March 27, 2002
Dean Baker
The American Prospect Online, March 27, 2002
Westminster Journal, April 25, 2002
When President Bush first described the War Against Terrorism he warned that we may never learn of some of the victories in the war. One such victory, that may have escaped public attention, occurred last Tuesday, when the Bush Administration kept the 2002 Social Security trustees report out of the hands of terrorists.
Ordinarily, the annual trustees report, which provides detailed projections on the health of the Social Security program, is released at any early morning press conference. Copies are made available to anyone who wants one. The report is also posted on the web, where the public (and terrorists), can freely download it.
Reporters usually spend the day reading and digesting the report. They also contact experts around the nation to get their assessment of the new report. Then they file their story. This information is then transmitted by radio and television, across the country and around the world, where even Al Queda terrorists in caves along the Afghan border can pick it up.
That didn’t happen this year. The Bush Administration released the report in a late afternoon press conference. It also did not make it available on the web. This meant that reporters had only a few minutes to file a story for their newspapers or television. There would be too little time to assess the report or to contact outside experts. Besides, these experts would not have seen the report in any case.
As a result the public was not likely to be well informed about the content of the new report. For example, most people are probably unaware of the fact that the new report projects that the program will be able to pay every penny of scheduled benefits until the year 2041. By that year, the oldest of the troublesome baby boom generation would be age 95, and the youngest would be age 77.
Even after the trust fund is projected to be depleted in 2041, the report shows that Social Security will still be able to pay a benefit that is more than 10 percent higher in real (inflation adjusted) dollars than what current retirees receive. In fact, the new report shows that Social Security is stronger financially that at any point in the forties, fifties, sixties, or seventies.
If the Social Security trustees had assumed that productivity would grow as fast as President Bush’s Council of Economic Advisors predicted in the most recent Economic Report of the President, the program would be fully solvent until almost 2050, with no changes whatsoever. Alternatively, if the trustees assumed that the nation would have as many immigrants in two decades, when it faces a labor shortage due to the retirement of the baby boomers, as it did in the last decade, Social Security’s future would also appear significantly brighter.
But even taking the report at face value, this was the fifth straight year that the trustees had pushed out the date when the trust fund was projected to run into trouble. Back in 1997, Social Security was projected to face a shortfall as early as 2029.
News like this could cause many people to question the need for the privatization plans put forward by President Bush’s Social Security Commission. After all, if the program appears solid long into the future, why would anyone want to dismantle it? As every pollster and politician knows, Social Security is an enormously popular program. It doesn’t make sense to fix Social Security, if it’s not broken.
The trustees report also shows that the Social Security system is far more efficient than the private accounts advocated by President Bush. The administrative costs of running private accounts — the money paid out to financial industry — would be approximately 5 percent of annual benefits, according to the Bush Commission’s own estimates. By contrast, the Social Security trustees report shows that the administrative costs of running the Social Security system are just 0.7 percent of annual benefit payments. The difference would amount to tens of billions of dollars paid from workers’ retirement savings to the financial industry.
But, tens of millions of Americans will not know these basic facts about Social Security, at least in part because of the way the Bush administration chose to release the 2002 Social Security trustees report. The administration’s strategy kept the publicity around the report to a minimum. Those who are troubled by this fact can at least rest assured that the Al Queda terrorists don’t know the truth about Social Security either.
