A Wall Street Journal editorial hid the relative health of Social Security, in order to argue that immediate cuts to the program should be part of any deficit reduction deal. In fact, economists say that Social Security is not a major driver of deficits. Unfortunately, mainstream media have not reported this fact, which has given the Journal cover to push for Social Security cuts.
Nobel Prize winning economist Paul Krugman has pointed out: "While the United States does have a long-run budget problem, Social Security is not a major factor in that problem." Social Security does face a shortfall between the revenue the program receives and the estimated benefits it will pay out beginning in 2034. But Center for Budget and Policy Priorities economist Kathy Ruffing has also noted that, far from being in crisis, Social Security's shortfall over the next 75 years would be almost completely restored by letting the Bush tax cuts expire for the wealthiest Americans.
Furthermore, the Congressional Budget Office has said that Social Security spending, which amounted to 4.69 percent of Gross Domestic Product, will rise only to 6.63 percent of GDP by 2086 if the program pays out full benefits. These facts have led economist Dean Baker to conclude that with regards to Social Security that "there is no plausible story in which our children or grandchildren will have to worry that there won't be anything there for them."
Nevertheless, the Wall Street Journal editorial board demanded that Democrats make immediate cuts to Social Security as the price for any deficit deal that raises federal revenues:
President Obama's re-election means that taxes for upper-income earners are going up one way or another. The Bush rates expire on December 31 unless Mr. Obama signs an extension, and he shows no inclination to do so except for anyone earning less than $250,000 a year ($200,000 if you're single). The question is how Republicans should handle this reality while staying true to their principles and doing the least harm to the economy.
Speaker John Boehner deserves some leeway to try to mitigate the damage by negotiating a larger tax reform.
All the more so if Mr. Boehner can also get Mr. Obama to agree to significant spending and entitlement reform. This means more than the usual suspects of cuts to doctors and hospitals and means-testing benefits for the affluent.
It means reforms -- dotted-line commitments, not promises -- that immediately reduce Medicare and Social Security liabilities, that terminate some discretionary programs, and that rein in such scandals as runaway Social Security disability payments.
Unfortunately, the Journal is not the only media outlet hiding the relative health of the Social Security program.
A November 25 Washington Post article on progressive resistance to conservative demands for Social Security cuts falsely claimed that Social Security's costs are "skyrocketing" and "fast-growing." In addition, a New York Times article reported that Republicans were pushing for Social Security cuts to restrain the deficit while the White House said the program "is not currently a driver of the deficit," but made no attempt to ascertain whether Republicans or the White House were correct.
And the Post and Times misleading reporting on Social Security provided the Journal cover to push for major cuts to the program.