Dean-

Can you substantiate that the trustees included the lie you describe?

My brief review unearthed the following passage, which may be what is referred to in the article:

"Under the intermediate assumptions, the OASDI
cost rate is projected to increase rapidly and first exceed the income rate in
2017, producing cash-flow deficits thereafter. Redemption of trust fund
assets will allow continuation of full benefit payments on a timely basis until
2041, when the trust funds are projected to become exhausted. This redemption
process will require a flow of cash from the General Fund of the Treasury.
Pressures on the Federal Budget will thus emerge well before 2041.
Even if a trust fund’s assets are exhausted, however, tax income will continue
to flow into the fund. Present tax rates are projected to be sufficient to
pay 78 percent of scheduled benefits after trust fund exhaustion in 2041 and
75 percent of scheduled benefits in 2082." [p. 16 of 235]

This passage seems unobjectionable to me. The whole story is presented, and the only claim is that the unified federal budget will face pressure well before 2041, which is basically a truism.

You may object to the article's abbreviated treatment of this, which fails to make clear the nature of the pressure, but I don't see any cause in this passage to fault the trustees.

I was not at the press conference, so it is certainly possible that the reporter fabricated the statement attributed to the trustees that "financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes."

The statement is a lie -- the program experiences no financial pressures whatsoever, as in zero, as in none, when its expenditures exceed its cost.

If the trustees made a statement implying otherwise, then that should have been the news story. If not, well, it's really bad journalism to make things up.

Dean-

Your claim is that the trustees lied, or that the reporter made things up. A considered examination suggests that neither of these is the case.

As I read the article, the source of the statement in question was the report itself (http://www.ssa.gov/OACT/TR/TR08/tr08.pdf), not the press conference.

The statement you cite does not say that the program will experience financial pressures - it only says that there will be financial pressures without specifying who or what will experience the pressure. I concede that the rest of the article makes it reasonable to ascribe this pressure to the program, but this is not explicit. I trust you will agree that trustees' actual statement - the federal budget as a whole will experience pressure as Social Security surpluses turn to deficits - is accurate.

In short, a little examination shows an explanation that is consistent with no lie on the part of the trustees, and no made-up quotes on the part of the reporter, only sloppy reporting. It would have been perfectly reasonable for you to make this criticism.

Instead, however, you have compounded this sloppy journalism, by announcing a lie without, apparently, bothering to read the article carefully or performing any fact-checking.

Before making such an accusation you owe it to your readers to do a little more research. It took me five minutes to find the report and do a few searches.

There are enough lies and stupidities out there, as you document on a daily basis, without manufacturing new ones out of misunderstandings and sloppy reading and writing. I appreciate this blog, but you damage your credibility when you go off half-cocked like this.

Steve the actuarial gap between 100% payout dropped from 1.95% of payroll to 1.70% the amount of actual payout with no action went up from 75% to 78%. This problem is fixing itself.

actually Steve I will not agree that the budget experiences stress when SS switches from surplus to deficit. That is not true.

There is a negative effect on the unified budget whenever the surplus declines from one year to the next. This is projected to begin to happen next year and continue for the next 32 years, until the trust fund is depleted. What matters is the declining surplus, crossing zero is meaningless.

If a reporter does not understand this point then he/she has no business reporting on this topic.

Please spare me the new made-up controversies Dean:

The reporter in question never claimed that the zero crossing itself is meaningful. Nor, to my knowledge, have the trustees.

Nor was it my intent to do so; all that I meant was that the transition between the current condition of surpluses and the future condition of deficits will result in pressure on the budget.

Nonetheless, I will take issue with your assertion that the zero crossing is not meaningful. The subject of this discussion is "pressure" on the budget. This is an imprecise, qualitative term and it is silly to discuss it as if it has a precise mathematical meaning.

If I give you $10,000 this year, Dean, but reduce this to $9,000 next year, do you experience 'pressure' on your household budget?

I think this could be answered either way, depending on your point of reference. In contrast, if we followed this pattern for 20 years, so that eventually you had to pay me $9,000, I think most would agree that this change - from me giving you lots of money to you giving me lots of money - could be described as putting pressure on your budget.

To Bruce, I think your point may well have a great deal of merit, but it is not at all relevant to the point I raise.

Actually, Steve, the current conservative meme, as published in articles in WSJ, the WaPo, and countless conservative blogs, is that the zero crossing is in fact a crisis... since the SS surplus in in Federal T-bonds, which is all part of the federal pot. This article's title is just part of that meme...

What makes it a lie, is that everyone knows that the federal govt is not going to default on the bonds...

And so it's not a SS crisis at all...

What you say, Jim, is entirely reasonable, and it would have been totally appropriate for Dean to make this argument.

My only point is that Dean first claimed that the trustees had lied, or that the writer of the article made something up, and that he could not substantiate either claim.

