The Wall Street Journal did the standard "Social Security, Medicare, and Medicaid" trick to argue for the need to cut Social Security. As BTP readers know, the projected increase in Social Security spending is relatively modest. By contrast, Medicare and Medicaid spending are projected to soar, driven primarily by higher health care costs. This means that anyone seriously concerned about reducing the long-term deficit would focus on fixing the health care system rather than cutting Social Security. While all the experts cited in the article seem to share the WSJ's desire to see Social Security cut, the WSJ was good enough to include a chart with the article. The chart shows clearly the contrast between the projected explosion in Medicare and Medicaid costs with the modest projected increase in Social Security spending. In effect, the chart contradicts the thrust of the article. The article gets a few other important items wrong. For example, the article asserts that the Medicare drug benefits "costs almost $80 billion a year." According to the Congressional Budget Office, the benefit will cost $44 billion in the current fiscal year. Also, when discussing plans to cut Social Security benefits, it would have been appropriate to mention that the Social Security trust fund is projected by the Congressional Budget Office to be fully funded for almost 40 years. Cutting benefits in this context effectively amounts to defaulting on the bonds held by the trust fund. If the government is going to default on bonds designated to fund workers' retirements, then the public may want to consider defaulting on other government bonds as well.
--Dean Baker
