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Yesterday Paul Krugman wrote a blog piece about how most Washington DC political reporters are totally incompetent, ignorant or uninterested when it comes to understanding actual policy issues.

Today, NPR's David Welna provides Krugman's point perfectly. Welna totally botches basic facts in his story "How Payroll Tax Cut Affects Social Security's Future" that ran on December 7th's Morning Edition. Much worse, he actually labels and numbers three central facts, all of which turn out to be false. Briefly, this is not the first year Social Security paid out more than it took in. This is not the first year baby boomers have collected retirement benefits. And no  the payroll tax holiday legislation did not and does not reduce Social Security's revenue.


Here are the first few paragraph's of Welna's piece:

President Obama put Congress on notice Tuesday in a speech in Osawatomie, Kan.

He said that unless a temporary payroll tax cut is extended this month, 160 million Americans would see their taxes go up next year by an average of $1,000. But there's concern on both sides of the political aisle that the payroll tax holiday might be undermining the solvency of Social Security.

Fact No. 1: Last year, for the first time in its 75-year history, Social Security took in less money than it paid out.

Fact No. 2: This year, the first of the baby boomers reached retirement age and began collecting Social Security benefits.

Fact No. 3: The payroll tax holiday that Congress approved a year ago reduced Social Security's revenues this year by $105 billion.

Obama showed no sign of being troubled by those facts when he popped into the White House briefing room earlier this week and called on Congress to extend the payroll tax cut for another year.

In fact, Obama's lack of concern probably had more to do with the fact that he knew that every one of Welna's so-called facts are simply false, or in the modern vernacular "pure unadulterated bullshit" that any cub reporter could easily verify as such.

Fact No. 1: Last year, for the first time in its 75-year history, Social Security took in less money than it paid out.

{you can practically hear Bruce Webb stroking out reading the above sentence}

In fact, since 1937 the OASI (retirement Trust Fund) has paid out more than it has taken in in at least 13 prior years: 1957, 1958, 1959, 1961, 1962, 1975, 1976, 1977, 1978, 1979, 1980, 1980, 1981, 1983. A quick visit to the 2011 Social Security Trustees Report would have told you as much. Welna could have spared himself the embarrassment of not knowing how to read a basic table if he had just called the Social Security actuaries office.

Table VI.A2 Operations of the OASI Trust Fund, Calendar Years 1937-2010

Since 1957, the DI (disability) trust fund  has paid out more than it has taken in in at least 16 prior years:  1962, 1963, 1964, 1965, 1975, 1976, 1977, 1980, 1981, 1982, 1984, 1987, 1992, 1993, 2009, 2010.
Table VI.A3.— Operations of the DI Trust Fund, Calendar Years 1957-2010

"For the first time in its 75-year history except for those other 13 times" doesn't have quite the same ring, does it?

Fact No. 2: This year, the first of the baby boomers reached retirement age and began collecting Social Security benefits.

The oldest baby boomers were born in 1946. The earliest age of eligibility for Social Security retirement benefits is 62. In fact, more people claim benefits at age 62 by far than any other age. So the first baby boomers began collecting retirement benefits in 2008. And lo an behold, the media took notice. There is even an NPR story that ran on Morning Edition, January 2, 2008Baby Boomers Begin to Claim Social Securityty by John Ydstie. NPR also ran a story about the very first boomer who made sure to be the very first to apply in Oct of 2007.

It is true that the oldest baby boomers are this year turning 66, what is currently the so-called "full retirement age", but that has no significance whatsoever. Crossing the age 66 threshold has no practical implications for retirees. Each year they wait after age 62 to claim benefits up to age 70, their monthly check rises by 8% . Nothing special happens at 66, and as I explained, most people born in 1946 are likely to have claimed their benefits already.  (Among men, 42% of those claiming in 2008 were 62, 44% in 2009, and 43% in 2010; among women its 48%, 50%, and 48% respectively). Millions of baby boomers have already claimed their retirement benefits.

Source: SSA Annual Statistical Supplement, 2011  

Fact No. 3: The payroll tax holiday that Congress approved a year ago reduced Social Security's revenues this year by $105 billion.

The payroll tax holiday reduced the amount of payroll taxes paid by employers and employees. But because the law requires the Treasury to reimburse the Trust Funds by the exact amount of revenue forgone, Social Security's revenues are exactly the same as they would have been without the holiday.

Here is the language of the law PL 111-312  section 601.
TRUST FUND.—There are hereby appropriated to the Federal
Old-Age and Survivors Trust Fund and the Federal Disability
Insurance Trust Fund established under section 201
of the Social Security Act (42 U.S.C. 401) amounts equal to
the reduction in revenues to the Treasury by reason of the
application of subsection (a). Amounts appropriated by the preceding
sentence shall be transferred from the general fund
at such times and in such manner as to replicate to the extent
possible the transfers which would have occurred to such Trust
Fund had such amendments not been enacted.

Frankly if I were a journalist who had the balls to taunt the President for not acknowledging "facts", only to learn that all three facts were actually totally false, I think I would look for a new profession. If I were NPR, I guess I'd have to fire the guy.

What do you think will happen?

Originally posted to Economides on Wed Dec 07, 2011 at 11:59 AM PST.

Also republished by Social Security Defenders.

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