This is a good piece of data to take into the Catfood Commission II hearings. Remember how Bernie Sanders and other Social Security defenders insist that Social Security is solvent and on track to pay full benefits for the next 26 years? It turns out they’re wrong. It’s able to pay in full for 28 years, according to the Congressional Budget Office:

CBO projects that the DI trust fund will be exhausted in fiscal year 2018 and that the OASI trust fund will be exhausted in 2042. Once a trust fund’s balance has fallen to zero and current revenues are insufficient to cover the benefits that are specified in law, a program will be unable to pay full benefits without changes in law. The DI trust fund came close to exhaustion in 1994, but that outcome was prevented by legislation that redirected revenue from the OASI trust fund to the DI trust fund. In part because of that experience, it is a common analytical convention to consider the DI and OASI trust funds as combined. CBO projects that, if legislation to shift resources from the OASI trust fund to the DI trust fund was enacted, the combined OASDI trust funds would be exhausted in 2039.

This follows a four-year period of declining payroll tax revenues because of rising unemployment. The easiest way to “fix” Social Security, which is probably in better financial shape than any program in the federal government, is to get more people working and paying into the payroll tax. Better job growth alone would push out the solvency to at least 30 years, if not more. Increased wages and an influx of legal high-skilled immigrants wouldn’t hurt either. Then you could provide a path to citizenship for the undocumented and fold them into the legitimate economy, capturing their payroll tax (which is a short-run net benefit). After that, if you want to control for historic inequality by increasing the payroll tax cap to cover 90% of compensation, as the program was intended, fine.

But it’s simply dishonest to say that Social Security is bankrupt or even going bankrupt. It’s scheduled to pay full benefits for 28 years, even after a half-decade of bad job numbers.

David Dayen

David Dayen