Newspaper article St Louis Post-Dispatch (MO)

David Nicklaus: Social Security Isn't Just Broke, It's Also Broken

Newspaper article St Louis Post-Dispatch (MO)

David Nicklaus: Social Security Isn't Just Broke, It's Also Broken

Article excerpt

When two groups can look at the same set of numbers and reach opposite conclusions, you know you're dealing with a hot-button issue.

Social Security may be our nation's ultimate hot button. Most working Americans pay taxes to support it, and most retired Americans are supported by it. So I shouldn't have been surprised that different sets of Washington policy wonks could read last week's financial report from the Social Security trustees in ways that were 180 degrees apart.

"Social Security has a large and growing surplus," announced Social Security Works, a group that advocates expanding Social Security benefits.

"The Social Security Trustees warn that the program is financially unsound," countered the Committee for a Responsible Federal Budget, which would like to see tax increases or benefit cuts to reduce the budget deficit.

Who's right? Through the wonders of government accounting, they both are, but when you cut away some of the mythology surrounding Social Security, the deficit-hawk group comes closer to the truth.

The notion of a surplus relies on interest income that's credited to the Social Security trust fund. The fund itself is purely an accounting entry, and saying that the government owes itself more money doesn't create any real resources to support retirees.

The most important projection in the trustees' report is that the trust fund will be depleted in 2033. If Congress does nothing, all retirees will then face a 23-percent benefit cut.

If politics were rational, we'd do something quickly to prevent such an outcome. Today's 48-year-olds, who will reach full retirement age in 2033, don't need that kind of uncertainty. Nor do older folks who would be devastated by the loss of income.

In the real world, though, 19 years leaves politicians too much wiggle room. …

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