At Peter Peterson's daylong conference on the deficit, former Senator Alan Simpson, who was also the co-chair of President Obama's deficit commission, once again insisted that Social Security was not intended as a retirement program. He also insisted that the arithmetic for the program doesn't add up and that therefore there have to be major cuts.
Of course everyone involved with the establishment of Social Security understood it to be a retirement program. It's not clear what Senator Simpson has been reading that led him to think otherwise.
In terms of the arithmetic underlying the program's finances, this is performed regularly by the actuaries at Social Security. With the trustees current assumptions, the program can pay all benefits through the year 2036 and almost 80 percent of scheduled benefits for the rest of Social Security's 75-year planning period. The projected shortfall could be almost completely eliminated with the cap on the payroll tax was removed.
Put another way, if there had not been a massive upward redistribution of wage income over the last three decades, most of the current projected shortfall would not be there. This is the simple arithmetic that apparently Senator Simpson does not understand.
It is incredible that no media outlet other than Huffington Post thinks it is newsworthy that the co-chair of President Obama's deficit commission is completely uninformed about the country's most important social program. While these news outlets have been anxious to tout comments by minor administration officials that had little to with their jobs (e.g. Van Jones' pejorative reference to Republicans), they have consistently covered up Mr. Simpson's repeated demonstrations of ignorance on the finances of Social Security.