The Social Security Board of Trustees released its 2019 report to Congress in April. Right now, the average annual Social Security benefit is about $16,000. The new Trustees Report confirms that expanding vs. cutting Social Security’s modest benefits is a question of values and choice, not affordability.
What the report actually says:
- Social Security has a large surplus―projected to reach roughly $2.9 trillion next year;
- Social Security continues to be extremely affordable with less than one penny of every dollar spent on administrative costs (this is a fraction of what other industrialized countries pay for similar programs);
- Social Security can pay out ALL benefits owed for the next 16 years―until 2035―at which point it can still pay 80% of benefits owed.
Well, Forbes magazine of all things, predicted exactly what happened—the news coverage of the report would completely misrepresent the contents:
PBS—”Despite the lack of big short-term changes, both Medicare and Social Security remain on unaffordable financial paths that will without serious reforms soak up ever-larger shares of government spending.”
CNBC—”The report shows the Social Security Trust Fund projected to be depleted in 2035.”
CBS News—”Social Security is on a path to become insolvent in 2035, with only enough money cover about 80 percent of its obligations.”
Fox News—”Social Security Shortfall . Social Security is slated to run dry in 2035, faces shakey fiscal future.”
Here is Forbes’ (a business magazine!) explanation of why this happens:
“Thanks to decades of a billionaire-funded campaign to undermine confidence in Social Security, the Trustees Report will likely be greeted with cries that Social Security is going broke. The truth is that Social Security is in strong financial shape.
Report shows that Social Security has an accumulated surplus of roughly $2.9 trillion. It further shows that at the end of the century, it will cost just 6.07% of GDP. That is considerably lower, as a percentage of GDP, than what is spent today by Germany, Austria, France and most other industrialized countries on their retirement, survivors and disability programs.
That brings us to the second misreporting we are likely to see. Along with that modest, unsurprising shortfall being the cause for breathless media reports about supposed collapse, the report will be greeted, again if past experience repeats, with lamentations from many observers that Congress has no plan to address Social Security’s projected shortfall. That is incorrect.
Democrats have specific concrete plans that they stand behind. They plan not just to ensure that all promised benefits will be paid in full and on time for the foreseeable future, but to address our nation’s retirement income crisis by increasing Social Security’s modest benefits.
It is only Congressional Republicans who have no plans —except cutting benefits and turning the program over to private businesses.”
So don’t be fooled.
Mary Jo Dolis is the pen name of a committed skeptic.