The media's reporting on the Social Security Trustees' annual reports has fallen into an unfortunate pattern: No matter what the Trustees actually report, journalists tend to describe Social Security and Medicare's future in the gravest terms possible - topped by alarmist headlines. The coverage of Monday's 2019 report was no different.
"Social Security won't be able to pay full benefits by 2035" - CNN
"Medicare, Social Security Face Shaky Fiscal Futures" - Associated Press
"Social Security and Medicare Funds Face Insolvency" - New York Times
"Social Security is headed for insolvency by 2035" - CNBC
"Social Security, Medicare -- uh oh!" - Federal News Network
The actual news in the 2019 Trustees Report was much more positive than the headlines indicate. While it's true that the combined Social Security trust funds will become depleted in 2035 (if Congress takes no action to prevent it), that's one year later than the trustees projected in last year's report.
Even in the unlikely scenario that Congress allows the trust funds to run out, Social Security still would be able to pay 80% of benefits--1% higher than projected in last year's report. Meanwhile, the Social Security Disability Insurance (SSDI) trust fund is now projected to last twenty years longer than previously estimated--until 2052.
"The actual news in the 2019 Trustees Report was much more positive than the headlines indicate."
The bottom line: Social Security will not become "insolvent," as some of the headlines have screamed. The system would only be insolvent if the nation experienced 100% unemployment; otherwise, workers will continue paying FICA contributions, which will go toward current benefits--just as they have for the eight decades since Social Security was created.
The Trustees' report contained more good news about Social Security's finances. This year, Social Security will take in more than it pays out, despite last year's projection to the contrary. In fact, thanks to a $3 billion net increase in assets in 2018, the system will have a $2.895 trillion surplus by the end of 2019--a fact few media reports have mentioned.
As for Medicare, the numbers are fundamentally unchanged from the 2018 Trustees' report. The Hospital Insurance (Part A) trust fund is projected to become depleted in 2026, but the government still could pay 89% of benefits--even if Congress fails to enact corrective measures in the meantime.
To be fair, some journalists characterized the trustees report fairly. On his broadcast Tuesday afternoon, MSNBC's Ali Velshi engaged in a clear-eyed discussion of the report, featuring Monique Morrisey of the Economic Policy Institute. Refusing to join the alarmist bandwagon, Velshi noted that the financial condition of Social Security is "nuanced" and called out conservatives for "fearmongering" on the issue.
In a Los Angeles Times column entitled, "Surprise! Social Security has gotten healthier," Michael Hiltzik writes, "The crux of the conservative attack on Social Security in recent years has been the claim that the program is on an unbroken path to insolvency. Monday's release of the Social Security trustees' annual report knocks a pillar out from under that campaign."
Hiltzik is onto something when he cites conservative attacks on Social Security, because the mainstream media seem to have adopted the right's framing on this issue. Little wonder, then, that younger Americans don't believe Social Security will be there for them when they retire. Even under the worst-case scenario in the Trustees' report, future retirees will still receive benefits after 2035.
The Associated Press took the level of alarmism even further than most media outlets by conflating Social Security's finances with the national debt. In his article, "Retirement Programs Face Shaky Futures," the AP's Andrew Taylor quotes a Republican congressman as saying that the "financial condition of both programs is driving up federal spending." (No Democrats were quoted.)
"The truth is that there are efforts in Congress to move legislation that would keep Social Security financially sound for the rest of the century, mainly by asking the wealthy to pay their fair share of FICA payroll contributions."
In reality, Social Security and Medicare Part A are entirely self-funded and do not contribute to the federal debt. What's more, the biggest driver of the federal debt is 'tax expenditures' (monies the federal government forgoes through tax breaks and loopholes), including the multi-trillion dollar Trump/GOP giveaway to the wealthy and big corporations. Ever since the tax cuts were enacted, conservatives have been demanding cuts to Social Security and Medicare to pay for them.
The AP report also perpetuates the misleading claim--common in the mainstream media--that politicians in Washington are reluctant to confront Social Security and Medicare's long-term financial challenges. "[The Trustees' report] lands in a capital that has proven chronically unable to address it," according to the AP story. Last week, MSNBC's Stephanie Ruhle declared, "We don't hear Washington talking about a solution."
The truth is that there are efforts in Congress to move legislation that would keep Social Security financially sound for the rest of the century, mainly by asking the wealthy to pay their fair share of FICA payroll contributions. Bills from Rep. John Larson (D-Conn.) and Senator Bernie Sanders (I-Vt.) would adjust the payroll income cap--following four decades of income inequality and wage stagnation which have deprived the system of much-needed revenue. Congressman Larson's bill also provides retirees a modest benefit boost and some much-needed tax relief. As chairman of the House subcommittee on Social Security, he has held three public hearings on strengthening the system--hardly a sign of inaction.
Medicare can be put on a healthier financial footing by allowing the federal government to negotiate drug prices with Big Pharma, and expanding the kind of common sense cost-saving measures that the Affordable Care Act (ACA) utilized to extend the program's solvency. (Repealing the ACA, as many conservatives have voted to do, would cause Medicare's Part A trust fund to run out before 2026.)
Do some mainstream media outlets truly not realize that members of Congress are working to avert shortfalls in Social Security and Medicare without cutting benefits? Or do they simply believe that the "no action in Washington" narrative is more compelling than the truth? Either way, Americans deserve accurate--not alarmist--reporting on the future of earned benefits that safeguard us all upon retirement, disability, or the death of a parent or spouse. News headlines should reflect reality, not play into the hands of those who would cut Social Security and Medicare.
