Archive for the ‘Social Security’ Category

David Gregory's House of Pain

Monday, January 30th, 2012

At a time when millions of Americans are are experiencing massive unemployment, a painfully slow economic recovery, wage stagnation and the after-effects of the bursting of a multi-trillion dollar housing bubble, isn't  it time someone demanded that they suffer a little bit?

Of course not, you might say. But that's why you don't work in the media big leagues.

Here's NBC Meet the Press host David Gregory yesterday (1/29/12), speaking to Obama adviser David Axlerod:

But if you look at how dire the fiscal situation is in the country, we just came off a debt debacle this past summer. Alan Simpson, responding to the State of the Union, said: Where's the guts? Where's the hard stuff? Where's the beef? Where are the hard choices that Americans are going to have to make? What are Americans going to have to do with less of if this president gets re-elected?

Axelrod, to his credit, noted that plenty of people are actually hurting. But that didn't seem to impress Gregory:

GREGORY: But we're not dealing with the big drivers of the debt, as you know. The debt commission that the president convened is not advice that he acted on. And the reality is that the fiscal situation is dire. If we're not dealing with entitlements--what, you talk about shared sacrifice, would the president...

AXELROD: Listen, the...

GREGORY: Wait a second. He--there was a stimulus plan. There was a new healthcare entitlement, but there was nothing dealing with the big drivers of the day.

It's hard to overstate just how committed elite media are to the concept of government austerity as the fix to our current economic problems. Economists like Paul Krugman and Dean Baker might disagree, and the public would seem to think the "hard stuff" could be spending less on, say, the military. But that doesn't seem to register with people like David Gregory, who demand that politicians must be brave enough to cut Social Security--a program he's falsely declared to be one of the "big drivers" of the debt.

ABC Exclusive: Greek Fatcat Retirees Stealing From American Workers!

Friday, November 4th, 2011

The November 1 broadcast of ABC World News couldn't have been any clearer about what's happening in Greece: Their pampered, early-retiring workforce is stealing from Americans.

Anchor Diane Sawyer explained:

If you were watching your stocks today, you saw a nosedive. The Dow down nearly 300 points, so, what changed?  Well, blame it on the country of Greece, long criticized for being undisciplined, and now threatening American retirements.

OK, since we probably were all "watching our stocks" on Tuesday--like any other day--why is Greece doing this to us?

ABC correspondent Dan Harris explains how this all works by introducing us to 2 workers. The Greek--Yannis--is a 52-year-old bank teller, already retired for two years (naturally). The other is a 60-year-old Florida resident--Emma--who is  "still having to work around the clock and doesn't have enough savings to retire."

How representative are those workers? While Yannis resembles the Greek worker most familiar in the U.S. media, it's not clear that he's at all typical. This chart, for instance, shows the Greek retirement age isn't all that different from the rest of Europe.

Harris explains that Greeks live it up:

And check this out. While our maximum Social Security payment is around $28,000 a year, over in Greece, where Yannis lives, it's 20 grand more, $48,000 a year.

It's hard to figure out exactly what is being compared here, or where the figures come from. But you get the idea. Harris goes on to say that Greece "is a country of generous benefits, of pools and Porsches," with American workers footing the bill:

And so here is how Emma is now paying for Yannis.

In order to pay for all the retirement packages for people like Yannis, the Greek government borrowed big time from banks all over Europe. Now, Greece says it can't pay. So, those banks are facing huge losses and that could push Europe into a depression. Since America does so much business with Europe, we would be pulled down, too, and that, of course, would hurt Emma's savings.

I'm confused. Emma doesn't have much in the way of savings; even still, it's hard to fathom how that money is at risk. America might get "pulled down" and that would...affect her Social Security checks? There's no explanation for how that could possibly be true. But there is a graphic:

Oh. Now it makes sense, right? You can see the dollars floating out of the U.S. bank right into Europe.

You seem to hear more about Greek retirees than Greek workers, which makes stories like this fuel a sense of outrage at what Harris calls Greek's "fat pensions."

But occasionally another message breaks through, like in this USA Today piece (5/10/10):

ATHENS -- A hard life is about to get harder for Manolis Fylaktidis.

Greece's cash-strapped government is cutting the schoolteacher's $27,300 salary by about $5,300 as part of a dramatic austerity move the prime minister says is needed to pay the country's ballooning debt. "It is difficult now.... We have to change our life because life is too expensive," Fylaktidis says.