I am in substantial agreement with you, and with Dean, about the state of social security and the appropriate policies that follow from that. I just don't think that this cause is helped by making accusations that cannot be sustained.

Steve,

The accusation is absolutely right. The trustees attempted to imply (there is no ambiguity about the meaning of their words) that there is some imminent crisis facing SS, as opposed to the possibility that it will face a shortfall in 33 years, like it did in 1982.

In response to the question of whether I can prove that they said what was attributed to them, I acknowledged that I was not there. I am inclined to believe that the article accurately represented what the trustees said, since it is the same thing reported in other articles.

This means that the trustees were using their position to advance their political agenda to cut SS. This should have been the big news story. It's that simple.

Steve,

The reporter did lie.

This statement is false:

"Both programs [Medicare and Social Security - referred to in the previous paragraph] are expected to come under increasing pressure as 78 million baby boomers start retiring and drawing benefits."

The fund will come under ZERO pressure until 2041.. It is completely separate from the federal budget. There is a separate tax, affecting payroll employees. Their taxes, their program.

The Federal budget will come under pressure to repay those treasuries..

The reporter stated "Both programs will come under pressure".... Which is a lie. Unless he meant POLITICAL pressure... Which would be so completely dishonest in the context of the article as to qualify as a lie.

The trust funds accounts are perfectly in order until 2041.. They face no pressure whatsoever. Unless you decide the trust fund is just a fabrication, and federal bonds held in a fund for workers are not worth honoring. Which is the whole point.

Changes from a surplus from Social Security, to the general revenue budget having to pay interest to Social Security does have a huge impact and the pressure to raise taxes is what has all the conservatives dragging out the Social Security Bogeyman.

What I can't understand is why the published statement from Paulson leads with Social Security when he and the Trustees both acknowledge that Medicare is the bigger issue.

If you click on my name, I blogged on this yesterday, and had a good one last month on this topic, commenting on a power point presentation that I found out about on the comment pages.

The years 2017 and 2042 (or whatever) do have importance in the context of the unified budget, which is the context in which deficits are discussed in the media. But the unified budget has relevance only if it is assumed that the SS debt will be dishonored.

The unified budget, and the deficits reported under it, has no reason for existence other than as a tool to shift part of the onus of the national debt onto SS participants, and in effect to dishonor the debt to them by "reform".

Steve wrote:

"The reporter in question never claimed that the zero crossing itself is meaningful. Nor, to my knowledge, have the trustees."

Well, the reporter did say "that financial pressures will begin much sooner +when the programs begin paying out more in benefits each year than they collect in payroll taxes+"

That is a description of "the zero crossing". Or am I missing something?

You then wrote: "Nonetheless, I will take issue with your assertion that the zero crossing is not meaningful."

Your 'taking issue' only works if the "subject of this discussion is "pressure" on the budget". But it is not. It is 'zero crossing' (see above).

To use your analogy, as far as pressure on my budget is concerned there is no difference between you loaning me (not giving me) $1,000 less each year and me paying you back $1,000 more each year. I still have $1.000 less each year in my budget. And the change from me borrowing to me paying back ('zero crossing) does not change this either (though the reporter (and the trustees?) claim(s) otherwise).

Dean-

you say:

"The accusation is absolutely right. The trustees attempted to imply (there is no ambiguity about the meaning of their words) that there is some imminent crisis facing SS, as opposed to the possibility that it will face a shortfall in 33 years, like it did in 1982."

You are certain that there is no ambiguity about the meaining of their words, and yet you cannot even tell me what their words were!

I have confirmed with the reporter that the sentence that prompted your original post ("But the trustees warned that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes.") refers to a passage in the report ("Under the intermediate assumptions, the OASDI
cost rate is projected to increase rapidly and first exceed the income rate in
2017, producing cash-flow deficits thereafter. Redemption of trust fund
assets will allow continuation of full benefit payments on a timely basis until
2041, when the trust funds are projected to become exhausted. This redemption
process will require a flow of cash from the General Fund of the Treasury.
Pressures on the Federal Budget will thus emerge well before 2041.
Even if a trust fund’s assets are exhausted, however, tax income will continue
to flow into the fund. Present tax rates are projected to be sufficient to
pay 78 percent of scheduled benefits after trust fund exhaustion in 2041 and
75 percent of scheduled benefits in 2082." [p. 16 of 235]) and not to anything said in the press conference.

It appears that what happened here was like a game of telegraph where Dean ended up with a meaning that was not present in the original message.

It was obvious to me that the passage in question likely referred to the report, rather than to something said at the press conference. As I noted before, it took me only a few minutes to find the paragraph in the report that was the source of the offending sentence in the article. That you were unable or unwilling to do the same before proclaiming a lie speaks poorly of you. To paraphrase Dean: if a media critic is unable to read an article with comprehension and to find and examine the associated source material, then he has no business putting up blog posts.

