I have just one word to sum up Mr. Bush’s characterization of Social Security: dishonest:
So here is the result: Thirteen years from now, in 2018, Social Security will be paying out more than it takes in. And every year afterward will bring a new shortfall, bigger than the year before. For example, in the year 2027, the government will somehow have to come up with an extra $200 billion to keep the system afloat - and by 2033, the annual shortfall would be more than $300 billion. By the year 2042, the entire system would be exhausted and bankrupt. If steps are not taken to avert that outcome, the only solutions would be drastically higher taxes, massive new borrowing, or sudden and severe cuts in Social Security benefits or other government programs.
Point 1: Mr. Bush talks about the fact that the government is going to need to “come up with” $200 to $300 billion per year in the 2027 timeframe in order to fund Social Security. What he leaves out is that this was EXACTLY THE PLAN - workers would pay higher payroll taxes to load up the trust fund, and then the government would redeem those excess funds out of the general fund when the payroll taxes were no longer enough.
That’s a bit like saying that people who advocated letting the tax cuts sunset in a few years were going to “raise your taxes,” when in fact they were only advocating that we follow the law that Mr. Bush signed himself. Oh wait, he did that too.
Point 2: The entire system WILL NOT be “exhausted and bankrupt” in 2042. The trust fund may be empty, but payroll taxes will be enough to cover AT LEAST 70-80 percent of the benefit obligations. However, if economic growth exceeds the 1.8 percent in the current projections (almost a certainty), then the system may be able to cover promised benefits forever - as is.
Point 3: Even in the case where the trust fund runs out of money, taxes would not need to be “drastically higher,” the government would not need to engage in “massive” new borrowing, and any benefit cuts would not be “severe.” What we need are some hammers, not a wrecking ball.
