Under the headline "Social Security Races to 'Negative': Rash of Retirements Push Fund to Brink," USA Today's February 8 front page presented an alarmist view on a story that is regularly misreported in the corporate media (Extra!, 7-8/95, 1-2/05; FAIR Action Alert, 10/19/07).
Reporter Richard Wolf leads with this warning: "Social Security's annual surplus nearly evaporated in 2009 for the first time in 25 years." But several paragraphs later, readers are told that the program has been "accumulating a $2.5 trillion trust fund"--which certainly sounds less ominous than the headline's warning about being on a "brink." And by a "nearly evaporated" surplus, USA Today means that Social Security "took in only $3 billion more in taxes last year than it paid out in benefits."
The story tries to justify the alarm nonetheless by pointing out that "because the government uses the trust fund to pay for other programs, tax increases, spending cuts or new borrowing will be required to make up the difference between taxes collected and benefits owed." Two "experts" are quoted to endorse that view, Rep. Paul Ryan (R-Wisc.) and Committee for a Responsible Federal Budget's Maya MacGuineas, a former adviser to the McCain campaign.
Actually, the fact that Social Security would begin paying out more in benefits is neither alarming nor particularly surprising. In the 1980s, Social Security taxes were raised and benefits cut in the name of covering the retirement of the Baby Boomers--and, not incidentally, so that the system could loan its surplus to the Treasury Department to cover for Reagan's income tax slashing (Extra!, 1-2/88; Nation, 3/2/09). That money was to be paid back with interest, just like the U.S. Treasury's debts to China, Japan, private U.S. citizens and everyone else who owns Treasury bonds. If Social Security fails to collect the money that is owed to it by the Treasury, that would amount to a massive fraud and transfer of wealth, as trillions of dollars specifically collected to pay for workers' retirement benefits would never be used for that purpose, and instead would merely transfer the general cost of government from progressive income taxes to the regressive payroll tax (Center for Economic and Policy Research, 1/27/05).
The money borrowed from Social Security is currently scheduled to be paid back by 2037, at which point the program will have an actual deficit. But many experts have argued for years that this projected future shortfall is not a short-term crisis, and can be addressed with minor changes like eliminating the cap on taxable income, so that the wealthy would pay the same percentage of their income as middle-income and poor workers (Social Security: The Phony Crisis, 1999).
A story that presents Social Security as on the "brink," then, is giving readers a decidely skewed perspective on an important matter of public policy. As economist Dean Baker noted recently on his Beat the Press blog (2/8/10): "If nothing is ever done to change the program, the projections still show that it will be able to pay close to 80 percent of scheduled benefits. This will still provide future retirees with a benefit that is considerably larger than what current retirees receive."
If USA Today were to present these less-alarming facts, the headline might read, "Social Security Continues to Pay Benefits as Expected." That would be much less alarmist--and more accurate.
ACTION: Ask USA Today why it presented such a one-sided report on Social Security. Encourage the paper to include experts who would disagree with the notion that Social Security is in some sort of crisis.
Brent Jones, Standards Editor