The Social Security Board of Trustees has just released its annual report to Congress. The most important takeaways are that Social Security has a large and growing surplus, and its future cost is fully affordable.
It is sometimes reported that Social Security's current costs exceed its revenue, but if that happened, we wouldn't need a report to tell us. The whole country would know, because 59 million beneficiaries would not get their earned benefits as they now do every month. By law, Social Security can only pay benefits if it has sufficient revenue to cover every penny of costs - administrative as well as benefit costs. The claim that Social Security is running a deficit counts only Social Security's income from its premiums, often called payroll contributions or taxes, and disregards one or both of its other two dedicated sources of income: investment income and dedicated income tax revenue. As Figure 1 shows, when income from all of Social Security's revenue sources is counted, Social Security ran a surplus in 2014.
Lindsey Graham(R-SC) not only became the latest Republican to jump into the 2016 presidential race, he also became the latest Republican to signal strong support for deep Social Security cuts.
"Washington's failure to do the hard but right thing has put Social Security and Medicare in jeopardy," Graham said during his speech on Monday. "As my generation retires both programs are on track to go bust. We're living longer and fewer workers are supporting more retirees. That's unsustainable, everybody knows it, but not everybody will admit it. We have to fix entitlement programs to make sure people who need the benefits the most receive them. That's going to require determined presidential leadership."
The claim that either the old-age or disability trust funds has run dry is 'one of the hoariest lies in the conservatives' playbook.'
Republican opposition to a plan that would shore up a critical government safety-net program amounts to a new front in the GOP's class war and could equal a "death sentence" for many poor recipients, defenders of Social Security said this week.
Advocacy groups vow to fight back against what they believe is a preliminary "stealth attack" that portends a wider assault on a program that makes survival possible for millions of vulnerable Americans
As Los Angeles Times columnist Michael Hiltzik immediately remarked: "Well, that didn't take long."
It is a popular sport in policy circles to complain that the government spends so much more on seniors that it spends on kids. The gap between spending on seniors and spending on kids comes from taking average Social Security and Medicare benefits, along with some other programs, and showing that is vastly exceeds what we spend on kids. (The calculation usually leaves out state and local expenditures, which accounts for the bulk of education spending.)