Those Pesky Facts
Perhaps the President and the Republican leadership can identify with that talking Barbie doll a few years back who said "Math is hard."
The Social Security Administration issued a new actuarial memo (pdf format) this week, examining 18 different possible changes to the system, and what effect they might have on long-term solvency. They've calculated the effects out for 75 years, which is the standard limit in their projections. And it says:
The new Republican talking-point on eliminating the cap is that it "only buys us seven years." This refers to the date when the system shifts from building up a surplus to drawing it down. However, as the SSA's figures show, that makes all the difference. The addition to the surplus during those seven years fixes the system for as far as the SSA is willing to project. The line about "only seven years" is simply more mendacity. (The motives of those using it are left as an exercise for the reader.)
To be fair, the SSA numbers suggest that the system might not be stable beyond that 75 year horizon. But there's a reason for that 75 year limit. Think of it as the "If only that darn FDR had put a tax on video games, we wouldn't be in this mess now" barrier. Problems and solutions we are unable to imagine make long term estimates unreliable. Personally, I think global warming and water shortages will be a bigger issue than the Social Security shortfall by then, but either way, I'm happy to let the voters of 2070 figure out what they want to do about it.
If the President's gonna be running around drumming up support for fixing crises 40+ years from now, how's about we get seriously on the Kyoto wagon, instead?
The Social Security Administration issued a new actuarial memo (pdf format) this week, examining 18 different possible changes to the system, and what effect they might have on long-term solvency. They've calculated the effects out for 75 years, which is the standard limit in their projections. And it says:
Three of the proposed provisions (provisions 11, 12, and 14) would result in the combined OASI and DI Trust Funds remaining solvent through the end of the 75 year period.And what are these provisions?
11. Raise payroll tax rates (for employees and employers combined) by 2.0 percentage points in 2005 and laterWhat options have the President and the Republican leadership declared to be the only things they aren't willing to consider? Raising the payroll tax rate, or lifting the cap on earnings subject to the tax. All this hoopla isn't really about fixing the solvency of the system, folks. (But you knew that, right?)
12. Raise payroll tax rates (for employees and employers combined) by 2.1 percentage points in 2020-2049 and by an additional 2.1 percentage points in 2050
14. Make all earnings subject to the payroll tax (but retain the cap for benefit calculations) beginning in 2005
The new Republican talking-point on eliminating the cap is that it "only buys us seven years." This refers to the date when the system shifts from building up a surplus to drawing it down. However, as the SSA's figures show, that makes all the difference. The addition to the surplus during those seven years fixes the system for as far as the SSA is willing to project. The line about "only seven years" is simply more mendacity. (The motives of those using it are left as an exercise for the reader.)
To be fair, the SSA numbers suggest that the system might not be stable beyond that 75 year horizon. But there's a reason for that 75 year limit. Think of it as the "If only that darn FDR had put a tax on video games, we wouldn't be in this mess now" barrier. Problems and solutions we are unable to imagine make long term estimates unreliable. Personally, I think global warming and water shortages will be a bigger issue than the Social Security shortfall by then, but either way, I'm happy to let the voters of 2070 figure out what they want to do about it.
If the President's gonna be running around drumming up support for fixing crises 40+ years from now, how's about we get seriously on the Kyoto wagon, instead?
posted by Paul at 9:07 AM |
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