In your urge to snark Mr. McCain, didn't you forget about the trust fund? I'd always thought the liberal mantra was that we boomers don't need to worry about our retirement because of the trust fund, that it's not just current taxes that pay benefits, and that anyone who thinks that current taxes pay for current benefits is some kind of right wing tool.

The trust fund is squandered on the Bush tax cuts and reckless spending.

McCain and his campaign might be smarter than you're giving them credit for. It's possible (likely?) that they do, in fact, understand how SS works, but that they think the American people don't.
They may think that people who hear an accurate description of the program (framed McCain's way) will turn against the whole program, because the Republicans overestimate the extent to which the public shares their conservative "values."
I think they're wrong, and I think the correct response is the one I've most often seen--that this is how the program was always intended to work, and that this is the nature of the program people have come to like and to rely on. But the fact that McCain's attack sounds idiotic and misinformed to anyone with a minimal understanding of the program doesn't mean that it will sound that way to the national voting public--who, if not idiotic, certainly have a sketchy sense of how social security works.
In a nutshell, I think focusing on McCain's apparent idiocy is a distraction. We shouldn't make our response personal--McCain wants this campaign to be fought on the grounds of personality. Instead, our response should focus on policy--on the fact that he is directly attacking a very popular retirement security program by saying its intended funding mechanism is "a disgrace."

I'd say the key is not that McCain is only now understanding how Social Security works, but that he's (apparently) only now feeling the need to address it as "an absolute disgrace." While I'm sure he's talked about SS reform, private accounts, etc., before, has he ever couched such disgust at the very structure of Social Security? Why hasn't he launched this educational campaign in the past?

Well, Democrats should never have let SS be framed as a retirement savings program-- it's quite obviously not structured to invest and grow an individual's contributions the way a 401(k) or IRA should-- when it's really more of a public retirement insurance program. No one thinks that premiums paid to Allstate or State Farm or whomever are actually banked for future use, after all; we know that they're used for others' claims and that our future claims will be paid mostly from other's premiums. The shorthand of paying in and being entitled to benefits isn't a matter of withdrawing one's own funds & interest, as so many assume, but of having paid premiums with every job and receiving payouts based on those amounts.

Both my parents died well before retirement age, and the only SS benefits received were a few years' dependent payments for my younger sibs (I was just too old when our dad died) and a short period of disability payments. No one in the family's entitled to the money they paid in over the years, although it was certainly more than was ever distributed (in fact, we were probably paying some or all of the disability benefits, if you think about it, because we were working & contributing at the time). That's the way it works, like any insurance benefit, and it's ridiculous to whine about it.

I'd always thought the liberal mantra was that we boomers don't need to worry about our retirement because of the trust fund, that it's not just current taxes that pay benefits, and that anyone who thinks that current taxes pay for current benefits is some kind of right wing tool.

I'm not sure whether you personally are a right-wing tool; I haven't enough data and make no judgment. But on the current funding of Social Security benefits: In 2007, current payroll taxes paid all of current SS benefits, with 186.5 billion dollars left over. The 186.5 billion dollar surplus was lent to the Treasury, reducing the overall budget deficit by that amount. Current payroll taxes pay current benefits, and then some. The trust fund continues to grow, and is entirely invested in debt instruments of the US government, which will eventually have to figure out how to repay the debt.

It's like if lots of people made fun of one guy's car because it was broken down, ugly, and lacked headlights. Then one of the dimmer members of the group, sensing an opportunity to jump in, piped up with, "yeah, four wheels and an engine? What's with that!?

But Ezra! You're missing an even better metaphor! It's actually like that scene in the 40 Year Old Virgin, when Steve Carrell says that breasts feel like big bags of sand. There must be some creative person on the interwebs who can make a satirical video to that effect...

"I'd always thought the liberal mantra was that we boomers don't need to worry about our retirement because of the trust fund, that it's not just current taxes that pay benefits, and that anyone who thinks that current taxes pay for current benefits is some kind of right wing tool."

I have never seen a liberal who was actually knowledable about Social Security express any such thing. In fact liberals have always been upfront about the fact that Social Security always has been and for the most part always will be a Pay/Go insurance system.

