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BAUCUS BALKS AT THE WHOLE TRUTH
Partial truths. We've all heard them. The car dealer who says the used car is in great condition, but doesn't tell you that it has been in a major accident. Or the stock broker who says you can trade stocks for free, but doesn't tell you about the 3% annual commission. Partial truths are misleading, at a minimum, and could have very unexpected results.
 There is a similar partial truth being promoted by critics of Social Security reform, the impact of which could have devastating effects. It says there is no urgency to fix Social Security since the Social Security trust fund "is currently slated to pay full benefits through the year 2040," to quote a recent press release from the Senate Finance Committee Chairman, Max Baucus (D-MT). What he and some others don't say is that the Social Security Trust Fund has no money in it, only IOUs that the taxpayers will have to pay with other tax money.
Unless Congress decides to reduce Social Security's benefits (an unlikely option), legislators then have only two real options when the shortfalls begin in 2017: raise taxes on workers or cut other government programs.
Let's assume Congress decides to cut government programs to cover the Social Security shortfall. How much would have to be cut? To give you an idea of the magnitude of the problem, here are some examples of possible program cuts that could be made in order to pay Social Security's IOUs.
According to the Social Security Trustees, in the first year of the program's cash deficit - 2017 - the shortfall is estimated to be $11 billion (in today's dollars). Using the current cost (FY06) of government programs, we'd have enough money to make up this shortfall if we eliminated Head Start ($6 billion), the State Children's Health Insurance Program ($4.4), and the Food and Drug Administration ($0.5 billion).
By the following year, the shortfall more than triples to $38 billion. So, added to the first round of cuts, we would have enough to pay Social Security benefits if the Congress also eliminated FEMA ($9 billion), the EPA ($8 billion), the FBI ($5.7 billion) and the National Science Foundation ($4.3 billion).
In the third year, Congress could make up the additional deficit by also eliminating the child nutrition programs (school lunch, school breakfast, child and adult care, summer food service and special milk programs) ($12.4 billion), and HUD's section 8 tenant based rental assistance program ($15 billion).
Within three more years, in the year 2023, the annual shortfall will be $100 billion! This represents cuts comparable in size to the food stamp program ($40 billion), the National Institutes of Health ($28.4), and medical care for all veterans ($29 billion). By now, you get the picture.
The point is this: don't be lulled into complacency by partial truths that say everything is fine until 2040 because of Social Security's trust fund. It's a false promise. And a sin of omission.
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