Slowly, ever so slowly, the mainstream media is discovering the Social Security story. So it’s worth noting two pieces in prominent news outlets this week: one on Businessweek.com by Chris Farrell, a contributing economics editor for Bloomberg Businessweek, and the other in USA Today.
It’s refreshing to see Farrell’s piece, because it is not the usual doom-and-gloom treatment we’ve been seeing in the MSM. From the get-go, Farrell makes a crucial point: all entitlements are not created equal, although the anti-entitlement crowd and those in the press who like to quote them would have you believe that. Farrell writes:
Most commentary assumes that socialsecuritymedicaremedicaid is one word. Yes, they’re all entitlement programs, yet the bulk of the long-term budget pressure comes from higher health-care spending.
He then makes two more super-important points:
First, Social Security trustees guesstimate that the cost of Medicare will swell to more than 11 percent of GDP in 2083—94 percent more than Social Security will cost.
Second, there is no Social Security crisis. “The system,” he says, “isn’t broke.”
Farrell then discusses what he calls the “manageable” financial trouble down the road, and notes that economic growth might address some of Social Security’s projected shortfall. He calls for a “modest mix of changes such as raising the retirement age and doubling the cap on annual wages subject to the payroll tax.” He also mentions improving Social Security to augment the benefits, with a program of voluntary additional contributions. While all these proposals have pros and cons, at least Farrell’s story puts them on the media’s table. All to the good.
The USA Today story was garden variety gloom-and-doom, based on a poll the paper conducted with the Gallup organization. The headline was scary indeed: “Poll: Faith in Social Security system tanking.” So were the conclusions of the poll. It found that a majority of retirees expect their current benefits to be cut, which the paper said was “a dramatic increase in the number of people who hold that view.” Furthermore, Susan Page, who reported the story, noted that “a record six of 10 non-retirees predict Social Security won’t be able to pay them benefits when they stop working.” Skepticism is highest among the youngest workers, who don’t expect to get a Social Security check when they retire. That, of course, raises the question of what eighteen-to-thirty-four-year-olds will live on, but that’s a matter for another post.
Even scarier were two revealing quotes laced through the story. Social Security expert Alicia Munnell, whose research center at Boston College studies things like the adequacy of retirement income, said that the downbeat outlook reflects “all the attacks on Social Security that we have this total crisis in the program.” The fear and distrust resulting from the financial crisis may also have made people pessimistic, Munnell said.
USA Today did not report who was making all those attacks on Social Security. If it had, then readers might have better understood the quote that followed. After the paper told readers that “well-informed or not, public attitudes could affect the debate over what to do about Social Security,” the paper quoted Maya MacGuineas, president of the Committee for a Responsible Federal Budget, who said: “It makes it easier to make some of the changes that we are inevitably going to have to make.”
Did MacGuineas mean the lack of Social Security smarts among the public? Or was it an admission that some of the PR activities of the Peter G. Peterson Foundation and its supporters in Congress have had an effect?
We can’t answer that question, but we can ask a couple of our own: Does USA Today expect its readers to know who the Committee for a Responsible Federal Budget is? Where was the ID?
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There was a good interview with Dean Baker on the subject:
http://www.democracynow.org/2010/7/19/social_security_under_attack_cuts_proposed
http://www.democracynow.org/blog/2010/7/19/part_ii_social_security_under_attack_cuts_proposed_higher_retirement_age_suggested
"BEN BERNANKE: The type of programs are not self-funded. They’re unfunded liabilities to a significant extent at this point. They are the biggest single component of spending, going forward. Now, there are various ways to address this. You can restructure entitlement programs. You can cut other things. But at some point, you need to address the overall budgetary situation. If you don’t, you’ll get a picture like this one, where interest rates are rising, interest payments are rising, because the debt outstanding is growing exponentially, and at that point, things will come apart...
AMY GOODMAN: Economist Dean Baker, your response?
DEAN BAKER: Well, this isn’t the first time Mr. Bernanke has misled Congress on something very important. You recall, he was a big factor in pushing for the TARP and fundamentally misrepresented the situation in financial markets to get Congress to approve it. But he’s done the exact same thing here again. He uses the term "entitlements" a lot. People here in Washington do that. They know better. Again, the story with Social Security, we’re all looking at the same numbers. Ben Bernanke would not, if he had him here, tell you anything other than what I just told you, that the Congressional Budget Office says the program could pay all benefits through the year 2039 with no changes whatsoever. Relatively minor changes would keep it fully solvent decades more into the future. The bigger problem is Medicare and Medicaid. But again, Mr. Bernanke knows full well, it’s not that those programs are out of control; it’s that our healthcare costs are out of control. So the real problem is that we have to fix our healthcare system. We pay more than twice as much for our healthcare per person as people do in Germany, in Italy, France, Canada, whatever country you choose to pick. If our per-person healthcare costs were the same as what they are in those countries, we would be looking at enormous budget surpluses for the indefinite future, rather than deficits. The problem is that people like Mr. Bernanke don’t want us to challenge the insurance industry, the highly paid medical specialists, the pharmaceutical companies. Instead, they’re saying cut Medicare, Medicaid for the elderly. So it’s just really a dishonest story. The issue here is healthcare. That’s what we should be talking about.
AMY GOODMAN: So, Dean Baker, what did the so-called landmark healthcare legislation do?
DEAN BAKER: It extended coverage to a lot of people that wouldn’t have had it otherwise. So, in that sense, I think it was a very good thing. It also established community rating, so that people who get sick and lose their job could still hope to get covered, because otherwise typically people, when they lose their job, no one is going to cover them if they have a serious health condition. So, in that sense, I think it was a big step forward. But in terms of covering—controlling cost, it’s really hard to see that accomplish much. We have to go back to the drawing board. And what’s really pernicious is you have all these people running around Washington saying, "Oh, we tried that. We didn’t get anywhere, so now we have to cut Social Security, we have to cut Medicare." That’s not acceptable. "
It goes on to talk about the morality of cutting this generation's guaranteed retiree benefits after their other retiree benefits were wiped out by the crash.
I don't see too many other
#1 Posted by Thimbles, CJR on Tue 3 Aug 2010 at 01:03 AM
What's happening with social security disability? I am 56 years old, and was denied applying my first time. Is this to be expected?
#2 Posted by Jack Simpson, CJR on Mon 1 Nov 2010 at 10:20 AM