Truth on Social Security is somewhere in the middle

WASHINGTON -- I have put off now for about five months doing a column on Social Security, but I can't stand it anymore.

Precious fuel has been burned to transport the president and his Cabinet on the one hand, and Democratic senators and interest groups on the other, into Kiwanis Clubs and Knights of Columbus meetings all over the country. There is not even agreement on whether the Social Security trust fund even exists, let alone how much is left in it or when it will run out.

This Social Security debate so far has been little but smoke. Is this once again the fault of the country's favorite target of opportunity, the ladies and gentlemen of the press?

A think tank called the Center for Economic and Policy Research has issued a blistering indictment of us all for "sloppy, careless reporting on Social Security." It said if we reported the story right, Americans would know Social Security is financially stronger than it has been throughout most of its 70-year history and the whole shortfall over the next 75 years will be less than what we fixed in each of the decades of the '50s, '60s and '80s.

In fact, the center predicted that 50 years from now, the average real wage will be more than 70 percent higher than today (so workers won't be hurting if they have to pay a little bit more to Social Security).

Now, hold on a minute.

Was the press sloppy and careless in overlooking this? Or were we trying to get out the story, not just the part that this particular research center believes in?

A highly respected fiscal watchdog, the Concord Coalition, will draw you another picture altogether about Social Security.

The coalition argues that there is no trust fund as such and Social Security will have to be paid out of taxes on the earnings of future workers. How can we say that this trust fund will do fine when it may just be a myth?

"The onslaught of baby boomer retirees . . . will drive the program's cost from 4.3 percent of the economy (gross domestic product) today to 6.3 percent by 2035 -- an increase of nearly 50 percent by the time today's 30-year-olds begin drawing benefits," says the latest Concord bulletin, titled "No Free Lunch."

Unless benefits are cut, higher taxes or more public borrowing will be necessary, says Concord.

The existence of a trust fund "credited with a dedicated stream of federal taxation gives the illusion of a distinct entity accumulating resources to pay for benefits, now and in the future," the Coalition said.

"The fact is that the trust fund is simply a label given to a governmental account. Like all other government activities, the cost of Social Security is financed with a tax that is deposited in the U.S. Treasury, and any excess that may come in helps to finance other government activities. In reality, there is no separate savings account for Social Security."

No lock box. Social Security is a real program with real money and real benefits, but it has no separate piggy bank. So says the Concord Coalition.

What's a decent, taxpaying, think-tank-fearing columnist to write?

I say Social Security is a lot more than the empty vessel the Concord Coalition describes. There is a moral and legal obligation connected to it. Workers and their employers have paid into that system over the years, and it has all the aspects of an insurance annuity, plus the full-blown obligations of a government social contract backed by the full faith and credit of the United States.

Still, the numbers and the direction are a lot more daunting than the Center for Economic and Policy Research wants us to tell you.

President Bush famously uses the word "bankruptcy" in connection with the Social Security trust fund while assuring current Social Security recipients that they will continue to get their checks. That assurance has not appeared to change many minds in higher age groups about his voluntary privatization program.

The Social Security recipients I know -- an assortment of widowed aunts and acquaintances -- aren't confused. They know the score: that Bush's privatization program doesn't do much, if anything, to set the program right fiscally. And it has to be set right.

John Hall is the senior Washington correspondent of Media General News Service. E-mail: jhall@mediageneral.com. Distributed by Scripps Howard News Service.

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