WaPo likewise botches Social Security and debt

The first obligation of every thinking person is to discern what's real. The first obligation of the news media is to inform its readers, listeners, and viewers about what's real. (Which, by the way, is why one ought never append the word "News" to the word "Fox.")

The news media, even at its best, has egregiously failed Americans regarding Social Security. When it comes to that most essential of programs, most of us literally don't know what's real. (Eighteen years ago an acquaintance of mine, who thinks he's very wise, proclaimed that Social Security is broke, period. It wasn't then, and it isn't now.) Even our best news sources advance a narrative of never-explained assertions that everybody just knows (where just knowing is different from actually knowing), always skipping over crucial detail in a seeming desire to simplify the situation for a populace that can never understand it. Or maybe, as I sometimes think, the reporters themselves don't understand it either. Not that it's all that difficult.

Maybe it's just that the media wants to shoehorn Social Security into some other narrative currently commanding the public's attention, even if it doesn't really fit, and in any case stripped of necessary nuance. I complained about how NPR got it wrong during the debt ceiling debate earlier in the summer. More recently the Washington Post did it too, in a piece on the government shutdown crisis. The Post claimed that "the uncomfortable fiscal reality is that most of what is driving federal borrowing to record levels isn’t even up for discussion this week."

"The government’s biggest annual expense," said the Post, "and the main drivers of U.S. debt, are the retirement programs Medicare and Social Security."

The Post got it half right: the part about the "biggest annual expense." But half right isn't nearly good enough. I will have nothing to say here about Medicare, but it is entirely false that Social Security is a "main driver" of the debt. Social Security hasn't driven the debt at all.

Equating expense with debt is unforgivably misleading. As I wrote recently, Social Security has never added a penny to the national debt. Whether or not it ever does depends on choices we must make about its continuing finances. Those choices can't be properly considered if we don't even know what's real. In promoting an enduring mythology about Social Security and debt, the mainstream media has preempted that crucial discussion. And it has empowered political actors—some of whom are nefarious, and some of whom, who like most Americans, including reporters, are merely ignorant—who would like to severely curtail all our major social programs. Social Security is too important to be treated so mindlessly.

You can certainly imagine the roots of the false narrative. When the Treasury Department lists the top ten U.S. budgetary spending categories, Social Security tops the list. It accounts for a whopping 23 percent of all government spending. (Medicare is fourth, at 13 percent.) Although it's never explicitly laid out in the media's breezy assertions, the idea seems to be this: Social Security accounts for a huge amount of federal spending, and total federal spending is in substantial budgetary deficit, so, ergo, Social Security is a large driver of the debt.

But it just ain't so. Always omitted is the crucial point that Social Security has its own dedicated funding stream: the payroll tax. Also omitted is that the government long ago took explicit and enormously consequential steps to ensure the long term solvency of Social Security, by increasing the payroll tax to levels that were higher than was needed to cover benefit payments at the time. The intention was to grow a large Trust Fund that would contain assets sufficient to supplement the payroll tax when baby boomers eventually retired in large numbers, decades later. And it worked. It's working right now.

This was a shining example of deliberate, intelligent, foresightful government action that's hard to fathom in our present time of extreme dysfunction.

Thus, as a consequence of decisions made in the 1980s to anticipate and prepare for the retirement of the baby boomers, Social Security has actually run a very long term fiscal surplus, which accumulated year after year and decade after decade in the Trust Fund. Almost $3 trillion exists in the Trust Fund today, duly reported in the country's official accounts, as an undeniable testimony to that fiscal surplus. Driver of the debt? Don't be ridiculous.

It is true that over many years Social Security's surplus has had the effect of masking deficits in other parts of the budget. Maybe that helped create some confusion in the mainstream media and elsewhere, because there's a sense in which Social Security's finances were always lumped together, conceptually if not legally, with other government spending. Maybe the media knows full well what's going on, but doesn't want to take the trouble to explain it. Could it just be a matter of inconvenience, or even sloth?

But the citizenry needs to know: Even today, payroll tax receipts plus Trust Fund withdrawals are used to pay Social Security benefits without any borrowing whatsoever. I repeat emphatically: Social Security has never added a penny to the debt.

Social Security does indeed face future fiscal challenges that ought to be discussed and dealt with now, while we have time and space to work out a longer term strategy. One approach to ensuring Social Security is adequately funded into the future would be to increase the payroll tax, and also to increase the amount of income that's subject to it. The other approach, usually advanced from the right, would be to reduce Social Security benefits paid to retirees, but that approach is not at all inevitable, which is why we need to have the debate. We can choose to pay for what we value, and Americans generally value Social Security enormously. America's youth perhaps value it less, not least because they've been told over and over that the program will go bust before they themselves reach retirement. In that sense the myth of insolvency is insidious and noxious.

None of this can be intelligently debated if most of us, including our politicians, don't even understand how the program is financed, and what options are available to us. The media has done us all a great disservice in that regard, by framing the program as a debt problem when it isn't.

Copyright (C) 2023 James Michael Brennan, All Rights Reserved

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