Even as the 44-year-old teacher's salary falls, the government is raising the value-added tax on most purchases for the second time in as many months, to 23 percent, and increasing electricity and water charges.

We might live in a very different world if workers in one country saw what they have in common with workers in another country, instead of being made to feel angry about supposedly cushy retirements.

To WaPo, Social Security Is a Treacherous Money Sucker

Tuesday, November 1st, 2011

On its Sunday front-page, the Washington Post published an incredibly dishonest attack on Social Security.

Under the headline, "Social Security Adding Billions to U.S. Budget Woes," reporter Lori Montgomery reported that "Social Security passed a treacherous milestone"--a moment where the program, largely because of the recession, spent more in benefits than it took in.

What does this mean? Montgomery tells readers: "Social Security is sucking money out of the Treasury."

Montgomery complains that "fixing Social Security has largely vanished from the conversation" about the country's fiscal crisis, and politicians are "ducking the issue." She adds: "Many Democrats have largely chosen to ignore the shortfall, insisting the program is flush."

This is the kind of language one might expect in an editorial, where papers are normally free to take a position on an issue under debate. Here the Post is declaring in a news piece that politicians who do not believe Social Security is in a crisis are wrong.

Montgomery singles out Democratic Sen. Harry Reid for a fact check:

In an MSNBC interview, he added: "Social Security does not add a single penny, not a dime, a nickel, a dollar to the budget problems we have. Never has and, for the next 30 years, it won’t do that."

Such statements have not been true since at least 2009, when the cost of monthly checks regularly began to exceed payroll tax collections.

Economist Dean Baker weighed in at his Beat the Press blog (his takedown of the Post's propaganda is a must-read):

Of course Senator Reid is exactly right. The system is self-financed under the law. In 2009 it began drawing on the interest on the government bonds it held. That is exactly what the law dictates, when Social Security needs more money than it collects in taxes, it is supposed to draw on the bonds that were purchased with Social Security taxes in the past. This means it is self-financing.

Anyone in the mood for factchecking at the Post might want to focus less on Reid and more on their own reporter. Here Montgomery tries to argue that people get more out of Social Security than they put in:

The average worker spends 20 years drawing benefits. A quarter will see their 90th birthday.

As a result, the average retirees have gotten back far more in federal benefits than they paid into the system during their working life, according to research by Eugene Steuerle, a senior fellow at the Urban Institute. That return is diminishing, in part because people today have paid more into the system than previous generations. But a two-earner, middle-income couple retiring this year can expect to get $913,000 in Social Security and Medicare benefits over their lifetimes, in return for $717,000 in payroll taxes.

Did you catch that? Montgomery switches gears from talking about Social Security to talking about the media's favorite underfunded safety net program, SocialSecurityandMedicare. Why? Because the research she's citing shows that the couple in question pays in more than it receives in benefits.

People who read the Washington Post know this--from a January 3, 2011, piece about this Urban Institute report:

The same hypothetical couple retiring in 2011 will have paid $614,000 in Social Security taxes, and can expect to collect $555,000 in benefits. They will have paid about 10 percent more into the system than they are likely to get back.

Montgomery needs readers to know that there are no politics involved here: "No crystal ball is necessary to predict Social Security’s future. Hard numbers tell the story." That's a pretty rich assertion coming from someone who's writing such a dishonest article.

Somewhat unhelpfully, deep into the article readers are told:

Social Security can pay full benefits through 2036. Once the trust fund is depleted, the system would rely solely on incoming taxes, and benefits would have to be cut by about 25 percent across the board.

Well that doesn't sound like much of a crisis anymore, unless you believe the money in the trust fund won't be paid back to taxpayers. Which is what Montgomery seems to be warning, since the alternatives are apparently so dire:

The $2.6 trillion Social Security trust fund will provide little relief. The government has borrowed every cent and now must raise taxes, cut spending or borrow more heavily from outside investors to keep benefit checks flowing.

As Baker pointed out, this process is exactly what the government does when someone redeems bonds. The challenge for Social Security bashers is to turn these events into a crisis--and demand that citizens accept the idea that the government should not pay them back what they are owed.

Tea Party Makes News--Even With Nonsense

Tuesday, October 18th, 2011

Today the New York Times (1/18/11) reports a big scoop.

