The Washington Post has printed any number of editorials and columns that are hostile to Social Security. That is of course its right, although its unwillingness to open its pages to dissenting opinions doesn't speak well for its integrity as a newspaper. However, it is another step altogether to deliberately misrepresent the state of the program to advance its agenda. This is what columnist Allan Sloan has sought to do today in arguing that the Social Security trust fund does not exist and therefore the program will face problems in 2017 when the trustees project that it will first have to rely on interest from the trust fund to pay benefits. Mr. Sloan told readers that this would pose a major crisis for the program. The reality is that the trust fund is projected to hold more than $3.5 trillion in government bonds in 2017, so there should not be any problem meeting benefit payments. Mr. Sloan calls the bonds held by the trust fund "IOUs," which they are, just like any other bond. However business columnists usually don't refer to IBM IOUs or Exxon IOUs, so presumably this is Mr. Sloan's way of saying that he doesn't like the bonds held by the trust fund. Of course what Mr. Sloan likes or doesn't like really doesn't matter. Under the law, these bonds are assets of the Social Security trust. It is completely dishonest to imply otherwise. So under current law, Social Security has full access to these bonds and can meet all projected payments through the year 2041 according to President Bush's Social Security trustees, and through the year 2046 according to the projections of the non-partisan Congressional Budget Office. (Btw, Medicare is currently being funded in part by the same sort of IOUs held by the Social Security trust fund. This has not even been raised as an issue.) Of course, if there were enough people like Mr. Sloan, Congress could vote to change the law and effectively default on the bonds held by the trust fund. (This doesn't seem likely, since the percentage of voters who are receiving Social Security will soar in the next decade.) Since the bonds are supposed to be repaid out of general revenue, which comes overwhelmingly from progressive individual and corporate income taxes, this default would amount to a massive upward redistribution of wealth. It would transfer more than $1 trillion from the bottom 80 percent of the population to the richest 5 percent, with the bulk of this money going to the richest 1 percent. If a Post columnist had written a column that was equally misleading about a private company, both the columnist and the Post would likely be sued for libel if they did not print a prompt retraction. However, because Social Security is a government program, it is possible to lie about it with impunity.
--Dean Baker
