Score another victory for the right-wing PR machine. This morning’s headline in our local newspaper screamed that America’s Social Security fund is now “cash negative.” The story came from the Washington Post, which used to be a reliable newspaper, and I am sure it was reproduced on front pages across the nation.
The story was, of course, fiction. And it has all the earmarks of a piece of propaganda planted by flacks paid to create a political climate in which the American safety net can be shredded to provide more tax breaks for corporations and the wealthy.
Social Security should be a simple concept. Introduced back in the days of FDR, it collects a “payroll tax” from working Americans and invests the proceeds in Government bonds so that when the workers retire they can count on a modest monthly stipend. The investment is backed by “the full faith and credit of the United States Government.”
Franklin Roosevelt said he decided to use a payroll tax so “no damn politician can ever scrap my Social Security program.” But that hasn’t stopped the Republicans from trying.
Politicians who want to “privatize” Social Security argue that more money is going out in Social Security checks than comes in from payroll taxes. They regard the program as some kind of Ponzi scheme, in which dividends are funded by new investments. That’s blatantly inaccurate. And it would be illegal.
The money paid out is earned from previous investments. Naturally, as the baby boomers retire, I expect the payroll taxes paid by today’s workers will not match the money going out because the boomer generation is so huge. But it’s like a boa constrictor swallowing a steer. There will be a big bulge but eventually the steer will be digested. The money collected today is not intended to meet the needs of today’s retirees. Their checks are funded by the investments they made while they were working. The payroll taxes collected today are earmarked for today’s workers when they retire.
Back in the Eighties, the National Commission on Social Security Reform investigated the program and projected that it would be solvent for the next 75 years. But that hasn’t deterred the right-wing doomsayers.
The pernicious Washington Post story was immediately refuted. Former House Aging Committee Chief of Staff Robert Weiner blasted it as “sloppy journalism.”
Weiner said the story “unnecessarily frightens seniors, distorts the national debate on the debt and is simply wrong.”
He added that the story “is endemic of a recent media trend ignoring the 1983 federal deal – a grand compromise between President Reagan and the then Democrat-controlled Congress, that saved Social Security by protecting its funds and solvency through 2037 and is routinely ignored by the media and advocates of ‘reform’ (ie cuts) today.”
Here’s an excerpt from Weiner’s rebuttal:
Social Security is like a bank that can lend its surplus to the federal government for other purposes, but doing so does not negate the bank’s obligation to make up the difference and repay its customers (Social Security recipients) under the 1983 Ronald Reagan-Tip O’Neill-Claude Pepper deal. If the feds fail to honor the 1983 Reagan-O’Neill Pepper deal, why should seniors believe any future deal?
To cut a national deficit by cutting Social Security, which does not have a deficit, is theft from seniors who have paid in. If a bank told a customer, ‘Sorry. We’ve spent your money on other items,’ would anyone accept that or say: ‘Fine, you made money on my money but you still owe me mine. Pay up.”
Pointing out the fallacy of the Post’s assertion of a cash-negative milestone, Weiner explained:
There have actually been 11 years since 1963–according to the Social Security Trustees’ own website and information–where the Trust Fund surplus has easily absorbed a temporary debt, as there is this year under the national economic crisis. Social Security has nearly three TRILLION dollars in surplus based on what seniors have paid in. This year’s $46 billion shortfall is a blip and it’s covered – sorry if other programs might have to pay what they owe.
So the Washington Post’s syndicated story has been totally debunked. But the harm was already done. That’s how propagandists employ the Big Lie – with devastating results.
This is more than “sloppy journalism,” Mr. Weiner. It is diabolical propaganda.
And it is one more example of the sinister brainwashing crusade that right-wing billionaires are funding.
The Washington Post is either complicit or negligent in printing their propaganda.