White House budget director Jack Lew writes some pretty strong stuff, just as the administration prepares to scuffle with the GOP over Social Security.
“Social Security does not cause our deficits,” he writes in a USA Today op-ed. “According to the most recent report of the independent Social Security Trustees, the trust fund is currently in surplus and growing. Even though Social Security began collecting less in taxes than it paid in benefits in 2010, the trust fund will continue to accrue interest and grow until 2025, and will have adequate resources to pay full benefits for the next 26 years.”
This is a strangely rare acknowledgment from the administration — and really from any person of influence in government. But it’s true. And it’s the crux of the progressive argument against the consensus view in Washington that Social Security is in trouble and must be cut.
Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries.
When more taxes are collected than are needed to pay benefits, funds are converted to Treasury bonds — backed with the full faith and credit of the U.S. government — and are held in reserve for when revenue collected is not enough to pay the benefits due. We have just as much obligation to pay back those bonds with interest as we do to any other bondholders. The trust fund is the backbone of an important compact: that a lifetime of work will ensure dignity in retirement.
There’s one head-scratcher, though: Lew writes that “Strengthening Social Security is an important, but parallel, issue that needs to be addressed as quickly as possible. But let’s not confuse it as either the cause of or a solution to our short-term fiscal problems.”
Strengthening could mean anything — including benefit cuts. And it’s peculiar to conclude that this “strengthening” needs to occur quickly, just a few paragraphs after acknowledging that the program “will have adequate resources to pay full benefits for the next 26 years.”
The op-ed comes a few days after House Republicans announced that their forthcoming budget will address Social Security.
