The Washington Post has long been a strong proponent of reducing Social Security benefits. While it frequently expresses this view in editorials and in the opeds it chooses to publish, it also pushes its editorial position in the news section. In keeping with this practice, it headlined an article today, "Recession Puts a Major Strain On Social Security Trust Fund." The article refers to the fact that the Congressional Budget Office (CBO) now projects that annual tax revenue will be nearly in balance with benefit payments for the next several years. Previous projections had shown large surpluses. While those seeking to cut Social Security benefits are highlighting these new projections, in reality they have very little significance for the program. Under the law, Social Security benefits are paid out of its trust fund. This trust fund has accumulated a surplus of almost $2.5 trillion. The lower projected surpluses for the next few years will have some impact (if the projections prove correct) on the date at which the fund is projected to be depleted, but the projected depletion date will almost certainly be beyond 2040, even after CBO adjusts its numbers for the downturn. Remarkably, this piece alludes to plans to cut benefits without ever noting that older workers and retirees have just lost close to $15 trillion in wealth due to the collapse of the housing bubble and the plunge in the stock market Presumably this would be an important factor in any debate over reducing benefits.
--Dean Baker
