Is There a Crisis With U.S. Social Security?

Yesterday, the Social Security trustees released their annual report on the state of the trust fund. As the Washington Post’s Dana Milbank writes today, it is “a bit ceremonial” for Bush administration officials to warn “about entitlement calamity” every year when the report is released.

Almost on cue, Treasury Secretary Henry Paulson announced yesterday that “rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America’s future prosperity.” Conservatives in Congress joined in as well, with House Minority Whip Roy Blunt (R-MO) issuing a statement claiming that the new report proves there is a Social Security “crisis.”

But the report actually shows something quite different, according to Center For American Progress Action Fund Domestic Policy Adviser James Kvaal, who wrote yesterday that “the report is an important reminder that the program is not in a crisis.”

“While we need reforms to extend the life of Social Security, we do not need to panic and adopt massive benefit cuts,” writes Kvaal. Economist Paul Krugman agrees with Kvaal, writing on his blog yesterday that the report shows that “the actuarial balance has been improving rather than worsening” and that “Social Security’s financial problem is relatively minor.”

This material was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund.

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