Friday, May 31, 2013

Another one bites the dust

Republicans have a penchant for lying in order to get their way.  One of their biggest lies – that Social Security is going broke – was dealt a blow by the latest Social Security trustees report which found that the program will be able to pay every benefit from tax money coming in until 2033 – and after 2033, if Congress does nothing, there is enough in reserve to pay three-quarters of future benefits for a long time.

The report is basically the same as last year. Social Security is fine for the next twenty years. The report also contained good news for Medicare, as it is now projected to be solvent until 2026. In a statement, Senator Bernie Sanders stressed that these findings confirmed what the reality based political world already knew. Senator Sanders said, “The report from the Social Security trustees confirms what many of us have known, that Social Security is not ‘going broke,’ that it can pay every benefit owed to every eligible American for the next 20 years and that after 2033 there is enough in reserve to pay three-quarters of future benefits.”

Republicans have been claiming that Social Security is going broke for years in order to justify the privatization of the program. The right has also argued that Medicare needs to be replaced with a voucher system because it is going broke. It turns out that both of these claims are absurdly false. While this report is bad news for those Republicans who are trying to sell privatization, it is also bad news for President Obama. The president has made the argument in the past that cost of living adjustments need to be cut by moving to a chained CPI. Today’s report illustrates that there is no need for impulsive steps in the name of getting a deal on entitlements.  The program simply needs tweaking, such as raising the ceiling on how much income can be taxed.

Do not get me wrong, Medicare and Social Security both have revenue problems, but these problems are not imminent. There is still a long term systemic problem looming. Some action will have to be taken in order to shore up the two beloved programs. However, there is a huge difference between tweaking the programs and what Republicans want to do, privatize both programs. Contrary to what Republicans have been saying, there is no need to gut and privatize the programs. Social Security is not going broke, and Medicare is not in immediate danger.

There is one simple solution out there that could keep Social Security strong for decades to come. The cap on the payroll tax should be raised or eliminated so that the wealthy are paying more into the Social Security Trust Fund. As long as millionaires and billionaires continue to pay payroll tax only on only the first $113,700 that they earn, Social Security will always be just a decade or two away from crisis.  Let's raise the cap to $250,000.

Senate Democrats are on the record as opposing any cuts to Social Security.  Today’s report should strengthen their resolve. This has not stopped Republicans from trying to spin the report by exaggerating the potential future problems, but their cries of “we must privatize and put the money with Wall Street” have been largely discredited.

Republicans lie, but the numbers do not. Social Security is not going broke.