CNN co-host Tucker Carlson and The Washington Post bolstered the Bush administration's crisis rhetoric on Social Security by providing misleading accounts of the federal program's "solvency."
On the December 16 edition of CNN's Crossfire, Carlson purported to "correct" former Clinton national economic adviser Gene Sperling's statement that "Social Security does not become insolvent until 2042." Carlson responded: "In 2018, just to correct you ... that's, again, only 14 years. Benefits will overtake revenues."
In a December 17 article in The Washington Post, after noting that President Bush "said Social Security will be paying out more than it collects" by 2018, staff writer Peter Baker reported that congressional Democrats are "[c]iting different accounting than the president's" to "argue" that under the current system Social Security will "still be solvent for nearly 50 years."
In fact, Sperling is correct in noting that Social Security is projected to remain solvent until 2042, according to the same authoritative U.S. government report upon which Carlson relied: the 2004 annual report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds (OASDI). 2042 is the year that the Social Security trust fund is projected to run out; the year Carlson cited, 2018, represents the time when the program's payouts to retirees are projected to exceed tax revenue. At that time, the government will have to supplement revenues with the Social Security trust fund to meet payment obligations to retirees, but the system will not be insolvent.
The Post's Baker, on the other hand, misleadingly suggested that one's view of when Social Security becomes insolvent is a matter of partisan opinion. It is not. Bush is talking about one thing -- what is projected to happen in 2018 -- and the Democrats are talking about another -- when the system is projected to become insolvent. By conflating the two issues, Baker suggested that the Democrats are being partisan in their assertions about projected insolvency. In fact, Sperling's and the Congressional Democrats' assertions reflect, respectively, the presumably nonpartisan (though the Bush administration is well-represented) Social Security Board of Trustees and the at-least-equally nonpartisan Congressional Budget Office, which projects insolvency by 2052, rather than 2042.
From the December 16 edition of CNN's Crossfire:
SPERLING: I do believe that, even though Social Security does not become insolvent until 2042, we as a country would be better to take on the problem now.
CARLSON: In 2018, just to correct you, in 2018, which is only 14 years from now, according to the board of trustees of overseers of Social Security, that's, again, only 14 years. Benefits will overtake revenues. So that's actually pretty soon.
From Baker's December 17 Washington Post article, "Bush Lays Out a Plan to Revise the Social Security System":
Bush made clear [in the White House economic conference] that he intends to expend considerable political energy in pushing for a partial privatization of Social Security to help secure the program, which faces sizable shortfalls over the next few decades. By 2018, he said, Social Security will be paying out more than it collects, and over the long term the system faces a $10.4 trillion unfunded liability. ... Congressional Democrats dismissed the conference as a public relations exercise distorting fiscal reality. Citing different accounting than the president's, Senate Minority Leader Harry M. Reid (Nev.) and House Minority Leader Nancy Pelosi (Calif.) argued that Social Security would still be solvent for nearly 50 years.