Harry Reid: Social Security is “off the table”
posted at 7:17 pm on January 31, 2011 by Allahpundit
Via HuffPo, a case study in why nothing short of fiscal catastrophe will bring about bipartisan congressional cooperation on entitlement reform. To put this into context, a choice excerpt from last year’s report on the state of Social Security and Medicare from the program’s federal Trustees:
Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983. The projected deficit of $41 billion this year (excluding interest income) is attributable to the recession and to an expected $25 billion downward adjustment to 2010 income that corrects for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy. After 2014 deficits are expected to grow rapidly as the baby boom generation’s retirement causes the number of beneficiaries to grow substantially more rapidly than the number of covered workers. The annual deficits will be made up by redeeming trust fund assets in amounts less than interest earnings through 2024, and then by redeeming trust fund assets until reserves are exhausted in 2037, at which point tax income would be sufficient to pay about 75 percent of scheduled benefits through 2084. The projected exhaustion date for the combined OASI and DI Trust Funds is unchanged from last year’s report.
The long-run financial challenges facing Social Security and those that remain for Medicare should be addressed soon. If action is taken sooner rather than later, more options will be available and more time will be available to phase in changes so that those affected have adequate time to prepare.
Note in particular Reid’s blase attitude in the clip about Social Security being fully funded for the next 40 years. In fact, it’s only 26 years until the trust fund goes bust, but have a look at the first table here in Heritage’s essential rundown of how entitlements affect federal spending from last July. (If you can spare the time, scroll through their entire series of graphs, paying special attention to “Social Security and Medicare Are Crowing Out Other Spending.”) For two years running, the annual deficit has exceeded the sum total of all discretionary spending. Meaning, if we eliminated everything from the budget, defense included, aside from entitlements and interest on the debt, we’d still be in the red at the end of the year. And yet, to this guy, Social Security’s “off the table.” We’re finished.