The mis-identification of Social Security's financial state appears in a front page article today. According to the latest projections from the Congressional Budget Office, the program can pay all benefits through the year 2049 with no changes whatsoever. Even after that date, it would always be able to pay beneficiaries a far higher benefit than what current retirees receive. The article later describes President Bush's effort to privatize Social Security as an effort to "tweak" the system. Under President Bush's proposal, a worker who earned roughly $100,000 a year during her working lifetime (adjusted for inflation and income growth), and retired in 2040, would see a reduction in benefits of almost 30 percent against current law. The fall in benefits would increase over time until even the highest paid workers would receive only slightly more in benefits than workers who had modest wages throughout their working years. It is misleading to describe such large-scale cuts as a "tweak" to the system. The article also includes an assertion that President Bush proposed a health care plan that "many independent experts thought could make care more affordable for poor and middle-income families." It does not identify any experts who held this view. The plan, which would break up employer pools and encourage people to get insurance as individuals, would lower the cost for healthy individuals (who have little need for health care), but would raise the cost of insurance for those with serious health problems. This article relies exclusively on economists who missed the housing bubble and were surprised by the current crisis. It would be helpful if the Post could find a broader range of economists for its sources.
--Dean Baker
