The costs of Social Security
Glenn Kessler was too lenient in his Dec. 2 Fact Checker column on Social Security [“Democrats’ sleight of hand on Social Security, deficit”]. Statements that Social Security does not add to the federal deficit are unequivocally incorrect.
In 2012, Social Security adds roughly $165 billion to the deficit as its benefit expenditures exceed its tax income by that amount. This gap is filled entirely by revenue that the federal government borrows.
Social Security is indeed financed from separate trust funds, but these receive revenue from several sources, including borrowed money. There is understandable confusion about the interest payments the trust funds receive from the general fund, which add to the federal deficit. But there ought to be no confusion about the roughly $220 billion in additional debt purposefully issued to Social Security from general revenues in 2011 and 2012. These transfers accompanied a payroll tax cut and were deficit-financed by design. They represent a deliberate policy decision by federal lawmakers to borrow to permit Social Security to pay benefits well beyond those that could be financed from participant contributions.
Charles P. Blahous III, Rockville
The writer is a member of the Social Security board of trustees.
The Fact Checkertook issue with the statement of Senate Majority Whip Richard J. Durbin (D-Ill.) that “Social Security has not added one penny to the deficit” and awarded him one Pinocchio for departing from the complete truth.
The Fact Checker has set forth clearly the facts of the issue but, possibly because he is trying to be “fair” to all concerned, has wrongly judged Durbin to be other than absolutely correct. Imagine that Social Security had deposited its surpluses over the years into an interest-bearing account in a bank, rather than into Treasury securities. If one year the bank, because of inadequate reserves and losses on other transactions, experienced a deficit, would any rational person claim that Social Security was responsible for even a penny of that deficit?
As Durbin also noted, this does not take away from the need in the longer term to deal with actuarial and demographic issues in the financing of Social Security. But these issues are entirely separate from the current funding of Social Security, and it is difficult to understand why the Fact Checker introduced them.
Alexander H. Flax, Potomac