Wednesday, March 23, 2005
Social Security: Is the fix in?
The Social Security Trustees
release their annual report today. Bush continues to push Social Security privatization even though 59%
of Americans oppose privatization, Bush-style. One of the Social Security Trustees, Thomas Saving, is already working for Progress for America
. Progress for America is one of several newly minted Social Security privatization advocacy groups.
It's looked for weeks like that Social Security privatization was an idea half way down the crapper, but Bush has kept pushing it -- and hard. With one supposedly trustee already in his pocket, what might Bush know about today's report that could help his privatization push?
By the way, this MSNBC story
on the report is awful. Check this out:
Since Social Security benefits are paid as a life-long annuity, it will make a substantial difference to the system whether people live to age 72 or to age 92
In 1955, an American woman who survived to age 65 could be expected to live, on average, another 15.6 years.
But today a woman reaching age 65 will live another 19 years. By 2045, the trustees forecast, a 65-year old woman will live, on average, another 21 years, a forecast some demographers say underestimates future increases in longevity.
What's wrong with that presentation? One, the life expectancy for Social Security recipients at age 65 was never 72. Two, the life expectancy for future Social Security recipients is not expected to be 92. According to the researchers own numbers, the figure has changed from age 80 in 1955, to 84 today, to a projected 86 in 40 years. See the difference? 92 minus 72 is a 20 year sea change. 86 minus 80 is a big "so what" shrug.
Then there's this:
How soon does the fiscal crunch come?
Sooner than you might think: in 2008, according to Comptroller General David Walker, the non-political appointee who is the government’s chief accountant.
Walker reminded Congress in testimony on March 9 that the excess cash now flowing into Social Security (about $65 billion in 2003) that is not needed to pay immediate benefits is being used to help pay for national parks, beef inspection, medical clinics for poor people, etc.
But due to an increasing number of retirees, that excess "will begin to decline in 2008, and by 2018, the cash surpluses will turn to deficits. Beginning in 2008, Social Security’s declining cash flow will begin to place increasing pressure on the rest of the budget."
In 2008, the annual Social Security surplus might begin to decline. This is the first time in history that a declining financial surplus is deemed a cash crunch. Shame on MSNBC for presenting this misleading data without explaining what it really means.