Media Dozes While Social Security Is on the Verge of Negative Cash Flow (Why that just won’t help the health care debate will it?!)

https://i2.wp.com/i739.photobucket.com/albums/xx40/mmatters/SocSecBrokeCard0309.jpgEd Morrissey at Hot Air had the catch of the day yesterday when he revealed, based on Congressional Budget Office internal projections distributed to Congress during the summer, that the Social Security system will spend more cash than it takes in during the government’s next fiscal year ending September 30, 2010. Read about it there, or here, because you won’t see the establishment media acknowledge the existence of these revelations.

Morrissey isn’t clear as to when the report was prepared, but if it dates back to July or even early- mid-August, it’s possible that Social Security will show a measly positive cash flow of less than $10 billion when the dust settles on the current fiscal year that will end next week, compared to +$72 billion a year ago. That’s because the decay in Treasury’s cash collections during the current quarter has been that bad.

Here’s the relevant portion of the spreadsheet Morrissey obtained:

SocSec2008to2011perCBOSummer09

The green box shows cash inflows for fiscal 2009 through 2011, while the purple box has the cash outflows. The "Primary Surplus" figures in the red box represent positive (in 2009) or negative (in 2010 and 2011) cash flow.

The rest of CBO’s spreadsheet shows that the system will have tiny net positive cash flows from fiscal 2012 through fiscal 2015 (never more than $20 billion), and will begin to go irretrievably negative after that, until by 2019 the cash hemorrhage will be -$63 billion.

Morrissey points out that the report lays bare the fundamental incompetence and/or dishonesty earlier this year of Peter Orszag, President Obama’s Director of the Office of Management and Budget:

…. Democrats wanted analyses that allowed them to ignore the problems in Social Security, and Orszag was happy to supply them. Douglas Elmendorf has had to right the ship at CBO while Orszag continues to blow his predictions at OMB, most notably in overall deficit projections, which Orszag had to admit were off by more than 40% and $2.2 trillion over the next ten years.

Of course, they were helped along by a complacent media unwilling to do math, and a host of apologists for the Left.

…. The situation at Social Security is much worse than this administration and Democrats in Congress want to admit. They want to continue busting the deficit and creating new entitlements while the existing ones careen towards collapse.

The situation may be much worse than even the CBO portrays.

First, the current year’s projected postive "Primary Surplus" of $18 billion is itself be on shaky ground, because the current quarter has been horrible. Here are the collections of employment taxes, which include both Social Security and Medicare, in July and August of 2009 compared to July and August of 2008 (links are to respective Monthly Treasury Statements; information is at Table 3 of each report, and is the sum of "on budget" and "off budget" employment taxes, numbers are in millions):

July 2009

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