Instead it is the right wing tools who insist on miscasting the Trust Funds as an investment fund and then pointing out it is not ideal for that purpose.

The Trust Funds are invested in real financial instruments that carry real interest rates and create real obligations on the General Fund. That doesn't make them investment funds, the whole notion that the 1983 reforms was designed to in some way pre-pay Boomer retirement has always been a myth. A fact that should have been obvious since projections in the late 80's and early 90's had the Trust Funds going to depletion around 2030, the point of maximum Boomer impact. Which would have made for some pretty sorry plan for pre-funding, it would have meant running down your reserve fund to zero just as the last Boomers retired. Oops.

The current levels in the Trust Fund are more or less accidental. The economy happened to perform right in line with the 83 Commissions expectations from 1984 to 1993 with the result that Social Security returned to short term actuarial balance (the goal). As it turns out a combination of demography and better than projected growth from about 1996 and 2003 returned results pretty much at the top of the range of expectations with the result that the Reserve fund is now projected to be able to bridge the gap between income and cost until at least 2041. But that is all the Trust Funds are, they are reserve funds that may have to be tapped to pay as much as 22% of Social Security costs in the late 2030's. Or may not need to be tapped, it all depends on economic performance.

Perhaps there are some mushy headed liberals who would buy into the language used by ostap, but those of us who actually read the numbers know that the premise is simply incorrect to the point of being a right wing strawman.

Hershel you are on the right track but got some numbers wrong. The actual cash surplus from FICA and tax on benefits was $80 billion in 2007, the other $110 billion represents accrued interest. While it is true that for Unified Budget calculations the entire SS surplus is counted, in the real world of borrowing needs only the $80 billion is really available to offset other cash borrowing.

Interest on the Trust Fund is real as real. It is just not real 2008 cash dollars.

Bruce: Thanks for the correction. I'm afraid, though, that I don't quite understand your point about only surplus tax revenue, and not interest, being available to offset other borrowing. How so?

You seem much more confused then McCain. He is talking about workers INCOME tax is paying for what should have been paid for with FICA tax. Its not rocket science to know there is a difference and that FICA taxes have been spent on everything else but Social Security.

Income tax paying for Social Security? That makes no sense. FICA taxes bring in more dollars than Social Security pays out. FICA taxes are subsidizing the rest of government spending, not vice versa.

It’s always funny to watch one idiot call out another for being an idiot.

“He seems to believe that at some other point in history, retiree benefits were paid for through taxes contributed by former workers, or possibly the retirees themselves.”

http://www.ssa.gov/history/briefhistory3.html

After Social Security numbers were assigned, the first Federal Insurance Contributions Act (FICA) taxes were collected, beginning in January 1937. Special Trust Funds were created for these dedicated revenues. Benefits were then paid from the money in the Social Security Trust Funds.

From 1937 until 1940, Social Security paid benefits in the form of a single, lump-sum payment. The purpose of these one-time payments was to provide some "payback" to those people who contributed to the program but would not participate long enough to be vested for monthly benefits.

Payment of monthly Social Security benefits began in January 1940

On January 31, 1940, the first monthly retirement check was issued to Ida May Fuller of Ludlow, Vermont, in the amount of $22.54.

Ida May Fuller worked for three years under the Social Security program.

So Ezra for those of us intelligent enough to use a web browser and read it would appear in fact benefits where paid by the retiree themselves and other former workers. According to the Governments website that’s how the system was initially designed. This leads to the obvious question, who is it that doesn’t understand Social Security?

The fact you took liberty to read into his comment that he just now realized how SS is funded currently is another point, not that a progressive such as yourself has any problem abusing strawmen.

Nice to see your lack of research and lazy effort isn’t limited to Healthcare posting. Will we be seeing a correction to this post like the one when you said HSAs don’t cover women’s health? Oops my bad forgot, you don’t do corrections no matter how obvious your gaffe.

Nate's comment shows why McCain was confused: he must have thought it still worked now the way it did when he was a kid in the late 1930s.