The other night CBS Evening News brought forth another gloom and doom story about Social Security. Like others from the network that have come to CJR’s attention, this one sent a similar message: Social Security is in big trouble, a debatable point. And like those other stories, this one mis-characterizes the system and omits important context that leaves viewers at the mercy of political elites who are shaping the acceptable fixes for the program.
After introducing the attention-grabbing anecdote—around one John Altobello, a kitchen remodeler in New Orleans, who believes the system is deeply troubled—the report dives right in to the oft-repeated canard about the declining ratio of workers to retirees as the culprit-in-chief for Social Security’s impending shortfall. CBS reported that in 1945, 42 workers paid into the system for every retiree. By 2033, there will be fewer than two. “Social Security could fall 25 cents short for every dollar it owes in benefits,” viewers learned. Scary stuff indeed!
CBS apparently missed the warning that Social Security Commissioner Michael Astrue gave the press last spring, cautioning them on how to describe Social Security’s financial condition, and noting that though the system will eventually need a fiscal re-adjustment, the system is OK for the next 21 years. “After 2033—even if Congress does nothing—there will still be sufficient assets to pay about 75 percent of the current level of benefits. That’s not acceptable, but it’s still a fact that there will still be sufficient assets there,” Astrue told reporters.
CBS also missed the chance to offer viewers a clear—and accurate—picture of what the declining worker ratio actually means. For the last 40 years or so the ratio of workers to retirees has been about three to one, explained Nancy Altman, co-director of the advocacy group Social Security Works. “Actuaries and all experts understood that, with the aging of the baby boom and increases in longevity, the ratio would start to decline, and that was taken into account.”
Social Security faces an eminently avoidable long-range funding shortfall, not an inevitable collapse brought about by unmanageable changes in the historic ratio of workers to beneficiaries. Those who advance that argument are using an accurate statistic to make a highly inaccurate charge.Instead of discussing all this, CBS relied on the kitchen remodeler from New Orleans to advance its narrative about the program’s money troubles. Altobello, we learned, has so much money saved for retirement he doesn’t have to count on Social Security. “All indications are it’s going to run out of money,” he said. “Maybe not in the near future but it’s coming up fairly close. In my retirement, in my lifetime, it’ll end.” Really? Maybe CBS thinks Altobello knows something the Social Security commissioner doesn’t.
Altobello also told us that he worries that his sons and younger workers will never see a nickel, a popular view among the public—partly due to poor journalism on the topic.
CBS correspondent Mark Strassman had the last word: “The federal retirement program must change,” he opined. “Though no one can be sure exactly how to make it rock solid.” No one? Different prescriptions are intensely political these days. Some say Social Security’s future shortfall is fairly easily fixed, with a small tax adjustment—lifting the amount of wages subject to the payroll tax, currently $110,100. Others, depending on ideology, think benefits are too generous, that they should go only to the poorest Americans, or that they should reflect stock market returns.
That’s a political and moral discussion, one the nation needs to have, and it’s all the more reason for CBS to do its homework before putting its segments together.
This is a list of articles on the subject of entitlement reform that Trudy Lieberman has written for CJR, in reverse chronological order.