*Fact Checking Bush's Statements on Social Security

Nutting is Washington bureau chief for CBS Marketwatch, and he seems to be the only reporter in that city with the nerve to tell the American people that their president is baldly dissembling. Here’s the opening of his report:

NUTTING (1/11/05): President Bush made several factual errors Tuesday about Social Security's long-term financing problems at a photo op event designed to educate the public about the retirement system.

Yes, that paragraph is quite polite–but Nutting actually saw that it was news when Bush made his wild misstatements! And, after laying out a few background facts, Nutting did get down to brass tacks. Here’s the first entry; the fact-checks appeared beneath a tangy sub-headline:

NUTTING:

Bush vs. facts

Bush: “As a matter of fact, by the time today's workers who are in their mid-20s begin to retire, the system will be bankrupt. So if you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now.”

The facts: The Social Security system cannot go "bankrupt," for it has no creditors. By law, the trustees will continue to pay reduced benefits even if the trust fund is exhausted. Payroll taxes will continue to come in and benefits will continue to be paid.

According to the trustees' intermediate economic forecast (neither doom nor boom), the trust fund will be able to pay about 73 percent of scheduled benefits in 2042 and about 68 percent of scheduled benefits in 2078.

Future presidents and Congresses could also choose to fully fund scheduled retirement benefits from general tax revenue.

At this point, we were upset because Nutting hadn’t explained how large those “73 percent” payments would be. But wouldn’t you know it? Making it look amazingly easy, he laid that out in his next entry:

NUTTING:

Bush: "Most younger people in America think they'll never see a dime."

The facts: Social Security says younger people will see a lot more than a dime. Their retirement benefits–even under a "flat-bust" system–will be significantly higher than today's benefits in real terms.

For low-income Americans, currently scheduled benefits for those who retire in 2080 are $19,906 per year in 2004 dollars. If Social Security can pay only 68 percent of those benefits, that would be $13,536 per year, compared with benefits of $8,804 for low-income retirees who retired last year.

For the highest earners, Social Security is currently promising $53,411 per year for those who retire in 2080 (or $36,319 per year if Social Security can pay only 68 percent). Current maximum benefits are $21,891 per year for those who retired last year.