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CBO Director Says Accounting Gimmicks Can’t Save Social Security

January 28, 2015

Democrats continue to claim we can fix the looming shortfall in disability insurance by raiding retirees’ Social Security trust fund. But CBO Director Doug Elmendorf poured cold water on those assurances during his testimony before the House Budget Committee yesterday. Rep. Diane Black asked the head of the nonpartisan agency whether the Democrats’ preferred answer would actually work:

Rep. Black: As a matter of fact, I’ve heard some folks just talk about if this trust fund does become defunct, that we would then just transfer money from the Old Age Survivor fund into the Social Security Disability fund. Can you tell me how that would affect both of these funds over long term?

Dir. Elmendorf: So the approach you describe has been used before, as you know. If money is moved from the Old Age Survivors Insurance trust fund into the Disability Insurance trust fund, that will extend the number of years from which the DI trust fund can pay benefits and reduce the number of years for which the OAS trust fund can pay benefits. 

Rep. Black: So that old [adage] robbing Peter to pay Paul is certainly the case here, and if something is not done to reform both of these programs, that will be all that we’re doing is robbing Peter to pay Paul until essentially there’s nothing left in either program to rob or pay?

Dir. Elmendorf: Certainly, Congresswoman, if you want to help both programs you’re not going to accomplish that by moving money around just between them.

But the real kicker was when Rep. Tom McClintock asked the director whether we could just keep kicking the can down the road:

Rep. McClintock: If we continue down the path we’re on, can today’s college students count on receiving the Social Security benefits that they’ve been promised?

Dir. Elmendorf: Um, no, Congressman.

If Director Elmendorf’s testimony tells us anything, it’s that we need a real solution, not an accounting gimmick.