The New York Times had something of a scare-mongering front-page article on Social Security the other day. The new reason for concern, the Times suggested, is that payout is expected to exceed pay-in this year. But as Dean Baker pointed out on his Beat the Press blog, "this fact makes absolutely no difference for the program since it holds more than $2.5 trillion in government bonds." Dean goes on:
In spite of the statements by the experts cited in the article, the second paragraph told readers that this event marked: "an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office." Nothing in the article or in the structure of the program suggests that there is any importance whatsoever to this threshold.
Read the full post, in which Dean responds to challenges from commenters.
Meanwhile, the Times included a discussion of Social Security in its online feature, Room for Debate, albeit under the question-begging headline "Simple Steps to Fix Social Security"; the Times seems to welcome debate among experts on Social Security, as long as they agree that it is broken!
Economist Teresa Ghilarducci, who has written about pensions for Dollars & Sense ("When Bad Things Happen to Good Pensions," from our May/June 2005 issue), didn't take the Times' bait. The headline to her contribution to the debate states simply that "The Program Isn't Broken." The adjustment she recommends is the same one John Millerrecommended in our March/April 2008 issue (Go Ahead and Lift the Cap), which is to raise the cap on taxable earnings from 85% to 100%:
Gradually increase the taxable earnings base from 85 percent of earnings to 100 percent.
Well done, Teresa.
More on the coming drumbeat to mess with Social Security over at AlterNet: Alan Greenspan and the New York Times Are Gunning for Your Social Security, by Zach Carter.
For more background, see Ellen Frank, John Miller, and Doug Orr on Social Security in the D&S archives.