Mostly Strong USAT Coverage of Federal Obligations Marred by Ideological, Historically Brain-Dead Lefty Quote

Dennis Cauchon at USA Today has been one of a very few establishment press reporters willing to expose federal workers' disproportionate pay and benefits (previous examples here and here) as well as Uncle Sam's precariously dangerous financial situation.

Cauchon has two USAT items today on the latter topic (HT to NB commenter Gary Hall): "U.S. funding for future promises lags by trillions," which reports that federal obligations totaled $61.6 trillion as of September 2010, a $5.3 trillion increase from a year earlier, and "Government's Mountain of Debt," which itemizes those obligations by major source.

Unsurprisingly, 75% of federal obligations, or a combined $46.2 trillion (actually more, which will be seen at the end of this post), relate to Social Security and Medicare, which no one but a few deluded leftists believe (or pretend to believe) are sustainable in their current form. Unfortunately, at the end of his first story, Cauchon quoted one of them, Michael Lind, whom the USAT reporter described as "policy director at the liberal New America Foundation's economic growth program," who said the following:

"The false claim that Social Security and Medicare are about to bankrupt the United States has been repeated for decades by conservatives and libertarians who pretend that their ideological opposition to these successful and cost-effective programs is based on worries about the deficit," he says.

It will surprise absolutely no one here that the foundation's major funding comes from groups which love big government, or that co-founder Lind's background includes stints at several liberal publications, and a slew of books which lean decidedly leftward.

Lind's statement is a deliberate mischaracterization of the viewpoints expressed by people across the political spectrum for decades, and should not have been allowed in an otherwise well-done report. Cauchon may believe that a previous quote from someone at Truth in Accounting offsets what Lind said, but that spokesperson's viewpoint concerned the largely unrelated non-ideological mechanics involved in full federal financial disclosure.

The truth is that quite a few liberal politicians and commentators described Social Security and Medicare as being in need of repair during the Bill Clinton era. In fact, it was pretty much mainstream Democratic Party thinking for the better part of a decade.

Let's start with Al Gore at the Democratic National Convention in August 2000:

I will not go along with any proposal to strip one out of every six dollars from the Social Security trust fund and privatize the Social Security that you’re counting on. That’s Social Security minus. Our plan is Social Security plus. We will balance the budget every year, and dedicate the budget surplus first to saving Social Security.

If there was nothing wrong with Social Security as structured, why did it need to be saved?

Almost two decades ago in June 1992, Boston Globe columnist Charles Stein, whose sympathies clearly leaned left (in 2003, for example, he criticized Wal-Mart for turning into "a symbol of the anxiety we feel about capitalism as it is practiced in the 21st century"), criticized presidential candidate Bill Clinton because:

His only effort at curbing the growth of entitlements such as Social Security and Medicare is a proposed hike in Medicare payments for those earning more than $125,000 a year.

Again, if everything was just fine, why was there a perceived need to curb entitlement growth in Social Security and Medicare 19 years ago?

A November 11, 1996 New York Magazine "Intelligencer" item about Mario Cuomo noted that the former Empire State governor had just written a New York Daily News item called, get this: "Saving Medicare & Social Security." It also reported that just-reelected President Bill Clinton "would probably form a high-profile bipartisan commission to recommend changes to ensure the solvency of both programs over the coming decades."

Sorry, Mr. Lind, before not touching Social Security and Medicare became a mantra of a Democratic Party overrun by statists, reforming Social Security and Medicare was a bipartisan concern. You worked for Harper's, the New Yorker, and the New Republic during the mid-1990s, so you can't pretend not to know this. The Democratic Party's side of concern about Social Security's and Medicare's viability abruptly ended shortly after George W. Bush won the presidency in 2000. It is their ideological, politically calculated opposition, combined with insufficient assertiveness by the GOP, that has caused the previous decade's impasse.

Now let's get to the matter of "ideological worries about the deficit."

The fact is that Social Security, which without the recession might have at least avoided cash deficits until about 2017, is running annual cash deficits right now, and, according to the 2011 Trustees report, is projected to do so indefinitely (broken into three separate paragraphs by me for easier reading):

Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983.

 

The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years.

 

This deficit is expected to shrink to about $20 billion for years 2012-2014 as the economy strengthens. After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

Let me break it down so Michael Lind might understand (actually, it's pretty clear that he does, but doesn't care):

  • The rest of the government, effective last year, is having to fund Social Security's annual cash deficits.
  • The rest of the government has run $1 trillion-plus deficits during each of the past three years (fiscal 2009, 2010, and certainly fiscal 2011 by the time it ends in September).
  • Therefore, Social Security is not "successful", it's not cost-effective, and it's adding to already outrageous government deficits.

These facts aren't ideological; they're just facts.

Cauchon's otherwise mostly well-done report was marred by Lind's ideological drivel, which is wrong on the history and wrong on the current facts.

One other important oversight in the USAT reports relates to Medicare. Cauchon's detailed support column accurately tells us that its $25 trillion reported obligation "is likely an underestimate, Medicare's actuaries say, because it counts on 165 cost-saving changes in the health care reform law. Many of these are unlikely to occur — such as cutting physician payments 30% by 2012." Fine, but the USAT reporter should have told readers that the amount of the underestimate is over $15 trillion.

As seen here, the government's reported Medicare obligation dropped from $38.1 trillion at the end of fiscal 2009 to $22.8 trillion at the end of fiscal 2010 for the specious reasons Cauchon cited. He should have told us that the drop is so lacking in credibility that the system's chief actuary disavowed it in an attachment to the 2010 Trustees Report, in what for an actuary constitutes a scathing dissent:

Medicare Chief Actuary Richard Foster, who ran the numbers used in writing the trustees’ report, said in an attachment that there is a “strong likelihood” that some of the overhaul’s changes won’t implemented, so the forecasts don’t “represent a reasonable expectation for actual program operations.”

In other words, the right number for the government's future Medicare obligations is $40 trillion or more, and USAT should have reported that the grand total of all federal obligations is likely north of $76 trillion.

Cross-posted at BizzyBlog.com.

Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.