Senator Burns Will Go After Social Security

Matt Singer over at Left in the West writes a very insightful piece on Social Security and its effect on our federal deficit. Senator Burns made the unfortunate statement that “what is really hurting us is the entitlements. Of course, reform is going to be needed there pretty quick, both in Social Security and Medicare.”

As he is on so many other matters, the Senator is dead wrong here, but wrong in such a way as to catch a popular wave. He is merely repeating folk wisdom, fanned by the Republican Party and right wing outfits like Heritage Foundation, that Social Security is running a deficit, and that deficit is what is driving the overall federal budget deficit.

Here are the actual numbers – what follows are the amounts that Social Security collects in excess of what it pays out in benefits, actual and projected:

•  
  • 2004     $198.7 billion
  • 2005       212.4 billion
  • 2006       225.6 billion
  • 2007       237.0 billion…
  • 2010       273.0 billion

and so on – surpluses runnning on until at least 2018, and building what is known as the Social Security Trust Fund.  The amounts listed above reduce the overall federal budget deficit - that is, if you take the amount that the government says is the deficit (2005: $412 billion) and add to it the Social Security surplus (2005: $212.4 billion), and you get the real deficit for that year (2005: $624.4 billion).

That’s pretty advanced sleight of hand.

So much for deficits – Matt also deals pretty effectively with the matter of the Social Security Trust fund, which at the end of 2005 stood at $1.7 trillion. It is theoretically set aside in the form of intergovernmental bonds to pay future benefits, and will first be tapped in the year 2018, if current projections hold. Is that Trust Fund real? Can we count on it? Matt says yes.

And former Federal Reserve Chairman Alan Greenspan also says it is real. He said that the Trust Fund is merely a legal claim on future revenue, and that if the future revenue is real, then the Trust Fund is real. But then again, what else is he going to say? That it’s a scam?

I tend to think the trust fund is only as good as the politicians behind it, and that for that reason, that it ain’t very real. Repayment of those intergovernmental bonds is mandated only by political will. It will require appropriation of funds from the discretionary (General Fund) budget, paid for by regular income taxes paid by all, including corporations and wealthy investors, as opposed to payroll tax revenues from workers that currently fund Social Security. I dont’ see that happening, but here’s a test: If your favorite politician says that Social Security is going bust in 2018, the year the Trust Fund is supposed to kick in, then he doesn’t believe in it. If he says drop-dead year is 2042 or 2052, he does.

Social Security is a complex issue, made more so by the countless voices on the right wing that want to see it ended, or at least privatized and rendered useless to all but Wall Street brokerage houses. But a general strategy of the right wing, advanced by Grover Norquist, is to “starve the beast”, that is, to on one hand run up massive deficits through military spending and tax cuts, and on the other to blame those deficits on Social Security and other entitlements, thereby creating a popular push to cut those programs, to eventually (using another Norquist expression) “to get [government] down to the size where we can drown it in the bathtub”.

Senator Burns, knowingly or not, is part of this right wing attack on our most effective anti-poverty program. Most likely, knowing the Senator, he works unknowingly.