Budget Control Act Military Cuts Will Cover the Social Security Shortfall

A key reason that it's relatively easy to scaremonger about predictions regarding Social Security's finances decades in the future is that the language often used to talk about Social Security's finances isn't immediately comparable to anything else that most people can relate to. A number that isn't comparable to other numbers you know is a meaningless number. How big a difference is seven trillion dollars? It sounds like a huge number. But in a context devoid of comparable numbers, it's a meaningless number.

Responding to the 2012 Social Security Trustees report, Robert Greenstein of the Center on Budget and Policy Priorities put the Trustees' projections about the future finances of the Social Security system in the context of the current debate about tax policy:


The revenue loss over the next 75 years from making [the tax cuts enacted under President Bush] permanent would be about two times the entire Social Security shortfall over that period. Indeed, the revenue loss just from extending the tax cuts for people making over $250,000 -- the top 2 percent of Americans -- would itself be nearly as large as the entire Social Security shortfall over the 75-year period. Members of Congress cannot simultaneously claim that the tax cuts are affordable while the Social Security shortfall constitutes a dire fiscal threat.


This is, obviously, a politically relevant comparison. Among the 99%, the most popular thing to do about the budget is to increase taxes on the rich. Among the 1%, the most popular thing to do about the (combined) budget is to cut Social Security benefits. That's not surprising: each group of people, the 99% and the 1%, supports the alternative that's better for them. But as Greenstein said, "Members of Congress cannot simultaneously claim that the tax cuts are affordable while the Social Security shortfall constitutes a dire fiscal threat," because the tax cuts on the rich and the Social Security shortfall are the same size. If two quantities are the same size, then you cannot claim that one is big while the other is small. This is why it is crucial to put different choices on the same scale. If we are going to talk about the finances of the Social Security system over 75 years, then we have to talk about the consequences of the choices we are now making about tax policy over 75 years, in order to compare apples and apples.

The second most popular thing to do about the budget among the 99% is to cut military spending. This suggests the question: is it possible to put the projected future shortfall of Social Security's finances in the context of choices that we are currently making about the military budget?

Under the Budget Control Act, roughly half a trillion dollars is supposed to be pulled out of otherwise planned military spending over the next ten years. This is called the "sequester," and Members of Congress who get a lot of money from military contractors hate it, and they want to repeal it. Of course, assuming that the target for reducing projected deficits remains the same, if the military spending sequester is repealed, that money has to be replaced, either through increased cuts to domestic spending (the theme of the Ryan budget) or through a mix of cuts to domestic spending and revenue increases (which is what 1% pundits want President Obama and Congressional Republicans to agree to do in the lame duck session after the election.)

So let us compare two worlds: one in which the military spending sequester is repealed, and one in which it is not repealed.

In world one, the military sequester is repealed, the military budget grows at roughly the rate of inflation as President Obama has proposed for the next ten years; and then for the next 65 years, it also grows at the rate of inflation.

In world two, the military sequester is not repealed, or if it is repealed it is replaced by a cut in military spending of the same amount over ten years (i.e. roughly half a trillion dollars). After the ten years, the military budget grows at the rate of inflation for the next 65 years (now starting from a lower level, so even though it's growing at the same rate as in world one in the out years, you're getting savings every year in comparison to world one because you started at a lower level.)

According to the Congressional Budget Office, "defense" spending in (fiscal) 2011 was $699 billion. Let's use that number.

Suppose we think in terms of constant 2011 dollars, just to keep things simple.

So, to simplify, let's say that in world one, the military budget, in constant dollars, is $699 billion forever.

And in world two, say we do a continuous cut from the military budget over the next ten years of about the size of the military sequester. Our goal is to take out roughly $500 billion in spending from the military over ten years. If we reduce the military budget by 1.5% each year in constant dollars, at the end of the ten year period we've taken out about $551billion. That's roughly the amount of the sequester. In year 11, in world two, the defense budget is about $601 billion, and that's where it stays forever.

After 75 years, the total difference in spending between the two worlds is $6.9 trillion.

How does that compare to the size of the projected Social Security shortfall, over 75 years?

Wouldn't you know: according to this2011 piece by the anti-Social Security and pro-military spending American Enterprise Institute, $6.9 trillion was the 75-year gap between Social Security's projected revenues and Social Security's projected payout.

Now, you could argue that these two things have nothing to do with each other, because Social Security has its own, separate, system of financing: the payroll tax.

But if you look at the claims advanced on behalf of cutting Social Security benefits, a common theme is the claim that "the country can't afford" the Social Security benefits that we have been promised. That claim has nothing to do with the method of financing.

Well, if the country can't afford to pay the Social Security benefits that we were promised, then the country can't afford to maintain current levels of military spending, and the level of military cuts in the sequester must stand. Because the two things are the same size.

As Robert Greenstein might say: "Members of Congress cannot simultaneously claim that maintaining current military spending is affordable while the Social Security shortfall constitutes a dire fiscal threat."

Robert Naiman is Policy Director at Just Foreign Policy.

Nice post.Thank you for taking the time to publish this information very informative! So happy to be given a privilege to post a comment here.


