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Figures Distort Picture

June 16, 1985

In an otherwise serious article on the budget deficits, ("Huge Budget Deficits Aren't Going to Disappear," June 9) John Oliver Wilson succeeded in making at least four serious errors in one sentence dealing with Social Security and its impact on the federal budget:

He claims that in 1962, only 18% of federal budget expenditures went to the elderly, compared to 33% now. Social Security was not included in the federal budget until 1969, and Medicare was non-existent until 1965. These facts alone make it clear that such figures are a gross distortion of the true picture.

Social Security consists of four trust funds, which are funded basically by taxes paid by 117 million workers and their employers. It is in a good shape by all accounts. All Social Security checks, Medicare A payments, disability payments and one-fourth of Medicare B payments are made from these trust funds. This includes cost-of-living increases. These payments are not made from general revenue funds. It is a distortion to place them in the same category as military pensions, which are funded completely from general revenues as part of the military and defense budget.

There are at least 10 bills in the House and Senate that would take all Social Security finances out of the federal budget in fiscal 1986. The inclusion of Social Security in the federal budget has masked the severity of the growing deficits.

Without Social Security assets, there is no question that the greatest part of the deficits come, as Wilson agrees, from military spending, cuts in tax revenues and the growing interest payments.

Just as important, without Social Security, it is likely that general revenues spent for the elderly are not 33%, but closer to 8% of the federal budget outlays. This is quite a different picture.

While it is true that an important part of military pensions can be construed as payments to the elderly, there has recently been a serious outcry about the 40-year-old colonels who have retired from military service and are working in other fields.

They hardly qualify as elderly, and it might even be unfair to think of them as such. In any case, the pensions they get are part of the defense and military budget all funded from general revenues.

It appears that these truths are being heard in Washington. It will be interesting to see how they will effect the forthcoming Senate-House conferences on how Social Security is to be handled.

LEON KAPLAN

Beverly Hills

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