A "Tea Party commission" convened  by Freedom Works is set to announce its crowd-sourced $6 trillion debt reduction plan--"A copy of the preliminary findings was provided to the New York Times," Kate Zernike reports.

The story's second paragraph critiques the plan from the right for not doing enough about Social Security and Medicare, which Zernike asserts "are two of the biggest contributors to the nation's deficit." This is not true, especially when it comes to Social Security--but corporate media prefer to have discussions of the deficit that bash Social Security.

The larger problem is why this proposal is being covered at all. Even Zernike's account suggests that it doesn't really add up:

FreedomWorks says that repealing the healthcare legislation would cut $1.2 trillion, but the Congressional Budget Office has projected that repealing the legislation would actually increase the deficit by $210 billion over the next 10 years.

It's useful to recall how the People's Budget of the Congressional Progressive Caucus was treated by outlets like the New York Times. This was a serious plan put forward by legislators and endorsed by several high-profile economists.  And it couldn't get into the news section of the New York Times. But this thing can.

Rick Perry, Social Security Straight Shooter?

Monday, September 19th, 2011

A Washington Post story on Sunday (9/18/11) argues that many recipients of Social Security aren't really paying attention to what the GOP presidential front-runners are saying about Social Security. The real story, then, is what kind of narrative the candidates are trying to establish. As reporter Amy Gardner puts it:

In many ways, it doesn't matter to the candidates whether people are attuned to what they are actually saying about Social Security. For them, the issue is instead serving as a proxy for the narrative each is trying to establish about himself.

For Perry, standing by his brash statements on Social Security--he has called it a "Ponzi scheme" and a "monstrous lie"--presents a chance to show that he's a straight-shooter unafraid to confront the nation's toughest challenges.

"I don't get particularly concerned that I need to back off from my factual statement that Social Security, as it is structured today, is broken," Perry said in an interview published in Time magazine last week. "If you want to call it a Ponzi scheme, if you want to say it's a criminal enterprise, if you just want to say it's broken--they all get to the same point. We need, as a country, to have an adult conversation."

This is actually a great illustration of a terrible problem with political reporting. How candidates are using policy discussions to frame their candidacies is actually much less important than whether what they're saying is nonsense.

Perry's Social Security claims are wildly misleading. Press coverage should explain that to readers (and, you know, voters) instead of talking about how his inaccurate claims means he's a "straight-shooter."

What Do You Call a Guy Like Rick Perry?

Friday, September 9th, 2011

Frontrunner-of-the-moment Rick Perry is getting a lot of press for his performance at the recent Republican debate--especially because he's standing by his belief that Social Security is a "monstrous lie" and a Ponzi scheme, and that climate change is an untested theory advanced by corrupt, discredited scientists.

You can call such ideas a lot of things. "False" or "untrue," for example, would work. But a lot of reporters characterized Perry's performance in positive terms. In today's New York Times (9/9/11), Michael Shear writes that Perry

made clear in his first national appearance that he would campaign as an unabashed Southern conservative who is unafraid to speak bluntly, would double-down on controversial statements and planned to shrug off the concerns of the Republican establishment.

Shear later added that "Perry did not back down Wednesday night from his assertion that Social Security was a failure, even in the face of direct criticism by Mr. Romney."

"Unabashed," "unafraid," not backing down--these are all more or less positive descriptions.

Likewise, on NBC Nightly News (9/8/11), Andrea Mitchell said: "Perry proved he could throw a punch and take one. And he was unapologetic about attacking Social Security as a monstrous lie."

So he's not only a fearlessly blunt speaker, he's also an unapologetic punch-thrower. This is the kind of coverage the Perry campaign would probably pay for. Yes, there are pieces here and there that point out that, you know, Social Security isn't actually a massive scam. On the other hand, Washington Post liberal Ruth Marcus writes today (9/9/11): "On the substance, Perry’s point about Social Security-as-Ponzi scheme has some grounding in reality." She gets around to criticizing him, but that's a lot of ground to cede to a falsehood.

As Greg Marx notes at CJR,  the media designation of certain pieces as "factchecks" is strange because one might logically conclude that run-of-the-mill articles don't dwell on checking the facts of politicians (a conclusion that would largely be a correct one). He points to a CBS News piece on Perry and Social Security that quotes other Republicans disagreeing with his stance. Readers are apparently being asked to believe either Karl Rove or Rick Perry on the issue. That's a lot to ask of anyone.