Please accept my apology - I inadvertently submitted the last comment as anonymous

Steve the issue is that the farther you get from the careful language of the Reports the more dire the message being delivered. Take for example the Press Release that preceded the Reports, the numbers used are right and then are used to present the following message.
http://www.ssa.gov/pressoffice/pr/trustee08-pr.htm
"“Social Security is at a crossroads. We face enormous challenges to shore up the system,” said Michael J. Astrue, Commissioner of Social Security. “I will continue to work with President Bush, Congress and our stakeholders to develop policy solutions. I also look forward to working with the next administration, since the challenges that face the Social Security system will undoubtedly require a bipartisan and multi-year effort.”

'crossroads', 'enormous challenges', 'multi-year effort' all combine to send a message or urgency not supported by the actual numbers. And as the message radiates out it always gets more loaded. You won't find Astrue using the terms 'bankrupt' or 'broke' or implying that benefits will somehow stop with Depletion. The Google search on '2008 Social Security bankrupt' pulled up a bunch of relevant hits some from yesterday and some from the White House in 2005
http://www.whitehouse.gov/news/releases/2005/02/20050204-12.html
There is little doubt that these messages are carefully calibrated to spread a specific propaganda message to undercut confidence in Social Security as currently configured.

It may be a little strong to call that a lie, call it instead a decade long serial misrepresentation if it makes you feel better.

Steve,

the claim that: "that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes" is not true, as in, it is a lie.

Absolutely nothing will "begin" when the program pays out more in benefits than it receives in taxes. It is outrageous that anyone would make this claim to readers.

As I noted above, I did not know the source of the this assertion. I did not know whether it was based on the words of the trustees or was an invention of the reporter. Again, if it came from the trustees, the fact that they misrepresented the state of the program should have been the news story. If it was invented by the reporter, as you claim, then it is really outrageous reporting.

Btw, I could not know the origins of this misrepresentation simply by reading the report. I would need both a transcript of the press conference and also knowledge of the reporter's interaction with the trustees outside of the press conference in order to be able to determine that the reporter had not accurately presented the trustees claims.

Steve wrote, In short, a little examination shows an explanation that is consistent with no lie on the part of the trustees...

That's only true for those who incorrectly think the dictionary definition of lie is as narrow as you think it is.

Let's review:

Dean said that the trustees lied.

This claim was based on:
1) the claim reported in the article that "financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes" and
2) Dean's (correct) explanation that the programs are fully funded through (under one set of assumptions) 2041.

In fact, to the best of my knowledge, as confirmed by the reporter, this sentence
refers to the following passage in the 2008 report:

"Under the intermediate assumptions, the OASDI
cost rate is projected to increase rapidly and first exceed the income rate in
2017, producing cash-flow deficits thereafter. Redemption of trust fund
assets will allow continuation of full benefit payments on a timely basis until
2041, when the trust funds are projected to become exhausted. This redemption
process will require a flow of cash from the General Fund of the Treasury.
Pressures on the Federal Budget will thus emerge well before 2041.
Even if a trust fund’s assets are exhausted, however, tax income will continue
to flow into the fund. Present tax rates are projected to be sufficient to
pay 78 percent of scheduled benefits after trust fund exhaustion in 2041 and
75 percent of scheduled benefits in 2082." [p. 16 of 235]

This passage does not say that pressures on the programs will emerge in the next decade or so, it says that pressures on the federal budget will emerge then.

This is uncontroversial; see Dean's comments at 8:20 pm 3/25, for example.

This 'pressure' statement was rendered inthe AP article without reference to 'programs' or 'overall budget, though it would have been reasonable to infer from the rest of the article that the reference was to the programs.

There is no evidence that the specific lie that Dean claimed on the part of the trustees occurred.

The reporter is guilty, at a minimum, of imprecise writing in failing to reflect the distinction between program and budget.

Dean subsequently changed the subject to claim a new lie: the assertion that pressure on the budget would begin at the zero crossing.

Other commenters have since described a pattern of serial exaggeration or misrepresentation on the part of the administration and the trustees. I stipulate that this has occurred.

Dean protests that he could not reasonably have been expected to know what actually transpired, but I got a prompt response from the reporter, and located a transcript (by subscription) with a few minutes of work.

Where does this leave us?

Dean has shifted seamlessly from one asserted lie to another, while claiming he could not reasonably be expected to understand the circumstances of the first claimed lie.

Dean continues to suggest that it was reasonable to suggest that the reference to the trustees' claim was based on verbal comments in the press conference or outside of it, rather than to the text of the report. This suggests to me a terribly quick or unsophisticated reading of the article.

