The 2006 Social Security Trustees Report found that the estimated year in which the program will pay out more in benefits than it receives in payroll tax revenues is still 2017 – just 11 short years from now. But the estimated year in which the program’s so-called “Trust Fund” – actually, paper IOUs Congress writes itself – will be completely exhausted is 2040, one year earlier than projected in 2005. Additionally, the 2006 report states that over the next 75- year period, the Social Security program will require another $4.6 trillion to pay all scheduled benefits. That amount is $600 billion higher than estimated last year.
Despite the certain and soon date when Social Security becomes insolvent, Senate Minority Leader Harry Reid (D-NV) stated, “Today’s report confirms that, despite White House scare tactics, Social Security remains sound for decades to come.” House Minority Leader Nancy Pelosi (D-CA) added, “The report reinforces one basic reality – in its current form, Social Security will be able to pay full benefits until 2040 and even after that will be able to pay 74 percent of benefits. This finding flatly contradicts Republican efforts to manufacture a ‘crisis’ in Social Security…”
This takes “They think we’re stupid” to a whole new level.
The congressional liberals’ media cronies are also engaged in crisis denial, and offer the same prescription they offer every ailing government program – increase taxes.
Editors of the Minneapolis Star-Tribune argued, “A modest increase in the Social Security retirement age, for example, coupled with a modest increase in the cap on taxable earnings would extend Social Security’s solvency significantly.” A New York Times editorial echoed, “Phasing in a modest package of benefit cuts and tax increases over the next several decades is the best way to ensure that the system won’t come up short a generation from now.” For media liberals, modesty – to the tune of a $4.6 trillion tax increase – is apparently the best policy.
The reasons Social Security faces a certain funding deficit are well documented. First, workers from the massive Baby Boomer generation will start retiring soon and begin to draw benefits. Second, people are living longer due to innovations in medical science and research into disease prevention. The average life expectancy in 1935, the year Social Security began, was just over 61 years, even though the retirement age was 65 years. This was another part of the scam. Though today’s average life expectancy has increased, liberals want to continue to raise the retirement age. At this rate, Social Security benefits are like a rabbit that most of us will never catch.
A third factor, and one not often discussed, is that Congress spends the surplus Social Security tax revenues every year on other government programs and discretionary “pork” projects. Members of Congress have been spending the Social Security surplus since the program was enacted, because the program was never intended to solely fund our retirement pensions.
In fact, the U.S. Supreme Court ruled in the 1960 case Flemming v. Nestor that you have no right to receive Social Security benefits, even if you paid into the system. Maybe this is the real reason Democrats do not want to face up to the problem. They duped the public 70 years ago, and they want the scam to keep on ticking like that famous bunny that keeps on going.
Senator Jim DeMint (R-SC) offered an amendment to the fiscal year 2007 budget bill that essentially pulled back the curtain on the accounting fraud Congress has perpetrated with our Social Security dollars. The DeMint amendment would have merely required that every dollar paid into the Social Security program must be used only to pay Social Security retiree and disability benefits. Unfortunately, eight Republican Senators joined forty-four Democrats and one Independent to defeat the DeMint amendment. The rhetoric that spews from liberals of both parties on protecting the Social Security surplus and ending budget deficits is as worthless as the IOUs in the “Trust Fund.”
If members of Congress are serious about preserving the Social Security program without needlessly increasing payroll taxes or reducing benefits, they must immediately take the following three steps.
First, members of Congress must stop denying Social Security faces a solvency crisis. To deny the solvency crisis is literally akin to denying that the sun rises in the east.
Second, all members of Congress must end the raid on the surplus and pass the DeMint amendment.
Third, Congress must pass HR 1776, “The Ryan-Sununu Social Security Personal Savings Guarantee and Prosperity Act.” HR 1776 would allow workers to divert a portion of their forced payroll tax contributions to a personal retirement account they own and control. In 75 years the entire system would be solvent, without having to reduce benefits or raise taxes.
The need for “new batteries” to fix our dysfunctional Social Security system is painfully obvious to those of us not in denial. But first we must have new members of Congress who have the integrity to be honest with the public and the courage to lead.