Social Security Trustees’ Report Is Out So Is CRFB’s Analysis

Social Security Trustees’

Report Is Out

So Is CRFB’s Analysis

by Dale Coberly

Look, I don’t like CRFB.  They claim to be the Committee for a Responsible Federal Budget (CRFB), but in the years I have been watching them they have looked more like the Committee to Cut Social Security.

Today my inbox presented me with a note from CRFB on this year’s Trustees Report.  As far as I can tell CRFB is telling the truth here, strictly speaking.  I will include Maya Macguineas’ statement here and some excerpts from CRFB’s “preliminary analysis”, so you can judge for yourself. Beware of wolves in sheep’s clothing.

I will add some comments of my own interlinear.

Macguineas’ statement:

Social Security and Medicare are hurdling toward insolvency, and we only have a decade to secure these programs for America’s retirees. Yet many in Washington would rather weaponize these programs than save them. 

Anyone who pledges not to touch Social Security is endorsing a 20 percent across-the-board cut in benefits. Refusal to fix Medicare means supporting major disruptions in health services. 

We don’t have much time left to save these programs from insolvency. Today’s youngest retirees will be 70 years old when Medicare’s reserves are depleted and 73 years old when the Social Security trust funds run out. Under current law, Social Security and Medicare will both be insolvent by the time today’s 56-year-olds reach the full retirement age. 

Medicare’s finances are slightly better than projected last year, while Social Security’s are slightly worse. But the underlying picture hasn’t changed – these vital programs face large and growing shortfalls that will require reducing costs, boosting revenue, or both. 

As partisans and special interests continue to demagogue Social Security and Medicare for short-term political gain, they are putting our nation’s workers and seniors at risk.  It’s time for our leaders to take their heads out of the sand and put them together to develop real and lasting solutions to save Social Security and Medicare.

My comment: yes, she said hurdles.  I’d take her statement with a huge grain of salt. She has never been interested in saving Social Security except by destroying it. And the folks “weaponizing” Social Security are her friends in Washington, not the people trying to point out that the Republicans are trying to weaken it so they can destroy it later.  Again, “pledges not to touch Social Security could mean either the R’s or the D’s, depending on who you trust, and “fix.”

in “refusal to fix” might mean “cutting it” or “paying for it” or even “finding a way to control price gouging by providers.” Other than that, I could agree with her word for word.  I’m not so sure about what’s hidden behind the words.

 What we have here is essentially a call to panic and “fix” Social Security before anyone has a chance to figure out what they mean, or that the offered fix will result in catastrophe down the road when it will be too late to fix it, if anyone even remembers the fix that destroyed it.

By insolvent, she is referring to the projected depletion of the Trust Fund.  She does not mention that raising the payroll tax about a dollar per week per year would solve the insolvency forever.

I think her calling SS insolvent when the Trust Fund is depleted is meant to stampede people into thinking there will by NO money for Social Security.  In fact, Social Security is paid for by the workers contributions which will continue even when the Trust Fund runs out of money. The Trust Fund is only a bridge to smooth the routine mismatches between income in and benefits out.  The Baby Boom is the same thing, only the mismatch was large and long.  Now there is another mismatch coming in the near future. This is due to a number of factors, the most important of which is that you will be living longer than your grandparents.  Other factors include a lower than normal birthrate, and a lower than normal increase in real wages. These are temporary problems not fundamental to the nature and purpose of Social Security. This mismatch can easily be filled by raising the payroll tax about a dollar per week each year for a few years…while wages are projected to rise by about ten dollars per week per year.

CRFB’S “preliminary analysis”:

“Under the Trustees’ projections, Social Security faces a 75-year actuarial imbalance of 3.6 percent of taxable payroll, up from 3.4 percent in the 2022 report.”

me:  again, most of what CRFB says here is strictly true, but the implications might be misleading.  i will comment as me interlinear where i think clarification may be helpful.

me:  note that this actuarial balance is what the tax increase would need to be if it were enacted all at once today. Note also that the workers’ share would amount to a tax increase of 1.8%.  This would not be noticed by most people, except for the enemies of Social Security screaming about it as if it were a life changing burden.[remember, this is money you get back with interest.  It is you saving an extra 2% of your income in order to be sure of having enough to live on when you get old or disabled

They also like to say, that the 1.8% would “only” see us through the next 75 years. After that “A substantial increase” would be needed.  They call this “kicking the can down the road.”  The “substantial” increase would be about another 1%.  I think we can safely leave that for the people who will be living seventy five years from now to decide for themselves.  And, if I may repeat . . . raising the payroll tax one tenth of one percent . . . about a dollar per week per year today, and for a few years only, would make Social Security solvent forever . . . no need to kick the can down the road.


Under the Trustees’ official projections, Medicare HI faces a 75-year actuarial imbalance of 0.62 percent of taxable payroll, which is  lower than the 0.70 shortfall estimated in the 2022 report. Under the Medicare Actuary’s illustrative alternative projections, the HI shortfall would be 1.46 percent of payroll.”

me: note again 0.62% of payroll is not a huge increase to pay for the medical care you may need when you get old.  I don’t know how this would be distributed between workers, employers, and high income workers, but I would prefer it be paid by the workers themselves up to a reasonable cap, first to be fair, even to the rich, and to stop the emplyers from claiming it’s a “jobs killing tax.”  i know there is some opposition to this from progressives who think that workers should never have to pay for their own needs.  I would hope that workers could successfully demand a pay raise to cover both the needed increase in Social Security and in Medicare . . . so all those economists could rest who claim the employer would pay the workers the employer’s share if only they didn’t have to pay the tax.

i think the “alternative projections ”must be the Trustees’ “high cost” projections which they state are “not likely.”


Overall Medicare costs have already grown from 2.2 percent of Gross Domestic Product (GDP) in 2000 to 3.7 percent of GDP today. The Trustees project costs will continue to grow to 6.0 percent of GDP by the late 2040s, and costs will remain at about that level thereafter.”

me:  6% of GDP is not a huge cost to provide for medical care for 25% of the population.  This is less than that same population would pay through private insurance, and it is guaranteed. It won’t be taken away from them by sleight of hand “not covered” fine print, or the inability of older people to pay the much higher premiums charged to older people . . . who may no longer have the income to pay for them. “The young” need to have this feature explained to them.  Paying a little more while they are young and have the money can save a lot of destitution and despair when they are old.  They will pay into Medicare in today’s money at today’s prices, while taking out in tomorrow’s money at tomorrow’s prices, This is how pay-as-you-go works.  It looks to some like “the young paying for the old.”  But it is really the young paying for themselves in advance today and reaping about three times as much in “interest” later when they need it most.

CRFB mentions “alternative projections” again.  Possible, but not likely. If “possible” becomes “likely” we can always adjust the amount we save via the payroll tax.  Not fun, but then neither is destitution.  And try to remember  that all generations  suffer from their own particular bad luck…depressions, inflation, wars, the draft  We have no reason to cry “it’s so unfair” if we suffer some bad luck in our turn.  But it is more likely that if we pay for retirement and health care in advance we will avoid the worst of the bad luck we might have had.

Don’t let them stampede you into letting them destroy your Social Security.