The issue I raised at the beginning of this thread is not the state of Social Security, or how it is represented by the administration. It is whether it is appropriate to trumpet a lie on the basis of such an incomplete understanding of what was actually said.

I would hope to see, in a blog focused on media criticism, a better effort to understand whether the problem is with the original source or the reporter, and a better effort to distinguish between vague or unclear statements and lies.

Based on the other comments on this thread, however, maybe that's not what the majority of readers here want to see. They seem to feel that the existence of lies or exaggerations elsewhere is sufficient to justify an unsupported accusation of a lie in this case.

I would suggest that none of us would want this standard applied to us, and that this does not help in either understanding or advocacy.

Sorry-

previous post is mine.

Steve,

just to avoid wasting anyone's time, I usually assume that reporters accurately convey the statements presented to them. You are right that this is sometimes not true. I do not have the time to verify whether or not it is true.

Ignorant question, but, I'll ask it anyway. I would appreciate an answer, if you would.

Isn't the issue, that the government has been running a deficit, basically on the back of social security, which has been in surplus? That, in effect, the free-spending Bush government has been immorally using the surplus from social security money, to fund (and offset) the deficit from other areas of government? That whole "don't touch the lockbox" thing, was abandoned early on in the Bush years?

And thus, when the taxes from social security, stop being a surplus, this will put additional stress on the rest of the government's finances, because the govt cannot steal from social security funds anymore?

I know that the right wingers then try to pull a con, a bait and switch, and say that "social security is in crisis", while really, it is the state of the budget that is in crisis - while not acknowledging that Bush and cronies have been stealing the SS money for the last 8 years.

Is this accurate?

Jihad!

From my perspective, unless SSI is allowed to draw from its trust fund (from 2017 on), then it has essentially been a slush fund for the general budget....mostly defense spending. Perhaps this was the plan since 1982, since the whole notion of 'saving up for the boomers' strikes me as ill-conceived.

BTW: 'Bill Moyers Journal' exclusive corporate funancer is Mutual of America, a retirement fund management company. His program that ran about a month ago which contained a lot of anti-SSI propaganda was probabably a wink and a nod to this 'sponser.'

IMHO, that one show was a good argument for ending all for-profit corporate sponsorship of public media.

Just imagine the amount of propaganda we get from the private media....

JC no not really.

There never was a lockbox and Bush didn't actually change anything from Clinton practice, it is just that the dollar figures are a lot bigger now. Nobody 'stole' anything, every penny ever sent to Social Security is right where it was supposed to be. The whole 'looting' narrative is a simple twist on the larger 'phony IOU' narrative. If the Special Treasuries in the Trust Fund are actual obligations backed up by the Full Faith and Credit of the United States then the only question is a financial one, how much borrowing will the General Fund have to undertake to start partially funding benefit checks out of earned interest? And will that level of borrowing require drastic offsets somewhere else? And the actual answers turn out to be 'Not that much borrowing in context of the overall budget and GDP' and 'No'.

Everything else boils down to scare tactics delivered in careful language 'Trustees' Reports' or in more hysterical language 'President's speeches'.

Vorpal "From my perspective, unless SSI is allowed to draw from its trust fund (from 2017 on), then it has essentially been a slush fund for the general budget....mostly defense spending. Perhaps this was the plan since 1982, since the whole notion of 'saving up for the boomers' strikes me as ill-conceived."

First though a minor point, it is not SSI, which is a separate program (though administered through Soc Sec), instead you can us 'SS' but more properly 'OASDI' it self an amalgam of OASI (Old Age Survivors Insurance) and DI (Disability Insurance) which are legally separate but generally reported together.

Second the Trustees are tasked with keeping a minimum of one year of Reserves. Traditionally these have taken the form of Special Treasuries but don't have to be. This Reserve is measured by something called a Trust Fund Ratio where 100 = 1 year. The Trust Fund Ratio fell under 100 in 1971 under Nixon and fell steadily until Reagan took office at which point it stood at 25 or four months of reserves. It then proceeded to go to zero with only some fancy borrowing keeping the funds out of technical default. The 1982/1983 Reform slowly put the Trust Fund back on track, but by 1988 it was only at 41 with a total balance of $110 billion, a rate of accumulation of about $25 billion/year. In context this is pretty small potatoes. By 1992 the Trust Fund finally broke 100, which is to say right where it was supposed to be.

Reagan and Bush I have much to answer for but in Social Security terms all they did was put it back on its feet.
Table VI.A3.—Historical Operations of the DI Trust Fund, Calendar Years 1957-2007 [Amounts in billions] By the way pre-funding is just as mythical as looting. The current large and growing balances are the result of the 90's economy growing right at the top of the expected range. The 1983 Commission members might have hoped for this outcome, and indeed allowed for it in their model, but it was hardly planned in any strict sense.