WaPo Misleads on Dem's 'Super Committee' Picks

Wednesday, August 10th, 2011

Senate Majority Leader Harry Reid has named his picks to the "super committee" charged with making deficit reduction recommendations.

Reid named Washington Sen. Patty Murray and center-right Max Baucus, who the Post's Rosalind Helderman today (8/10/11) calls a "natural choice," given that he chairs the Finance Committee. The New York Times is a little more helpful, pointing out that Baucus

broke with other Democrats and supported tax cuts enacted in 2001 under President George W. Bush. He also worked with Republicans in 2003 to pass legislation that added a prescription drug benefit to Medicare.

This is important for anyone who thinks that the tax cuts and drug benefit contributed greatly to the deficit problem.

Reid also picked Massachusetts' John Kerry, about whom the Post writes:

Kerry comes as something of a surprise, since he has focused more closely on foreign relations. However, as a respected former presidential candidate, his selection could help appease liberals.

I'm not sure how Kerry would "appease liberals."  In this particular case, the main issues are protecting Social Security and Medicare. And as of Sunday on Meet the Press, Kerry's view on that was that

the real problem for our country is not the short-term debt. We can deal with that. It's the long-term debt. It's the structural debt of Social Security, Medicare, Medicaid measured against the demographics of our nation.

It's not clear how picking someone with that misleading perspective is supposed to "appease liberals."

Barney Frank Questions the Questions at NPR

Wednesday, August 10th, 2011

It's an article of faith in mainstream media discussions of the budget: Social Security and Medicare are the "entitlements" driving our debt problems. That's not really true, but that's overwhelmingly the starting point for these discussions. Occasionally, perhaps by accident, someone questions that assumption.

That's what happened on NPR's Morning Edition on Monday (8/8/11), when Rep. Barney Frank (D.-Mass.) was interviewed by Steve Inskeep about, among other things, the entitlement burden.

Read what happened--or listen to the excerpt below:



INSKEEP: Congressman, if I can, we've just got a few seconds. You have mentioned defense spending. You've mentioned tax increases. Those are two areas of disagreement. The biggest part of the federal budget is entitlements...

FRANK: No, wrong. I'm sorry. The Defense budget is bigger than Medicare, and Social Security is, in fact, self-financing, still is.

INSKEEP: Let's stipulate for this conversation: a very, very, very, very, very big part of the budget is entitlements. Democrats are seen as resisting cuts. Is your side--in a couple of seconds--going to appoint people to the special committee who are ready to make a deal?

FRANK: I am not going to tell an 80-year-old woman living on $19,000 a year that she gets no cost-of-living, or that a man who has been doing physical labor all his life and is now at a 67-year-old retirement--which is where Social Security will be soon--that he has to work four or five more years.

But I disagree with you that in terms of draining on the budget, Social Security is largely as self-financed...

INSKEEP: OK.

FRANK: ...and the military budget is larger than Medicare. So demonizing entitlements and saying that--in fact, here's the deal...

INSKEEP: Congressman, I really have to cut you off there. But I do...

FRANK: Well, I wish you wouldn't ask these complicated questions with five seconds to go.

INSKEEP: We'll come back and bring you back for more. Always a pleasure to talk with you.

Action Alert: David Gregory Misinforms on Social Security

Tuesday, August 2nd, 2011

Amid tough competition from his corporate media colleagues, Meet the Press host David Gregory has stood out as a journalist who has consistently misinformed the public about the impact of Social Security and other entitlement programs on the deficit. To find out how he's been wrong and to tell him to correct his errors, see FAIR latest Action Alert.

Please use the comments thread of this blog post to leave copies of your messages, or to discuss the alert.

Debt Ceilings and the 'Balance' Bias

Tuesday, August 2nd, 2011

There's been plenty written about how reporters skew reality by treating "both sides" as equally intransigent or inflexible when it comes to the budget deficit battle.

Another example, from the L.A. Times today (8/2/11):

For Republicans, it was preventing any tax increase to upper-income families.

For Democrats, it was ensuring no cuts to Social Security, Medicaid and a handful of other programs that aid the elderly and the poor.

