Social Security Does Add to the Deficit, and That’s Why It Needs to Be Reformed
Subscribe today for Free Enterprise Updates
- Latest business trends and best practices
- News about legislation and regulation impacting business
- Business how-to articles from industry experts
- Commentary and interviews with newsmakers in business and politics
You can’t fix America’s fiscal mess without reforming the programs that account for 60% of the federal budget – entitlements including Social Security and Medicare. The U.S. Chamber and other business organizations warned the White House and Members of Congress, "If we do not make sensible reforms, the programs will go bankrupt—and so will the nation."
Fixing these programs only become harder when Sen. Dick Durbin (D-IL) claims that Social Security “doesn’t add a penny to the deficit” and when White House Press Secretary Tim Carney says, “Social Security currently is not a driver of the deficit.”
These statements aren’t true, as a number of media outlets pointed out in 2011.
The Washington Post reported, “Social Security is sucking money out of the Treasury. This year, it will add a projected $46 billion to the nation’s budget problems, according to projections by system trustees.”
Some senior Democrats are claiming that Social Security does not contribute “one penny” to the federal deficit. That’s not true. The fact is, the federal government had to borrow $37 billion last year to finance Social Security, and will need to borrow more this year. The red ink is projected to total well over half a trillion dollars in the coming decade.
And on the pages of the New York Times, Alicia Munnell, a member of the Council of Economic Advisers under President Bill Clinton, wrote:
But in reality, scheduled Social Security benefits and current payroll taxes are included in long-term deficit projections by the Congressional Budget Office, the Office of Management and Budget and the Government Accountability Office. These projections matter: policymakers, investors and the bond markets use them to gauge the nation’s fiscal health. Since a shortfall in Social Security is embedded in these projections, eliminating that shortfall would substantially improve the long-term budget outlook and the nation’s creditworthiness.
Ignoring reality doesn’t get any closer to reaching a solution.
Social Security and other entitlement programs are a major burden on America’s fiscal health. They have to be reformed to reduce the deficit and debt levels while ensuring that they continue to exist for the elderly and sick.