Thanks for sharing your thoughts. I truly appreciate your efforts and I am waiting for your next write ups thanks once again.


I would like to thank you for the efforts you have made in writing this article. I am hoping the same best work from you in the future as well. .


ray ban 2151 [linlei0204] knock off ray bans ray ban sunglasses white business coaching certification air jordan retro 6 nike free running shoes air max 90 straight jacket oakley ray ban sidestreet ray ban 3386 ray ban shades for men life coaching jobs ray ban girls sunglasses oakley sunglasses prescription coach outlet black friday coach outlet shopping oakley sunglasses for kids oakley holbrook ray ban wayfarer black lens air jordan shoes womens ray ban wayfarer oakley ski goggles shop ray ban sunglasses nike sb zoom tre ray bans sunglasses prices oakley store locations nike air jordan basketball shoes imitation oakleys oakley golf shoes nike zoom lebron v frogskin oakley sunglasses polarized ray ban sunglasses ray ban men sunglasses oakley clearance sunglasses oakley military sunglasses pink coach purse ray ban shooter sunglasses nike air jordan shoes for sale cheap coach bags outlet ray ban virtual mirror wayfarer ray bans cheap oakley c six coach backpack purse ray ban 3194 sunglasses for men ray ban oakley polarized sunglasses http://www.oakleysunglasses... oakleysunglassesoutlet where to get cheap ray bans ray ban sunglasses outlet ray ban wayfarer eyeglasses coach for cheap oakley official website coach gift card ray ban 4141 nike free 70 review oakley drill bit ray ban aviators for women fake ray ban sunglasses cheap nike dunk low cl oakley outlet store locator nike dunk high oakley wiretap oakley eyepatch sunglasses ray ban repairs oakley oakley oakley monster dog nike outlet atlantic city ray ban style nike free trainer 50 reviews ray ban new sunglasses oakley snowboarding ray ban sunglasses sales m frame oakley buy fake ray bans oakley customer service cheap ray ban frames oakley sales nike shoes free coach beiste coach madison nike free id nike outlet tennessee 1937 ray ban sunglasses coach outlet osage beach madison coach bag nike free trainers 70 oakley hijinx cheap authentic ray ban sunglasses meteor ray ban oakley splice sunglasses coach knockoff purses coach outlet online canada nike air max premium vintage ray ban sunglasses ray ban sunglasses 2011 ray ban 3362 ray ban 3025 sunglasses ray ban wayfarers on sale ray ban 5095 oakley shoes official coach factory outlet online coach factory outlet shoes coach outlet mall locations ray ban tortoise wayfarer oakley bluetooth sunglasses oakleys sunglasses cheap usa coach factory outlet ray ban kids sunglasses ray ban sunglasses chicago ray ban sunglasses for less ray ban outdoorsman oakley law enforcement discount oakleys on sale coach outlet lake george air jordan 11 low ray ban for girls nike air max 96 oakley coupon codes oakley products oakley standard issue coach hand bag coach luggage outlet 23 air jordan green nike air max coach outlet sales oakley ladies sunglasses nike air zoom kobe 1 black ray ban wayfarer sunglasses ray ban eyeglasses for women 2013 ray ban outlet online wholesale ray bans wayfarer air max 1 oakley tactical glasses fake ray ban wayfarer sunglasses ray bans prescription christian coaching ray ban rb3016 really cheap oakley sunglasses ray ban factory store coach promotional code oakley sunglasses wiki air jordan release dates ray ban outlet cheap coach handbags cheap oakley safety glasses ray ban wayfarers sunglasses black ray ban wayfarer cheap ray ban rx5206 nike dunk hemp retro nike air jordan shoes oakley frogskin sunglasses oakley flak jacket xlj nike zoom tre how much are ray bans find ray ban sunglasses ray ban 2132 nike factory outlet orlando oakley glasses online coach.com outlet nike air max infrared baby coach cheap ray bans sunglasses for men oakley dangerous polarized ray band sunglasses griffey air max coach factory coupon nike air max cb34 coach clothes ray bans wayfarer black oakley sunglasses cheap ray ban sunglasses 52mm free life coaching oakley crowbars got coach outlet coach outlet coach outlet online coach outlet in lancaster pa oakley script sunglasses is the coach factory outlet real ray bans rb2132 cheap mens ray bans ray ban gradient sunglasses ray ban outlet online store nike air max tailwind nike shox for sale baby ray bans oakley enduring oakley whisker 6b oakley snowboard pants coach wristlet nike shox mens coach keychains oakley probation polarized ray ban jackie ohh iii oakley lifetime warranty oakley over the top ray ban round sunglasses oakley g30 coach outlet clearance is coachfactory.com real

If you fail it doesn't mean you are weak, you fail because there are things that are not meant for you or not meant to happen. Accept failures and take it as a challenge to become a better person. Visit my site for more information. Thank you and have a nice day.



Post new comment

The content of this field is kept private and will not be shown publicly.
  • No HTML tags allowed
  • Lines and paragraphs break automatically.

More information about formatting options

This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Enter the characters shown in the image.