In the weeks leading up to the 2018 midterms, President Donald Trump released a statement that included remarks about Social Security which drew intense scrutiny from a wide range of fact-checkers, including those from The New York Times, PBS and PolitiFact.
Specifically, Trump said, “We are making Social Security stronger.” In response, the fact checkers have said, “Not so.”
The truth sleuths all agreed that Social Security’s finances had, to some degree, worsened since Trump assumed office and blamed his economic policies and legislation as being partly responsible for the deterioration.
But the real fact is the Social Security Administration largely says the “Great Deterioration of 2017″ didn’t happen. The SSA actually summarized the year-over-year results as “little change.”
Moreover, the 2018 SSA Trustees Report specifically says that “Legislation/Regulation” accounted for zero percent of that modest change.
This conclusion was shared by former SSA Public Trustee Charles Blahous, who indicated that all of the changes to the 75-year projections amounted to very little with respect to the program’s long-term actuarial balance.
Alicia Munnell said the same thing in MarketWatch. The Brookings Institution said, “No News Is Good News”
Where did the fact-checkers go wrong? It starts with the facts themselves, which suggested a deterioration but omitted the improvements which, in theory, offset the declines.
In general, experts look at Social Security as a whole system over 75 years for a number of economic reasons. The fact-checkers, instead, applied a different standard to measure Trump’s claim. Instead of looking at Social Security in total, they examined only part of the system over a relatively short period of time.
They highlighted the areas where the system is weaker, and largely ignored the offsetting improvements elsewhere in the report.
“According to that report, the fund for retirees will suffer reduced income because of both the tax law and the Trump administration’s move to rescind the Deferred Action for Childhood Arrivals program,” The New York Times summarized.
Here is the actual text from the cited report: “As a result, the elimination of DACA has a small but significant net negative financial impact over the short-range projection period and a negligible net negative effect over the long-range projection period.”
With respect to the tax law, the trustees said: “As a whole, the (tax reform) law has a significant net negative effect on the financial status of the OASDI program over the short-range projection period and a negligible net positive effect over the long-range projection period.”
In terms of the tax change, it is difficult to blame Trump’s plan. That legislation generated months of analysis, and no one mentioned the impact on Social Security. In hindsight, we seek to blame the president as an individual when Congress, the Congressional Budget Office, and the SSA did not even study the impact of the law on the Social Security program.
Moreover, the larger problem remains of the fact-checkers using forecasts of the trustees as material fact rather than estimates. The trustees caution readers not to apply this reasoning. “Significant uncertainty surrounds the intermediate assumptions,” the trustees warn.
In other words, you can’t use year-over-year results as an apple-to-apple comparison of fact.
This analytical approach overlooks the obvious: What if the trustees were overly optimistic about the baseline estimate? Does that mean the president is responsible as an individual for the shortcomings delivered by reality?
In this particular case, the 2017 baseline expectation projected that the economy was going to grow rapidly. In fact, the economy since Trump arrived has delivered record numbers of jobs with record wages. Yet, even a surging economy failed to generate the necessary revenue to meet the projections.
Today, Social Security serves as a lifeline for millions of seniors who have few economic alternatives. It deserves a serious debate. Unfortunately, we can’t even tell voters which set of facts about its future is accurate.
Brenton Smith has written about the need for Social Security reform in Barron’s, Forbes, MarketWatch, TheHill.com, and other nationally branded media. He founded Fix Security Now, and can be reached at JoeTheEconomist@gmail.com.
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