The Social Security Trustees' Report

[RTFirefly]

There should be a number of topics of interest to mine the Trustees’ Report and related documents with respect to. For instance, there seems to be a great deal of discussion in the blogsphere about why the trust fund exhaustion date moved closer, rather than further away.

Here’s the Trustees’ Report. (Here’s last year’s report, if you want to compare.)

Feel free to use this thread for any debate or discussion for which the Trustees’ Report provides new data to fuel the discussion. The debate I’m particularly interested in is the question of prioritization: why the hell should we attack Social Security first, aside from the (presumed) desire of Bush & Co. to effectively undo it?

In terms of dealing with this nation’s fiscal problems, the order of priority should be:

1. The budget deficit
2. Medicare as we’ve known it
3. Medicaid
4. The prescription drug benefit
5. Social Security

It’s hard to impute sincere motives to Bush’s efforts to jump Social Security to the head of the line, especially in a way that (by borrowing trillions of dollars in the next two decades) will exacerbate #1, and accordingly make every other problem more difficult to deal with.

According to this morning’s WaPo, the available numbers put into perspective the relative sizes of different long-term budgetary problems:

The government would have to put aside $11.1 trillion today to finance Social Security’s promised benefits indefinitely, the trustees reported. But just the new Medicare prescription drug benefit included in the 2003 Medicare Modernization Act has an unfunded liability of $18.2 trillion projected out infinitely.

“The problem is, they’ve got the cart before the horse,” Bartlett said of the Bush administration. “They’ve made Medicare vastly worse, and now they’re saying to be responsible, we have to take on Social Security. It’s utterly illogical.”

Saving briefed Republicans on Capitol Hill yesterday, presenting data that showed Medicare’s total unfunded liability at $65.4 trillion, almost six times Social Security’s.

So using the GOP-preferred infinite horizon view (oogabooga!), the unfunded liability of Bush’s prescription drug benefit is 64% larger than that of Social Security. And the unfunded liability of Medicare as it existed prior to the drug benefit is 4.25 times that of Social Security.

I’ve seen an infinite-horizon projection of the U.S. budget deficit in the past day or so, but I can’t seem to find it. Suffice it to say that it makes Medicare’s unfunded liability look small. (According to the Economic Policy Institute, the CBO estimates that by 2042, the unified budget deficit will be 7.8 times that of Social Security. And even in President Bush’s budget, if one goes to p.209 of the big-ass “Analytic Perspectives” pdf, the Administration projections for 2075 are that interest on the national debt, all by itself, will cost the government 13.3% of GDP, more than Medicare (10.4%), Medicaid (3.3%), or Social Security (6.4%, of which only 2% is an unfunded liability).

Any way you look at it, it’s clear which problems are huge, which problems are semi-huge, and which problems are comparatively manageable. Social Security should wait its turn in line, until we deal with the more serious problems.