It's natural for a self-described "fact-checker" to circle the wagons when his fact-checking is called into question. So the defensive reaction of Dana Tims, the author of a "fact-check" about Social Security that we questioned earlier this week, is understandable.
Unfortunately, Tims, who writes for the PolitiFact Oregon website sponsored by the Portland Oregonian, compounded the faults of his original post when he responded Friday to my analysis. Tims' original post criticized Sen. Jeff
In his follow-up responding to my analysis, Tims added a new error, misrepresented my argument and failed entirely to address the factual misstatements in his original post.
We'll pass lightly over the fact that my first name is Michael, not "Thomas," as Tims has it. More seriously, in my original critique and a subsequent email, I cited four factually incorrect statements in the original post. These were that "after years of rolling up surpluses, Social Security in 2010 began paying out more in benefits than it was collecting"; that the program is "leaking money"; that it "bleeds red ink"; and that "the program has chalked up increasingly large deficits each year since (2010), requiring money to be taken from its bonds to make up the difference."
All these statements are inaccurate, and flagrantly so. In responding to an online commenter on the Oregonian website, Tims further stated, "the money SS is 'distributing' in benefits is drawn from the Social Security Trust Fund, which still has quite a bit in reserve. That tank, however, is running low and lower."
This also is wildly inaccurate. Social Security is not drawing a single penny from its trust fund to pay benefits. Nor is the trust fund "running low and lower." On the contrary, it's growing, as I pointed out to Tims. See the accompanying graphic, which is drawn from data published by the Social Security trustees that can be found here (2007-08) and here (2009 forward).
The data show that the trust fund has risen steadily from $2.24 trillion in 2007 to an estimated $2.78 trillion today and will continue to grow through 2019 -- pretty much the exact opposite of "running low and lower."
PolitiFact's follow-up didn't even mention these errors, much less correct them.
Tims seems to buy into the view that because Social Security uses the interest it earns on its Treasury bonds to pay some benefits, and because
That's a rather tortured path to take to get to the wrong conclusion, so let's clear away the underbrush.
First of all, the government pays interest on Social Security's Treasury bonds every year. It also pays interest every year on Series EE savings bonds, on T-bonds in millionaires' portfolios and on T-bonds in China's portfolio. None of those transactions in and of themselves can be defined as "contributing to the deficit"; you won't hear serious economists, liberal or conservative, say that "China contributes to the deficit," or "Warren Buffett contributes to the deficit" or "little Johnny who got savings bonds for his birthday contributes to the deficit" -- for the very reason that those statements are untrue.
Nothing in the law says that Congress couldn't fund any of those interest obligations by raising it from income taxes. If it raised taxes far enough, obviously, there wouldn't be any deficit at all. Nothing in the law says that today's tax rates are immutably carved in stone.
Obviously, what contributes to the federal deficit isn't Social Security, but Congress' failure to match inflow to outflow. But that's entirely within Congress' power to remedy, and has nothing whatsoever to do with whether Social Security uses interest income to cover benefits. The key to Social Security's relationship to the federal budget is that, by law, the system can not spend more on benefits than it takes in from its legal revenue sources -- the payroll tax, income taxes on Social Security benefits and interest on its assets. If it doesn't get enough from those sources, then benefits have to be cut. Period. That's what Merkley said, and he was right.
Remarkably, PolitiFact Oregon didn't appear to reach out to any actual Social Security experts to assist with its analysis. It doesn't seem to have asked the Social Security Administration. Social Security has been painstakingly studied for decades by financial analysts and economists of nationwide, even worldwide, repute. Did PolitiFact make use of this voluminous store of data and analysis?
PolitiFact Oregon, instead, quoted its cousins PolitiFact New Hampshire and PolitiFact Wisconsin, both of which published fundamentally erroneous posts about Social Security. The site also cited someone named Dan Laschober, an Oregonian whom it identifies as "a tax expert" and "a frequent Merkley critic." Quoting a "frequent critic" of the original target of its fact-checking doesn't score well as an outreach for objective truth. In any event, the issue with Social Security isn't really a tax issue but an issue of fiscal construction.
"Fact checking" of the sort that PolitiFact claims to do arose as a way to distinguish truth from falsity in political debates. What PolitiFact Oregon has done in its Social Security posts is to take political sides. That's because the people who claim that Social Security contributes to the deficit are conservative ideologues determined to chip away at the program. Their success depends on misleading the public about a very fundamental fact about Social Security.