December 03, 2012
The Post neglected to point out that Senator Lindsey Graham, a Republican often cited on budget issues, is apparently badly confused about the basics of the budget. A Post piece quoted Graham as saying:
“This offer doesn’t remotely deal with entitlement reform in a way to save Medicare, Medicaid and Social Security from imminent bankruptcy.”
This statement is absurd on its face. Medicaid is paid out of general revenue, it makes no more sense to say that Medicaid faces bankruptcy than to say that the Commerce Department faces bankruptcy. While the same is true of Medicare Part B and Part D, the Hospital Insurance portion of the program (Part A) is funded by a trust fund with a designated revenue source that is first projected to face a shortfall in 2024. If the projections prove correct, at that point it would lack sufficient revenue to pay full benefits.
While this would be a problem, it is worth noting that, contrary to the criticisms made by Graham in the piece, President Obama’s reforms have extended the projected solvency of the program from 2016 to 2024. They have also eliminated more than two-thirds of the projected 75-year shortfall.
In the case of Social Security, the projections from the Congressional Budget Office show that the program can pay all scheduled benefits through the year 2035 with no changes whatsoever. Even after that date it would be able to pay close to 80 percent of scheduled benefits for the rest of the century, leaving future beneficiaries with benefits that considerably exceed those of current retirees.
The Post should have pointed out that what Graham asserted was nonsense, since many readers may not have recognized this fact. Actually, this astounding gaffe should have been the focus of the piece, since Graham is often treated by the media as an expert on the budget. It is probably worth noting that Graham typically presents views on the budget that are similar to the Post’s editors.
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