02-12-05 SSI

I'm trying to do some writing on Social Security, so I've been trudging through all the crap. It's amazing how much press can be generated from so little data. Anyway, I'll post the meat of my article later, but I just put two and two together, and wanted to share it.

Remember during the state of the union speach when the democrats started booing GWB? I remember hearing it and wondering what the heck was going on.

Here's the way that the trasncript reads:
GW: "By the year 2042, the entire system would be exhausted and bankrupt."
Dems: BOOOOOOOOO!!!!!

Now, when I had hear this on the radio, I actually though that the crowd might be booing the idea of SS going bankrupt, that they might be supporting the prez.

Not really. They are actually screaming at him as an accusation of lying.

According to Bush, the crisis is upon us, and the public needed to know. According to Democrats, that line (which they knew was coming) was one hundred percent, lip flappin', party line, bullshit. So, when the president said it to all of us in our living rooms, they decided to yell at him.

So, who's right? The prez says that SS is in serious crisis. The dems (or more vocally, their mouthpiece propiganda group, www.moveon.org, who published a full page ad in the New York Times stating in bold letters "George Bush is misleading us about Social Security" ) say it's all a bunch of crap, designed to whip up public support for privitization.

Let's review the actual sources of information for both sides.

One source of information is the Congressional Budget Office (CBO), who's recent analysis of Social Security, from January 2005, is posted here.

I quote from the 3rd paragraph:
"CBO projects that under current law Social Security outlays will first exceed revenues from payroll taxes and taxation of benefits in 2020 and that the program will exhaust the trust funds in 2052. After the trust funds are exhausted, Social Security spending cannot exceed annual revenues."

Basically, according the the CBO data, we have a nice trust fund that we're using to pull monies from to pay Social Security. In 2020, the expendatures will pass the revenues, and we'll start to tap into the trust fund. And, baring any chages in the taxation or the benifit outlays, the trust fund will last 32 years, until 2052.

The other source of information that everyone is talking about is the Social Security Trustee's Report for 2005. This is the prediction, as prepared by the Social Security Administration (who, hopefully, would know, right?)
Here are the actual lines from the Social Security Trustee's report. Find the table of contents here. I'm pulling my quote from here, in the 3rd and 4th paragraph of the text.

"Projected OASDI tax income will begin to fall short of outlays in 2018 and will be sufficient to finance only 73 percent of scheduled annual benefits by 2042, when the combined OASDI trust fund is projected to be exhausted.
Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase in payroll taxes of 15 percent or an immediate reduction in benefits of 13 percent (or some combination of the two)."

So, here are two reports. Both show that expendatures will exceed revenues, in 2018 or 2020. Both show that, baring any change in taxation or benifit distribution policies, the trust fund will be exhausted by 2042 or 2052.

Let's look at the Bush/Democrat banter again:

Bush: "By the year 2042, the entire system would be exhausted and bankrupt."
Dems: BOOOOOOOO!!!

You decide.