post might want to focus less on Reid and more on their own reporter. Here Montgomery tries to argue that people get more out of Social Security than they put in:

The average worker spends 20 years drawing benefits. A quarter will see their 90th birthday.

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.

Did you catch that? Montgomery switches gears from talking about Social Security to talking about the media's favorite underfunded safety net program, SocialSecurityandMedicare. Why? Because the research she's citing shows that the couple in question pays in more than it receives in benefits.

People who read the Washington Post know this–from a January 3, 2011, piece about this Urban Institute report:

The same hypothetical couple retiring in 2011 will have paid $614,000 in Social Security taxes, and can expect to collect $555,000 in benefits. They will have paid about 10 percent more into the system than they are likely to get back.

Montgomery needs readers to know that there are no politics involved here: "No crystal ball is necessary to predict Social Security's future. Hard numbers tell the story." That's a pretty rich assertion coming from someone who's writing such a dishonest article.

Somewhat unhelpfully, deep into the article readers are told:

Social Security can pay full benefits through 2036. Once the trust fund is depleted, the system would rely solely on incoming taxes, and benefits would have to be cut by about 25percent across the board.

Well, that doesn't sound like much of a crisis anymore, unless you believe the money in the trust fund won't be paid back to taxpayers. Which is what Montgomery seems to be warning, since the alternatives are apparently so dire:

The $2.6trillion 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.

As Baker pointed out, this process is exactly what the government does when someone redeems bonds. The challenge for Social Security bashers is to turn these events into a crisis–and demand that citizens accept the idea that the government should not pay them back what they are owed.

About Peter Hart

Activism Director and and Co-producer of CounterSpinPeter Hart is the activism director at FAIR. He writes for FAIR's magazine Extra! and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly (Seven Stories Press, 2003). Hart has been interviewed by a number of media outlets, including NBC Nightly News, Fox News Channel's O'Reilly Factor, the Los Angeles Times, Newsday and the Associated Press. He has also appeared on Showtime and in the movie Outfoxed. Follow Peter on Twitter at @peterfhart.