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Democrats’ Denial over Social Security

November 27, 2012

Yesterday, the White House joined a chorus of leading Democrats who refuse to reform Social Security and protect benefits for future generations, claiming that it is currently “not a driver of the deficit.”  Senate Whip Dick Durbin (D-IL) today echoed this position saying we ought to put entitlement reform off for another time and repeating his claim that Social Security “doesn’t add a penny to the deficit.”

Unfortunately for Democrats, that is not true.  As multiple fact checks and articles have noted, Social Security is in the red, and projections are only getting worse.  The question is: When will the President choose to lead and put Social Security on the road to solvency?

Washington Post: “Such statements have not been true since at least 2009, when the cost of monthly checks regularly began to exceed payroll tax collections. “Social Security has passed a tipping point.  For years it generated more revenue than it consumed, holding down the overall federal deficit and allowing Congress to spend more freely for other things.  But those days are gone.  Rather than lessening the federal deficit, Social Security has at last — as long predicted — become a drag on the government’s overall finances.

Member of the Council of Economic Advisers under President Bill Clinton, Alicia Munnell: “But in reality, scheduled Social Security benefits and current payroll taxes are included in long-term deficit projections by the Congressional Budget Office, the Office of Management and Budget and the Government Accountability Office. These projections matter: policymakers, investors and the bond markets use them to gauge the nation’s fiscal health.  Since a shortfall in Social Security is embedded in these projections, eliminating that shortfall would substantially improve the long-term budget outlook and the nation’s creditworthiness.”

AP Fact Check: “Social Security’s shortfalls are adding to the federal budget deficit, in a roundabout way.  One big reason: The rest of the government has been running such huge deficits over the years that it has spent all of the surpluses accumulated by Social Security.”

CBO Deficit Projections: