Did President Bush have the right idea on Social Security reform after all?
Of course, Thursday's front-page story by Mary Williams Walsh, "Social Security To See Payout Exceed Pay-In - At Tipping Point Years Ahead of Projection," doesn't say that. She doesn't even mention the former president or his failed 2005 attempt at reform, which was fiercely attacked by Democrats and in the New York Times.
But Walsh did report that the United States is now paying "out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office."
The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.
This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.
Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.
The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program's revenue has fallen sharply, because there are fewer paychecks to tax.
Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point - the first step of a long, slow march to insolvency, unless Congress strengthens the program's finances.
Bush's Social Security reform attempt of
2005 was pictured in scary terms by Democrats and in the Times (a far cry from the paper's embrace of the necessity of health care reform). Economics reporter Edmund Andrews wrote in January 2005 that Social
Security was projected to have its cost eclipsing payroll taxes in
2018, in a story headlined, "As White House Begins Social Security
Push, Critics Claim Exaggeration."
Not only was Bush not exaggerating, he turned out to be too optimistic about the Social Security program's prospects in its current state.
You'll never guess the first culprit the Times blames for our debt problem, in a passage that somehow manages to avoid talking about the massive new spending program, Obama-care.
The United States' soaring debt - propelled by tax cuts, wars and large expenditures to help banks and the housing market - has become a hot issue as Democrats gauge their vulnerability in the coming elections. President Obama has appointed a bipartisan commission to examine the debt problem, including Social Security, and make recommendations on how to trim the nation's debt by Dec. 1, a few weeks after the midterm Congressional elections.
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