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Paul Ryan drinks deeply from pool of Social Security lies

COMMENTARY

March 12, 2013|By Michael Hiltzik
  • House Budget Committee Chairman Paul D. Ryan (R-Wis.) releases a new budget proposal.
House Budget Committee Chairman Paul D. Ryan (R-Wis.) releases a new budget… (Carolyn Kaster / Associated…)

I'd like to offer my thanks to House Budget Committee Chairman Paul D. Ryan (R-Wis.) for doing so much to validate my list of the five biggest lies about "entitlement" programs published on Sunday.

Ryan's proposed federal budget, released Tuesday, uses four of them. As a dividend, he exploits a few that I didn't mention.

The ones from my list are: He uses the thoroughly discredited "infinite horizon" projection to claim that Social Security and Medicare are "tens of trillions" of dollars in the hole; he suggests that retirees aren't paying their fair share for their benefits; he suggests that the programs are hammered by benefits going to the wealthy; and he treats Medicare and Social Security as though they're similar programs with similar issues. All false; my explanations can be found here.

But Ryan also exploits several further nuggets of pure disinformation. For example:

--Life expectancy. Ryan observes, "Today, the average man can expect to live an additional 17.7 years after they turn 65. Women can expect to live another 20 years." Yes, but. Life expectancy is highly sensitive to economic status -- on average, the poor have shorter lives.

As Social Security experts showed in 2007, the gain in life expectancy after age 65 for Americans born in 1941 compared with those born in 1927 was three years -- for those in the top half of the earnings range. For those in the bottom half, the gain was less than one year. Lesson: There's no one-size-fits-all solution to rising life spans.

--Increasing numbers of beneficiaries. Ryan laments that in 1950, there were only 2.9 million Social Security recipients. Today there are 55 million. Right: In 1950, relatively few new retirees qualified for benefits in a program that only started paying old-age benefits in 1940. Originally, huge swaths of working people were excluded, including domestic workers and farmhands. They got added into the program over the next few years by Republican and Democratic administrations alike.

Importantly, the increase in America's elderly population was fully anticipated at the program's birth in 1935. Edwin Witte, the Wisconsin economist who was its architect, estimated for Congress that by 1980, one-eighth of the U.S. population would be 65 or older, and they would have to be provided for: "Whether you do it in the form of pensions or in some other way, there is no way of escaping that cost."

Incidentally, Witte actually overestimated the elderly population. In 2011, his figures would put the 65-plus population of the U.S. at 39 million. That year, according to the Social Security Administration, the number of retired workers including dependents collecting benefits was 38.5 million. What does Ryan suggest should be done with all these people? He doesn't say.

He also doesn't mention that some of the increase in beneficiaries over the years is due to new benefits enacted by Congress, such as stipends for school- and college-age children of deceased workers. Among the Americans who received those benefits as youngsters? Paul Ryan.

--Workers versus beneficiaries. The so-called dependency ratio is one of the oldest canards in the anti-Social Security arsenal. Short response: It has nothing to do with the program's fiscal health. Nevertheless, Ryan points out grimly that in 1950, there were about 16 workers for every retiree; today, about three. (Why stop at 1950? In 1940, the ratio was 159 workers per retiree!)

Ryan suggests that as a consequence of this bogus statistic, maintaining benefits for future retirees will mean raising payroll taxes to "crushing levels." Nonsense. The Congressional Budget Office, among other sources, projects that Social Security's share of the U.S. economy will increase by about 1.5 percentage points, to 6.63%, over the next 70 years. Removing the cap on annual income subject to payroll tax, currently set at about $113,000, would eliminate the projected deficit under almost any circumstances.

So, no sale. Ryan's latest budget proposal is just like his last two: It's an effort to gin up panic over programs that serve all Americans fairly and responsibly, so the comfortable, including members of Congress, don't have to worry about their own bank accounts.

ALSO:

The most dangerous billionaire

The stealth attack on Social Security

The five biggest lies about Social Security

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