Social Security Bait And Switch, A Continuing Series Dean Baker is angry at the Washington Post for spreading disinformation about Social Security. Hes right, of course and its shocking that a well-known fallacy is the subject of a news analysis that purports to inform readers.
You see, the WaPo makes a big deal of the fact that Social Security is currently taking in less in payroll taxes than its paying out in benefits. Yet this means nothing, except as a favorite point used to create confusion by those who want to kill the program.
Ive written about this repeatedly in the past, but here it is again: Social Security is a program that is part of the federal budget, but is by law supported by a dedicated source of revenue. This means that there are two ways to look at the programs finances: in legal terms, or as part of the broader budget picture.
In legal terms, the program is funded not just by todays payroll taxes, but by accumulated past surpluses the trust fund. If theres a year when payroll receipts fall short of benefits, but there are still trillions of dollars in the trust fund, what happens is, precisely, nothing the program has the funds it needs to operate, without need for any Congressional action.
Alternatively, you can think about Social Security as just part of the federal budget. But in that case, its just part of the federal budget; it doesnt have either surpluses or deficits, no more than the defense budget.
Both views are valid, depending on what questions youre trying to answer.
What you cant do is insist that the trust fund is meaningless, because SS is just part of the budget, then claim that some crisis arises when receipts fall short of payments, because SS is a standalone program. Yet thats exactly what the WaPo claims.
This is what you call negative journalistic value added.