Is Social Security Really Going Bankrupt?
While the program is in trouble, Sen. Rick Scott's claim that Social Security is "going bankrupt" is false.
Last August, the Social Security Administration put out its long-awaited Trustees Report. The report projected that the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays out benefits to Social Security recipients, “will be able to pay scheduled benefits on a timely basis until 2033, one year earlier than reported last year.” That means that the fund would have to begin paying out benefits at a reduced rate—76 percent of the full amount—starting in 2034.
That’s not great news for beneficiaries or those who will be beneficiaries at that time. But what it really means is that this scenario will come to pass unless Congress does something to either shore up the health of the Social Security funds or adjust its funding formula.
It does not, however, mean that Social Security is “going bankrupt.”
This came up this week as part of the controversy over the “11 Point Plan to Rescue America,” a messaging document recently released by Sen. Rick Scott (R-FL), the chairman of the Senate Republican Campaign Committee. The plan has been controversial, with Sen. Mitch McConnell (R-KY), the Republican Senate Minority Leader, making it clear that it conflicts with his own strategic objectives for the midterm elections.
Scott’s plan, which is meant to illustrate what the GOP would do if it captures Congress in November’s elections, only mentions Social Security briefly, stating that they will “force Congress to issue a report every year telling the public what they plan to do when Social Security and Medicare go bankrupt.”
However, other items on the agenda, which include sunsetting all legislation within five years, have been interpreted by some opponents as a call to take away long-held benefits. Scott’s claim that Social Security is “going bankrupt” was evaluated this week by FactCheck.org.
“In promoting his plan to ‘rescue America,’ Sen. Rick Scott went too far in claiming that Medicare will go ‘bankrupt’ in four years and Social Security in 12 years,” the site said. “Government trustees project that certain Medicare and Social Security trust funds would become depleted by then, but payments would continue, albeit at a reduced rate.”
The fact-checking column was in response to Scott’s appearance last week on Fox News, during which he defended the plan from questioning by host John Roberts. “For sure, the long-term financing of Social Security and Medicare has been and remains a problem, but—as we’ve written over the years—such “bankruptcy” claims could leave the wrong impression. Neither program is going out of business,” FactCheck said.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.