•Press Release
Statement by Dean Baker and Mark Weisbrot
October 14, 2004
Program is Not Projected to "Run Out of Money" at Any Future Date
Statement by Dean Baker and Mark Weisbrot
For Immediate Release: October 14, 2006
Contact: Debi Kar, 202-387-5080
Dean Baker, 202-332-5218
Mark Weisbrot, 202-746-7264
WASHINGTON, DC — Moderator Bob Shieffer told the candidates in last night's Presidential debate that Social Security was "running out of money." This is false.
According to the Social Security Trustees' Report, the standard source for economists as well as both the Bush Administration and Kerry Campaign, the program can pay all promised benefits without any changes at all for the next 38 years. Beyond that, it could still pay a benefit larger (in real, inflation-adjusted dollars) than beneficiaries enjoy today — indefinitely.
"It is unfortunate that what tens of millions of Americans heard about Social Security last night is an urban legend," said Mark Weisbrot, co-Director of the Center for Economic and Policy Research.
"If Social Security were a private rather than a public entity, it would actually be able to sue journalists for statements like this and win," he added.
Weisbrot is co-author, with Dean Baker, of Social Security: the Phony Crisis (2000, University of Chicago Press)
According to the non-partisan Congressional Budget Office, the program is in even better shape: it can pay all promised benefits for the next 50 years.
But even according to the official Trustees' numbers, which are universally accepted as the basis for planning, the program is more financially sound than it has been through most of its entire history. To cover any shortfall that may occur over the next 75 years would require less than the tax increases in each of the decades of the 1950s, 60s, 70s, or 80s.
Furthermore, the average wage — again, in real, inflation-adjusted dollars — is expected to be about 45 percent higher four decades from now than it is today. Therefore any additional taxes — on the order of 2 percent — that might be needed to fund retirees who are living longer would not be much of a burden for our children, as Mr. Schieffer also indicated.
Neither candidate corrected Mr. Schieffer's inaccurate description of Social Security's finances.
Dean Baker and Mark Weisbrot are co-authors of Social Security: The Phony Crisis (2000, University of Chicago Press). See www.cepr.net for more information.
