Social Security does not add to the deficit

Jason Linkins and Ryan Grim, two blog writers who bring some sanity to political discourse, have taken on the often-repeated myths about Social Security.   Nothing seems to get people quite as confused, or to give politicians quite as much opportunity to distort and mislead.

Here it is, simple and clear:

Social Security does not add to the deficit.

It does not need to be cut in order to balance the budget.

It only needs minor tweeking to keep it solvent.

Here is how Linkins and Ryan explain it: 

Social Security, by law, is not part of the congressional budget;  it does not add to the deficit. It is not a driver of long-term debt. . . .  [It] does not even have to come up during the “fiscal cliff talks” because it’s totally irrelevant to the situation and will only complicate everything needlessly. . . .

[T]he Associated Press, relying on a familiar line of reasoning, argu[es] that the program does in fact add to the deficit because the government 'spent that money on other programs, reducing the amount it had to borrow from the public, including foreign investors... In return, the Treasury Department issued special bonds to Social Security. The bonds are now valued at $2.7 trillion. They are accounted for in two Social Security trust funds, one for the retirement program and one for the disability program. The bonds pay interest like other Treasury notes and are backed by the full faith and credit of the U.S. government.' . . .

In other words, as I read it, Social Security is not the cause of increased deficit.  It is a holder of U. S. bonds, which represent its debt;  but it is simply a creditor of the U. S., just like China.  We don't blame China for our our deficit or our debt.

At a 2011 Senate hearing, two Social Security experts, a liberal and a conservative, testified -- and agreed -- that the law is "unambiguous."  It specifically states that Social Security  "shall not be counted for purposes of the congressional budget."

Further, they agreed that it is not to be considered part of the budget.   Even if you cut Social Security, it will not change the $14.3 trillion debt that we are facing.  It does not help in any way with the debt limit.   And note:  that both a liberal and a conservative expert on Social Security agreed on these statements.

Back to Linkins and Grim:

The solvency of Social Security is at risk if the following two things happen: 1) the number of recipients overwhelmingly outnumber the number of contributors and 2) American lawmakers forget how to do math.

What we popularly refer to as the “Social Security solvency crisis” refers to a large population of Americans (the “Baby Boom Generation”) entering their retirement years at a time when the number of contributors is less than ideal. Hopefully, however, someone at some point is going to remember how to solve a simple arithmetic problem, raise or remove the income caps on contributions (right now, incomes that exceed $110,100 are not subject to contributions beyond that amount), and then we will never have to worry about Social Security solvency again. . . . 

Does this make us all feel better?   It should.   Let's hope journalists and pundits will begin to confront politicians who play the Social Security card and try to scare voters into doing something stupid to mess with a program that works.

Medicare and Medicaid are another matter.   They do affect budgeting.  And it's important to keep them separate when thinking about what to cut.

Ralph