And for Obama, it was getting a deal that would end the threat of an economy-shaking default until after the 2012 presidential election.

None of the key players was willing to go all out to actually solve the nation's long-term financial problems. As a result, the deal doesn't.

The implication of course, is that opposing cuts to Social Security and Medicare is in some way comparable to opposing any tax increases anywhere under any circumstances. This glosses over the fact that the Bush tax cuts played a large role in creating the current deficit problem. And it evades the fact that it is certainly possible to fix the budget problem without cutting Social Security and Medicare. It is much more difficult to imagine how to do the same without raising revenues.

But the real lesson we must be taught over and over again is that both sides are to blame for not fixing the nation's problems.

Or consider this exchange from the July 31 NBC Nightly News:

BRIAN WILLIAMS: Andrea, you've seen them come and seen them go. This has hardly been a profile in courage. Have you ever seen anything like this?

ANDREA MITCHELL: I actually never have. We've had crises before, political crises. We've had in our lifetime 9/11, Katrina, other national emergencies, tragedies. And in one case or another, in all of those cases one branch of government at least, if one failed, the other would step in. In this case, all branches of government, our entire government seems to be dysfunctional. And it's even questioning in people's minds the checks and balances that was the genius of the framers because now it's stalemate, it's gridlock.

It's hard to know what to make of this. On one level, you sense that Beltway fixtures like Andrea Mitchell have so much invested in the status quo that they cannot fathom how or why the system cannot produce even the appearance of 'bipartisan compromise' they find so important to a functioning democracy. That's the crisis.

More concretely, one has to wonder what she thinks should have been done differently by one of the branches of government. The White House backed a "compromise" that gave Republicans much of what they wanted. They balked and demanded more--which they got. If she means that the Republicans were unusually resistant to compromise, she should just say that--and not blame it on "checks and balances."

Robert Samuelson: We Have Met the Enemy, and He Is Old

Friday, July 29th, 2011

When your column is headlined "It's the Elderly, Stupid," I guess readers should know what to expect. Robert Samuelson delivers in today's Washington Post (a column that will appear elsewhere around the country, unfortunately), in a nasty diatribe about the kind of debt debate he thinks the country should be having--one that blames older people:

Older Americans do not intend to ruin America, but as a group, that's what they're about. On average, the federal government supports each American 65 and over by about $26,000 a year (about $14,000 through Social Security, $12,000 through Medicare). At 65, the average American will live almost 20 more years. Should these sizable annual subsidies begin later and be less for some? It's hard to discuss the budget realistically if you ignore most of what the budget does.

The Social Security money they're stealing is theirs, of course--taken out of their paychecks over their entire working lives. What Samuelson is proposing--if he really wants to discuss the budget realistically--is that they should get less of their money back in order to maintain tax cuts for the rich.

Medicare is different, in large part because  healthcare costs really have increased dramatically. That's someone's fault--apparently old people's.

Samuelson goes on to writes about the "contradiction" between people's desire to do something about deficits and their belief that Social Security and Medicare shouldn't be cut. Which isn't a contradiction at all; people support reducing spending in other areas, like the military, and raising revenues via tax hikes on the wealthy. But here's his case:

What sustains these contradictions is a mythology holding that, once people hit 65, most become poor. This justifies political dogma among Democrats that resists Social Security or Medicare cuts of even one dollar.

But the premise is wrong. True, some elderly live hand-to-mouth; many more are comfortable, and some are wealthy. The Kaiser Family Foundation reports the following for Medicare beneficiaries in 2010: 25 percent had savings and retirement accounts averaging $207,000 or more; among homeowners (four-fifths of those 65 and older), three-quarters had equity in their houses averaging $132,000; about 25 percent had incomes exceeding $47,000 (that’s for individuals, and couples would be higher).

So to say "most" old people are poor is wrong--and to prove that, he shows that some older people aren't poor at all.

Go to the Kaiser report he's citing, and you get a very different impression.

From the key findings:

-Half of all Medicare beneficiaries had incomes below $22,000 in 2010; less than 1 percent had incomes over $250,000.

