NRCC Scare Mongers About Social Security To Malign Rep. McIntyre

October 28, 2010 3:22 pm ET

In a new attack ad against Rep. Mike McIntyre (D-NC), the NRCC attempts to scare seniors into believing they are being "robb[ed]" of their Social Security benefits. In reality, Social Security holds assets of over $2.5 trillion and is solvent for over 25 years despite the recession. And, in the unlikely event that Congress fails to shore up Social Security's finances before 2037, benefits would have to be cut — but would still be paid. 

NRCC: "Putting Social Security At Risk"

[Announcer:] Mike McIntyre and Nancy Pelosi are not being honest with North Carolina seniors. [McIntyre:] "I'll never risk your Social Security." [Announcer:] But McIntyre and Pelosi's big spending is robbing our Social Security Trust Fund. Social Security is billions in debt, and this year we'll be operating in the red. And now for the second year in a row, there's no cost-of-living increase for North Carolina seniors. McIntyre and Pelosi — their spending is putting our Social Security at risk. The National Republican Congressional Committee is responsible for the content of this advertising.

2010 Report From Social Security Trustees Shows The Trust Fund Is Solvent For Over 25 Years Despite Economic Downturn

Social Security Trustees: Trust Fund Sufficient To Pay Full Benefits Through 2036, 78 Percent Of Benefits Thereafter. According to the Social Security Board of Trustees: "The projected point at which the combined Trust Funds will be exhausted comes in 2037 - the same as the estimate in last year's report. At that time, there will be sufficient tax revenue coming in to pay about 78 percent of benefits." [SSA.gov, 8/5/10]

Social Security Trust Fund Is Big Enough To Finance Benefits For Baby Boomers. According to the Economic Policy Institute:

The retirement of the large Baby Boomer generation will cause Social Security spending to increase from 4.8% of GDP in 2010 to 6.1% of GDP in 2035. The Baby Boomer retirement was fully anticipated by Social Security's actuaries and the members of the National Commission on Social Security Reform ("the Greenspan Commission") appointed by President Reagan. As a result of reforms enacted by Congress in 1983 following the commission's report, Social Security is in the process of building up a trust fund that will be large enough to cover benefits through the peak Baby Boomer retirement years.

Though the oldest Baby Boomers became eligible for retirement benefits in 2008, most Baby Boomers are still in the workforce. Around 2025, when the younger Baby Boomers reach retirement age, Social Security will begin drawing down the trust fund. At that point, Social Security's outlays will start to exceed its tax revenues and interest from the trust fund, though the balance of the trust fund will ensure that full benefits can be paid through 2036 or so.

The Social Security trust fund will run out of assets around 2037. If Congress does not act before then to shore up the program's finances, Social Security benefits would have to be cut by an estimated 22% to allow revenues to fully cover benefits. Though such an abrupt cut in benefits should certainly be avoided, the inflation-adjusted value of these benefits would still be larger than current benefits due to economic growth, though they would replace a smaller share of pre-retirement earnings (CBO 2009).

[EPI.org, 8/6/10, parentheses original, emphasis added]

Long-Term Funding Shortfall Is Not As Severe As The NRCC Suggests

The Post-2037 Funding Shortfall Is Predicted To Be Less Than 1% Of GDP. According to the Economic Policy Institute: "Social Security spending as a share of the economy is projected to decline after the Baby Boomer retirement, leveling off at around 6% of GDP; this is a little more than 1 percentage point above current revenues as a share of GDP. The Social Security actuaries have projected that an increase in revenues equal to just 0.6% of GDP will be sufficient to cover promised benefits over the 75-year planning period because of the savings built up in the trust fund." [EPI.org, 8/6/10, citations removed for clarity]

If Congress Does Nothing, Benefits Would Be Cut By 22% After 2037 - But Would Still Be Paid. According to the Economic Policy Institute: "The Social Security trust fund will run out of assets around 2037. If Congress does not act before then to shore up the program's finances, Social Security benefits would have to be cut by an estimated 22% to allow revenues to fully cover benefits. Though such an abrupt cut in benefits should certainly be avoided, the inflation-adjusted value of these benefits would still be larger than current benefits due to economic growth, though they would replace a smaller share of pre-retirement earnings." [EPI.org, 8/6/10, citations removed for clarity]

On Spending, NRCC Shouldn't Throw Stones

Before Obama Took Office, The FY 2009 Deficit Was Projected At $1.2 Trillion. As reported by the Washington Times: "The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn't enact any new programs. [...] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record." [Washington Times1/8/09, emphasis added]

CBPP: Deficit Grew By $3 TRILLION Because Of Policies Passed From 2001 To 2007. According to the Center on Budget and Policy Priorities: "Congressional Budget Office data show that the tax cuts have been the single largest contributor to the reemergence of substantial budget deficits in recent years. Legislation enacted since 2001 added about $3.0 trillion to deficits between 2001 and 2007, with nearly half of this deterioration in the budget due to the tax cuts (about a third was due to increases in security spending, and about a sixth to increases in domestic spending)." [CBPP.org, accessed 1/31/10, parentheses original]

Public And Foreign-Held Debt Skyrocketed While Bush Was In Office. Below are two graphs prepared by the Speaker's office showing the increase of publicly and foreign-held debt during the years Bush was in office:

bushpublicdebt

bushforeigndebt

[U.S. Treasury via The Gavel, 6/11/10]

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