At Bloomberg Business Week, the distortion of what the Social Security system's trustees told the public on Monday began with its headline and opening sentence.
The headline: "Social Security Fund to Run Out in '35: Trustees." Any reader would assume that the reference is to the situation with the retirement and disability programs combined, as both are collectively referred to as "Social Security." Reporter Brian Faler doubled down on the headline error in his opening sentence:
The Social Security program will exhaust its trust fund in 2035 and have to start reducing benefits to senior citizens unless Congress intervenes, its trustees said.
Some readers may figure out because of his reference to "senior citizens" that Faler was only referring to the Old Age and Survivors retirement program, but that's a stretch. The reporter finally came clean in the next sentence ("That is three years sooner than projected in 2011 for the retirement benefits program, which serves 44 million people, the trustees said in an annual report today"), and the in next paragraph finally noted that the combined exhaustion date for OASDI (Old Age Survivors and Disability Insurance) is 2033: "The combined Social Security trust funds would be depleted in 2033, three years earlier than projected."
Geez, even the Associated Press, aka the Administration's Press, didn't go to that length to mislead about the situation. Stephen Ohlemacher and Ricardo Alonso-Zaldivar's beginning was far more accurate:
Social Security is rushing even faster toward insolvency, driven by retiring baby boomers, a weak economy and politicians' reluctance to take painful action to fix the huge retirement and disability program.
The trust funds that support Social Security will run dry in 2033 - three years earlier than previously projected - the government said Monday.
For those who are keeping score, what the Trustees projected would be coming 25 years down the road a year ago (2036 in the 2011 report) is now, thanks to yet another lousy year for the economy, four years closer (2033 minus 2012).
There's also this nugget from the Trustees' summary which both news services referred to only vaguely in the case of AP (i.e., without dollar amounts) and only discussing disability in Faler's report:
Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983 ... The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the economy slows after the recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.
"After the recovery is complete"? Oh well, let's not digress.
In 2007, Social Security ran a surplus of $186.5 billion. The Democrat-driven recession (see my original call in July 2008) and Democrat-engineered mediocre to non-existent recovery have been the major factors leading to a reversal of fortune of about $250 billion ($186.5 billion plus $66 billion). Baby Boomer retirements played a much smaller part, and many of tho who retired and began collecting Social Security benefits earlier than the current Full Retirement Age of 66 did so earlier than they originally planned because of the lousy economy.
It would be reasonable to contend that Bloomberg Business Week's Brian Faler was trying to present a later day of reckoning which would misinform those choosing to only read the headline and/or his first sentence. It's telling that not even two Associated Press reporters would go there.
Cross-posted at BizzyBlog.com.