USA Today today gave Texas Governor Rick Perry about 350 words to explain his position on Social Security, which he called a “Ponzi scheme” last week in the debate between Republican presidential candidates.
The headline, “Rick Perry: I am going to be honest with the American people,” said it all, but in the negative. Mr. Perry has not been honest with the American people about Social Security and he has no intention of starting now.
Let’s begin with a discussion of “honesty of tone”: Social Security needs a few relatively easy adjustments to remain financially viable. But Perry’s tone reminds me of the boy who cried wolf or the proverbial unpatriotic soul who cries fire in a theatre when there is none. He is vociferously fearful, as if Social Security were the bubonic plague.
The truth is much less unsettling: Social Security has a temporary challenge that was created when the American public decided to have an historically large number of babies between 1946-1964, and then decided to have an historically low number of babies for the 20 years thereafter. This demographic aberration (in which the rest of the world also participated) is resulting in a temporarily smaller base of workers to support retirees. For decades, every year we collected more in Social Security taxes for the Social Security Trust Fund than we paid out in benefits. I think it was last year that we started paying out more than we took in, a situation that will continue for a while. But the large surplus in the Trust Fund means that we won’t actually enter into deficit spending from the Social Security Trust fund for another 30-50 years (depending upon whose estimates you take).
Now that’s an easy challenge, one that we have a long time to address. Thus, when Cowboy Rick talks about “the dire financial challenges” and “hard facts,” he is exaggerating the problem. I think the stridency and frequency with which he slams Social Security transforms his exaggerations into out-and-out lies.
In his short USA Today Op/Ed piece, Perry sticks to generalities, but has the space to make an enormous assumption that is tantamount to a lie: “By 2037, retirees will only get roughly 76 cents back for every dollar that is put into Social Security unless reforms are implemented.” In fact, if nothing is done, the Social Security Trust Fund will continue to pay out benefits, but do so through deficit spending (which is how we’re paying $3 trillion for two useless wars!). But if Perry has his way, reforms will reduce the amount paid out. So in fact the fear of lost benefits that Perry is raising will come true with his reform. That sounds like a lie to me.
Which does not mean I’m against reforming the system. I just don’t want to do it Perry’s way, which I believe is to gut benefits and privatize the system. I can’t really prove that’s what he believes for this OpEdge entry, however, since he has nothing about Social Security on his campaign website and his recent statements just tell us how much he hates it. His general article in USA Today says nothing about what he would do to fix the system. In fact, the piece does not contain the accusations in his book that Social Security is an illegal and unconstitutional Ponzi scheme. I would call that a lie by omission.
One more lie, only implicit in his USA Today piece, is to pretend that all Social Security taxes get paid into the general government ledger. It’s a common assumption for most of those who want to gut the system, but it’s not true: the money is paid to the Trust Fund, which loans money to the federal government. By stating otherwise, opponents to Social Security paint a far worse financial picture for Social Security, but that dark view depends entirely on the United States dead-beating its own citizens.
Perry says that he wants us to have a “frank, honest conversation.” If he were really interested in the truth, Perry would point out that we could easily solve the future Social Security problem if we took the cap off the income limit for the tax. Right now, people only pay Social Security on their first $106,800 in income. No one pays Social Security taxes on amounts they make in excess of $106,800. Remove this cap and Social Security is fully funded into the foreseeable future.
But of course that would mean taxing the well-to-do and wealthy, who currently are enjoying the lowest taxes in the history of the industrialized world. Cowboy Rick, long a friend of corporate interests and the wealthy, wouldn’t want that. And that’s no lie.