We’d like to respond to readers who disliked our article on Social Security’s red ink.
We’ve received dozens of complaints and criticisms, expressing disappointment and sometimes outright anger at our finding that Social Security is in fact contributing to the federal deficit, and that some Democrats are making a false claim when they assert it doesn’t contribute "one penny." ("Democrats Deny Social Security’s Red Ink," Feb. 25.)
Readers accused us variously of being stupid, ignorant, misleading, misinformed, unfair, partisan and naive. For the second week in a row, we’ve posted a lengthy sampling of the more civil examples in our Mailbag. But we’ve received lots of others as well. One accused us of "shoddy" analysis. Another called our article "a disaster in fact-checking."
Such an emotional reaction is understandable. A program that paid more than $700 billion to 53 million people last year, and is the major source of income for most of the nation’s elderly, is bound to be a touchy subject.
But, facts are facts, however unwelcome they may be to some. And the system is running a primary deficit this year of $45 billion, as estimated by the Congressional Budget Office.
That’s the gap between what Social Security takes in in taxes, and what it pays in benefits. The system receives additional funds from the Treasury in the form of interest payments — but the Treasury has to borrow from the public to make those payments. This year, the impact on the deficit is magnified by the fact that the Treasury must also pay $85 billion more from general revenues to make up for a temporary reduction in the Social Security tax on workers’ paychecks, enacted in December.
Nevertheless, many of our readers scolded us for stating those basic facts, and for contradicting politicians who falsely claimed that Social Security is not contributing anything to the deficit.
Some said our article would be used to attack the program. One reader said it "doubtless will be used by those arguing that Social Security is (yet another) failed government program." Another simply insisted that "Social Security is in the black" (though it is not) and added: "Saying otherwise implies that Social Security is another underfunded program that is subsidized by the taxpayer."
To those readers we say, we don’t tailor our factual findings to anyone’s desired policy outcome, or take any position on what should be done. Like it or not, as we said in the article: "The red ink is projected to total well over half a trillion dollars in the coming decade," according to CBO’s projections. Mere denials won’t make that red ink go away.
Some readers argued that Social Security should not be blamed for creating the deficit, a point with which we agreed, and said so. Until recently Social Security taxes more than covered benefits, and even now that the black ink has turned red, the gap amounts to a small fraction of the $1.5 trillion deficit that CBO projects for the fiscal year that ends Sept. 30. We noted, in fact, that President Obama was closer to the mark than the red-ink deniers when he said that Social Security is "not the huge contributor" to the deficit that other entitlement programs are. But it is a contributor nonetheless.
Money in the Bank?
A few readers offered analogies to illustrate why they thought we were wrong. One reader likened the trust funds to a "savings account" with "lots of money in it," and said that if income didn’t meet expenses, "you could take money out of your savings account to pay for those extra expenses. You would not have to go to the bank and take out a loan."
But the analogy isn’t accurate. The trust funds don’t have "money" in them; they are made up of Treasury securities, which are promises to pay money that the government has already spent for other purposes. That money will now have to be repaid, plus interest, by future taxpayers — or by borrowing and adding to the deficit.
Some readers asked for corrections or clarifications of points that we had actually covered in the article. One reader asked for a "clarifying article at least mentioning the loans that the Soc Sec Trust fund has made over the past 25 years to the government."
We thought our article was clear enough on that point, but perhaps bears repeating:
FactCheck.org: Social Security has passed a tipping point. For years it generated more revenue than it consumed, holding down the overall federal deficit and allowing Congress to spend more freely for other things. But those days are gone. Rather than lessening the federal deficit, Social Security has at last — as long predicted — become a drag on the government’s overall finances.
We’re fond of quoting the late Sen. Daniel Patrick Moynihan, who often said: "Everybody is entitled to their own opinion — but not to their own facts." It’s a matter of opinion what should be done about Social Security. But it’s a fact that Social Security is now paying tens of billions more in benefits than it generates in tax revenues.