The Morning Dispatch: The Looming Social Security Crisis

Plus: The remnants of Ida sweep through the Northeast.

Happy Friday! The story about McDonalds’ McFlurry machines we mentioned yesterday goes even deeper than we imagined.

Thanks to several readers for writing in and sending us this deep dive into the situation, which is legitimately pretty sketchy!

Quick Hits: Today’s Top Stories

  • At least 46 people have died in New York, New Jersey, Pennsylvania, Connecticut, and Maryland after Ida—no longer a hurricane but still a powerful storm—caused flash floods across the Northeast.
  • new real-world study from Israeli researchers found that, 12 days after receiving a third dose of Pfizer’s COVID-19 vaccine, adults’ relative risk of a confirmed COVID-19 infection decreased more than 11-fold, and their relative risk of severe illness decreased more than 10-fold.
  • Alexanda Amon Kotey, a British national and Islamic State member, pleaded guilty on Thursday to all charges brought against him for his participation in a hostage-taking scheme in Syria that led to the deaths of four American journalists and humanitarian aid workers: James Foley, Kayla Mueller, Steven Sotloff, and Peter Kassig. “The justice, fairness, and humanity that this defendant received in the United States stand in stark contrast to the cruelty, inhumanity, and indiscriminate violence touted by the terrorist organization he espoused,” acting U.S. Attorney for the Eastern District of Virginia Raj Parekh said in a statement.
  • Georgia Attorney General Chris Carr announced Thursday that former District Attorney Jackie Johnson had been indicted on a felony charge for her role in hindering the murder investigation of Ahmaud Arbery last year. Johnson showed “favor and affection” to one of the men later charged in Arbery’s murder and failed to “treat Ahmaud Arbery and his family fairly and with dignity,” the indictment alleges.
  • Schools in Nigeria’s Zamfara State were ordered to close in recent days after armed bandits abducted at least 73 students from a state-run high school. Mass kidnappings have become somewhat common in the region, with children typically being released by their captors after families make ransom payments.
  • Judge Robert Drain approved Purdue Pharma’s bankruptcy settlement plan on Wednesday that will require the company’s owners, members of the Sackler family, to forfeit their equity in the company and pay approximately $4.5 billion in damages in installments over the next decade. As part of the deal, the Sacklers will receive lifetime immunity from civil liability over their role in perpetuating the American opioid epidemic. Several states plan to appeal the decision.
  • Initial jobless claims decreased by 14,000 week-over-week to 340,000 last week, the Labor Department reported on Thursday, the lowest level since the onset of the pandemic in March 2020. The Bureau of Labor Statistics is scheduled to release August’s jobs numbers later this morning.
  • Walmart, the United States’ largest retailer, announced Thursday it is raising its minimum hourly wage from $11 to $12, increasing pay for approximately 565,000 of its 1.6 million American employees. The company’s average wage for hourly workers is now $16.40 per hour.

The Coming Insolvency of Social Security

An annual government report published earlier this week estimated that, due to the COVID-19 pandemic, Social Security’s funding will run out in 2033—one year earlier than previously projected. Medicare’s life expectancy remained unchanged from last year, when it was forecast to be depleted by 2026.

From an actuarial perspective, the pandemic cut both ways regarding the solvency of the two entitlement programs, from which between 60 and 70 million people benefit. On the one hand, the recession put millions out of work and dramatically cut the amount of revenue generated by the payroll tax—the programs’ primary source of funding. Conversely, the excess deaths wrought by the virus skewed toward older Americans eligible for the benefits.

Ultimately, though, the former consideration was more pronounced, leading the trustees of the funds—Treasury Secretary Janet Yellen, Labor Secretary Marty Walsh, Health and Human Services Secretary Xavier Becerra, and Acting Social Security Commissioner Kilolo Kijakazi—to adjust their estimates.

The Old-Age and Survivors Insurance Trust Fund, which disburses Social Security funds, will be able to operate as normal until 2033, at which point continuing tax revenue would be able to cover only 76 percent of promised benefits. The Hospital Insurance Trust Fund, which disburses Medicare Part A funds, will be able to operate as normal until 2026, at which point continuing tax revenue would be able to cover only 91 percent of promised benefits.

The pandemic may have accelerated these trends—at least with regards to Social Security—but both programs have faced questions about their long-term viability for years, particularly as the population has gotten older, with a smaller pool of younger workers to shoulder the burden of a mass of retiring baby boomers.

“Overall it is noteworthy that the Social Security insolvency year continues to move up. However, the Social Security and Medicare drain on our public finances is so much bigger than the trustee figures even indicate,” Brian Riedl, a senior fellow at the Manhattan Institute, told TheDispatch. “The reality is, Social Security is already running permanent annual deficits, and those deficits will have to be made up by current borrowing and current taxes. The idea that we have 13 years where [the program] is just fine before it goes belly-up assumes that the trust fund actually has any money.”

Flooding From Ida Kills Dozens

(Photograph by Spencer Platt/Getty Images.)

