McCain on Social Security: Confused or Dishonest?
Mark Thoma suggests McCain is confused on a few things. It seems he was against privatization before he was for it. Fine – but could he at least tell us the truth about the long-run solvency position of Social Security. In early 2005 – President Bush broke what had been his 2004 silence on this issue (wouldn’t have been prudent to campaign on this issue) and went on a nation wide campaign to push for his privatization plan. McCain joined him in Arizona and told residents of McCain’s state that the Social Security Trust Fund would be “broke” by 2041. I wrote the Senator suggesting this claim was not even remotely true. His staff was kind enough to reply with a letter that had a very accurate description of the long-run solvency issue. And it seems this letter was signed by Senator McCain. Only problem – the letter directly contradicted what the Senator told his own voters. Maybe he was confused. Or maybe he was willing to lie to residents of Arizona. I report – you decide.
Update: Over at Mark’s place, one comment gives us a link to what President Bush told this Arizona office on March 21, 2005:
You see, in 1950, there was 16 to 1 workers — 16 workers for every beneficiary paying into the system. It means each worker didn’t have much of a load to carry when it came to making sure that somebody who has retired got their benefits. Today, there are 3.3 to 1 — 3.3 workers paying into the system. Soon, there will be two workers paying in the system. More people getting greater benefits, living longer, and fewer people paying for us. That’s a problem. And it’s a problem that begins to manifest itself in 2018, when the Social Security system goes into the red. Now, let me tell you something about the Social Security system. It’s not a trust. A lot of people think, well, we’re collecting your money and we’re holding it for you, and then when you retire, we’re going to give it back to you. That’s not the way it works. We’re collecting your money, and if we’ve got money left over — in other words, if the — if there’s more money than the benefits promised to be paid in our hands, we’re spending it and leaving behind an IOU. That’s how it works. It’s called it’s a pay-as-you-go system. You pay, we go ahead and spend it. (Laughter.) In 2018, the system goes into the red, and every year thereafter if we don’t do anything, if we do not address the problem, it gets worse and worse and worse. To give you an example, in 2027, the system will be $200 billion in the red. In other words, $200 billion more to pay for the retirements promised to people like me who are living longer than coming in in payroll taxes. And it’s $300 billion about 12 years later. In other words, we’ve got a problem out there.
So much dishonesty – so little time!