Four years ago, George W. Bush attempted to reform the entitlement program Social Security, warning that the system was accelerating into collapse and would soon run deficits. Democrats scoffed and claimed the Social Security system was solid and wouldn’t have problems for at least 50 years, as Harry Reid told PBS’ Jim Lehrer in June 2005. Just last year, the CBO — under the direction of Peter Orszag, now budget director in the Obama administration — claimed that the first cash deficits in Social Security would not come until 2019.
Now, however, the CBO has determined that Social Security will run cash deficits next year and in 2011, and by 2016 will be more or less in permanent deficit mode.
CBO estimates are almost always low, typically by a factor of 10 or more. As I understand it, this is because the CBO is required by law to address only what is in the actual bill and not factor in practical or realistic considerations. In reality, Congress and regulatory agencies mess with things along the way, the end result being nothing like was promised. Given this, it’s not surprising that Social Security is in much worse shape than advertised, but this was predictable.
As the article mentions, George Bush warned of looming SS financial troubles and tried to address them, but he got no support from Congress. During the last presidential election, Fred Thompson continually stressed the urgency of fixing SS, but was ignored by the media. They diligently peppered Thompson with questions about “the horse race,” even as he expressed frustration at not being allowed to discuss substantive issues.
The lesson is that, when we’re told Obamacare will cost between $900,000,000 (per Obama) and $1,600,000,000,000 (per the CBO using Obama’s numbers), the actual cost is likely to be in excess of $16,000,000,000,000.
But don’t worry. It’ll “bend the cost curve down” and “be deficit neutral.”
And if you don’t believe this, it’s because you are a racist who doesn’t want to see a black president succeed.