Since we last wrote about Hurricane Ida’s landfall in Louisiana on Sunday, the storm’s remnants have swept across the nation, bringing torrential rains and strong winds to cities and towns across the Northeast. As of Thursday night, local authorities have recorded at least 46 deaths, many from urban areas.

“We are in a whole new world now. Let’s be blunt about it. We saw a horrifying storm last night, unlike anything we have seen before,” New York City mayor Bill de Blasio said yesterday. “And this is a reality we have to face. And unfortunately, the price paid by some New Yorkers was horrible and tragic.”

Images of swamped subways, submerged vehicles, and flooded high rises on the Eastern seaboard brought renewed attention to natural disaster vulnerabilities in cities. New York City, Philadelphia, and even Washington, D.C., felt Ida’s impact in the days following its initial landfall.

Central Park set a new record for the most rainfall in a single hour between 8:51 and 9:51 p.m. Wednesday, and New York City reported more rain in a single day than it typically does during the entire month of September. New Jersey reported 23 deaths and New York reported 13, eight of which occurred in Queens basements.

“The United States National Weather Service issued a flood emergency in Manhattan, Brooklyn, Queens, the Bronx, Staten Island, and parts of Long Island last night. This is the first time that such a warning has ever been issued for the city,” President Biden said Thursday. “People were trapped in the subways, but the heroic men and women of the New York Fire Department rescued all of them.”

The southern states hit by Ida are also in recovery mode after the hurricane left hundreds of thousands without power and cell service and stalled the region’s oil production.

Worth Your Time

  • As the number of new COVID-19 cases driven by the Delta variant has exploded, so, too, have the number of articles mocking and shaming vaccine-hesitant people who have died of the disease. “Whom are these stories for?” Elizabeth Bruenig asks in a piece for The Atlantic. “If persuasion is the target, then the aim seems off—a general problem in our democracy, where persuasion is a key method of self-governance but something we’re less and less amenable to. In that sense, the strange case of vaccine persuasion is just another entry in the annals of our disillusionment with our own liberal democracy. One receives the distinct impression from today’s discursive environment that persuasion in its traditional democratic form—wherein a great deal of value is placed upon shrewd and moving rhetoric that assumes listeners’ basic goodwill—is a useless venture, and that lower forms—insults, scolding, intra-group memeing, the dirty persuasion of disinformation campaigns—are all that’s left. Maybe those things are useless too, one gathers, but at least they’re fun and cathartic.”
  • As the State Department’s acting director for Iraq political affairs during President George W. Bush’s second term, Thomas Warrick helped design the Special Immigrant Visa program. Now a senior fellow at the Atlantic Council, he believes the SIV process urgently needs an update if we are to honor our commitments in Afghanistan. “The U.S. government needs now, at last, to commit the people and resources necessary to clear the number of SIV and refugee cases by a reasonable but ambitious target,” Warrick argues in the Washington Post. “Neither security nor American values need to be compromised. Those in Congress who criticized the Biden administration for slowness to respond need to step up immediately to vote [for] money for overtime and for bringing back retired homeland security, intelligence, and military personnel to clear this backlog.”

Something Positive

Hey, how about some good news? According to Kenya’s recent wildlife census, the country’s crackdown on poaching is working. The elephant population has grown 12 percent over the past seven years, and there “has been a notable increase of all the three species of giraffe found in Kenya” since 2011.

“Efforts to increase penalties on crimes related to threatened species appear to be bearing fruits,” the report concludes. “Such efforts should be sustained for long term conservation and management of this species.”

Presented Without Comment

Also Presented Without Comment

Toeing the Company Line

  • The Advisory Opinions podcast is built for days like yesterday. Get off Twitter, tune out the noise, and let David and Sarah explain what is actually going on with the Texas heartbeat law—and what it does (and doesn’t) mean for the likelihood of Roe v. Wade being overturned.
  • If you’re short on time and can’t listen to a 65-minute podcast, David’s French Press from yesterday (🔒) is a worthy substitute. “Here’s the shortest possible description of what happened,” he writes. “In a 5-4 unsigned opinion the Supreme Court refused to block a highly unusual Texas law that bans abortions when there is a ‘detectable fetal heartbeat.’ But that short description doesn’t even begin to describe what happened yesterday. The highly unusual law has led to a highly unusual legal result, and that means that a host of people are just deeply, deeply confused.”
  • Atlantic staff writer Graeme Wood made his first-ever Remnant appearance on Thursday, joining Jonah for a conversation about the future of the Taliban, the psychology of extremists, and the future craziness of American politics.
  • On the site today, Weifeng Zhong explains that our secrecy-driven model for intelligence collection is behind the times, and in particular behind China. He calls for more of a focus on open-source information.

Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Charlotte Lawson (@charlotteUVA), Ryan Brown (@RyanP_Brown), Harvest Prude (@HarvestPrude), and Steve Hayes (@stephenfhayes).