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Payable Benefits

An otherwise decent Jonathan Weisman article contains this whopper:

Middle-income Americans would be hit as well, although not as hard. Workers earning as little as $35,000 a year would lose a quarter of their promised benefits by 2065, although their benefit under progressive indexing would be 11 percent larger than the check Social Security could afford to issue by then.
"The check Social Security could afford to issue by then" refers to benefits payable under currently projected revenue rather than benefits scheduled under current law. The benefits payable number is a reasonable one to use for some purposes. But it's only fair to compare it to a fully-funded alternative. The modifications Bush has outlined so far only close 50 percent of the Social Security budgetary gap, meaning that Bush Benefits Payable will, likewise, be less than status quo benefits payable. On top of that, the Bush plan involves a large quantity of borrowing to finance the startup of private accounts. Weisman's working with an apples and oranges comparison here.

April 30, 2005 | Permalink

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Comments

MY, don't you think that the whole SS thing is dead, and his news conference was just a way to try to put the best spin on everything?

"Al" -- STFU, unless you want to address the $1.3 million in new debt every minute and that nearly 1 in 5 kids in the U.S now live in poverty.

Posted by: Al Gore | Apr 30, 2005 11:58:36 AM

Ah fuck, expect another DeLong let's pervert Yglesias into a dismal scientist posting for this otherwise excellent catch.

Posted by: anon | Apr 30, 2005 12:05:54 PM

This is where the administration is winning the language wars in the media, not "private" versus "personal" accounts, but in setting the baseline for comparisions. It's far more subtle and far more insidious, and I fear that the whole SS not only isn't dead, it's rending towards the conservatives winning and, basically, dismantling the program over time.

All for their tax cuts.

Posted by: pblsh | Apr 30, 2005 12:13:26 PM

Come on anon, Matt is posting his brains out on music and basketball to keep from being drawn to the Dismal Side. Matt: "Me an economist? no way, no how. But man take a look at that yield curve." Brad DeLong: "Matt, I am your father"

Matt will be assimilated.

Posted by: Bruce Webb | Apr 30, 2005 12:35:48 PM

For the record, my mother's father and my mother's older brother and my brother's younger brother are all economists, so there's no need for a Vader-like revelation of a family connection. Basically, everyone in my family is either an economist or a writer, so I write about economics....

Posted by: Matthew Yglesias | Apr 30, 2005 1:12:20 PM

That should be "mother's younger brother" not "brother's younger brother," of course. Young Nick Yglesias is a good-for-nothing Yalie slacker who'll never amount to anything.

Posted by: Matthew Yglesias | Apr 30, 2005 1:13:20 PM

The article seems to disagree with you: "The solvency gap between benefits promised and Social Security taxes owed would be closed by a formula change, known as progressive indexing, that would pare back benefits for everyone currently making more than $25,000 a year -- 70 percent of Americans."

Solvency gap closed means just that, doesn't it?

Posted by: Thomas | Apr 30, 2005 2:44:03 PM

the solvency gap is closed by taking $2 trillion from general funds, on top of whatever privatization would require...

Posted by: Atrios | Apr 30, 2005 3:13:49 PM

Is that $2 Trillion the pay back of the bonds of ths SS trust fund, or is that in addition to the pay back?

Posted by: John Casey | Apr 30, 2005 4:06:37 PM

All of this assumes *the shortfall will even happen*! And it won't, unless the U.S. economy behaves contrary to its entire history.

Why not a tax hike for those making more than $90K that goes into effect in 2041 if we need it?

Posted by: Smallbottle | Apr 30, 2005 6:16:21 PM

I like Smallbottle's approach. The best thing about it is, if the GOP complains about tax hikes, you could do what they do -- point out that the 10-year impact is . . . zero!

Posted by: barry | Apr 30, 2005 8:59:29 PM

Smallbottle rules.

Check numbers against probable reality. Then double check.

Then wonder why we are even having this conversation.

Posted by: Bruce Webb | Apr 30, 2005 9:03:04 PM

I know where the WMD are. And Bush has a terrific Social Security reform plan.

So stop being so skeptical. We are both truth tellers. Check the record.

-

Posted by: Ahmad Chalabi | Apr 30, 2005 10:19:47 PM

"...the Bush plan involves a large quantity of borrowing to finance the startup of private accounts."

So what smart person is going to figure out what the existing SS benefits would look like if that exact same large quantity of borrowing were used to finance the existing SS plan?

Posted by: wishful | May 1, 2005 12:31:36 AM

forget raising income taxes....

just dedicate the revenue from the Estate Tax to Social Security.

the truly ridiculous part of the Social Security debate is that in 2041 there will be no problem funding the social security "shortfall" from general revenues, because "general revenues" will have been used for a couple of generations to pay off the Trust Fund, and the money that had been used to pay off the notes in 2041 will be there in 2042.

All we need to do is balance the budget, and we're home free.

Posted by: p.lukasiak | May 1, 2005 7:19:49 AM

The speech has the architect's fingerprints all over it. Rove uses the negative to win. Always. Under this scheme, the middle class will turn against a program that offers them so little, less support for social security, end of social security,... Rove wins. This wasn't about positives. This was about negatives.

Posted by: ken melvin | May 1, 2005 7:19:24 PM

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