--Half of all Medicare beneficiaries have less than $2,100 in retirement account savings (such as IRAs), and half of all Medicare beneficiaries have less than $31,000 in other financial assets (such as savings accounts)

But why focus on the average Medicare recipient when you can isolate the wealthiest and decry all seniors for their plan to "ruin America"? What Samuelson is saying that "we need to recognize that federal retiree programs often represent middle-class welfare." What he actually seems to be saying is that there is inequality--rich people are getting richer. There are ways to redistribute that wealth in order to pay for everyone's healthcare. But something tells me that's not what he's advocating.

The Brave World of Boehner/Obama Bipartisanship

Friday, July 15th, 2011

Media love the "middle" in politics--where leaders of the two major parties come together to find common ground, renew the national spirit and/or live up to the ideals of the Founders. Time magazine (7/14/11) has a soppy piece about Barack Obama and Republican leader John Boehner's attempt to reach a budget deal.

Those efforts--some of which happened in secret--are, according to reporters Jay Newton-Small and Michael Scherer,

the story of two self-described dealmakers in a town where dealing is often a synonym for surrender, who ran up against the limits of their roles, their powers and their colleagues. Boehner and Obama have gotten credit for thinking big and working to overhaul outdated economic policies. But they waited too long to start, in part because they didn't take the time to get to know each other years ago. They also misjudged their armies: They rode out to rescue the country, only to watch many of their followers run for the hills.

They explain how the pair came up with the idea to use the debt ceiling as a lever for a budget deal in order to

freeze out their respective extremists and make the kind of historic deal that no one really thought possible anymore--bigger than when Reagan and Tip O'Neill overhauled the tax code in 1986 or when Bill Clinton and Newt Gingrich passed welfare reform a decade later.

You got it-- each side has its crazies that prevent great things from happening. Obama tried to freeze the left-wing extremists, and Boehner has.... well...I guess the upshot, according to Time, is unfortunately all the extremists balked; the left wouldn't cut Social Security benefits, the right wouldn't make wealthy people pay any more in taxes:

The Republican refusal to consider any new revenues, including making easy fixes to the tax code to close loopholes for businesses and other groups that don't need public subsidies, is as recklessly absolutist as Democrats' insistence that bloated entitlement programs are untouchable.

Protecting Social Security benefits (average monthly check: $1,177) is just the same as protecting corporations from paying higher taxes. That makes sense only in The Sensible Center that the Beltway media have concocted.

NYT Quotes a Social Security Defender, Only Bashes Him Indirectly

Friday, June 17th, 2011

A New York Times piece (6/17/11) on Social Security actually quotes a defender of Social Security--but as that source notes, "the context looks designed to refute me."

In a story about the AARP suggesting that maybe Social Security benefits will have to be cut, the Times' Erich Lichtblau writes:

But other advocacy groups that are pushing to preserve Social Security benefits accused AARP of effectively abandoning its core constituency.

Doug Henwood, the Brooklyn editor of a liberal business blog and Internet radio program who has written on Social Security, said AARP's willingness to consider cuts in benefits "reads like a sign that this former lobby for the interest of older Americans has now transformed itself completely into an insurance company." He continued, "Surely they can’t be persuaded by the merits of the arguments, since the alleged Social Security crisis is a phantom that can’t survive a serious round of factchecking."

The most recent estimates from the Social Security Administration, issued last month, indicate that under current law the program's trust funds will be exhausted by 2036, and that $6.5 trillion in additional money will be needed over a 75-year period to pay all scheduled benefits.

In other words, it can too survive a serious round of factchecking!

Or maybe not so serious. Is it nicer to assume that New York Times reporters can't use calculators, or that they count on their readers not being able to? That enormous $6.5 trillion number, divided by 75 years, gives you the not-so-enormous sum of $87 billion--a figure no one would blink an eye at if you suggested it was necessary to subdue some possibly terrorist-harboring rebels in Central Asia. This amount should be even less daunting in 2036, when it will begin to be required, and will likely be rather trivial in 2111--assuming things keep going on in the future roughly the way they have in the past, which is a necessary assumption to make if you're going to pretend that making economic projections for a century in the future is in any way a meaningful endeavor.

WaPo Invents Dems' Social Security Split

Friday, March 25th, 2011

The Washington Post's Lori Montgomery has what sounds like a pretty important story in today's paper (3/25/11). 

The headline:  

Democrats Splinter Over Strategy for Reducing Deficit
Battle Lines Drawn as More Are Willing to Put Entitlements on Table

The piece leads off:

Democrats are sharply divided over whether to tackle popular but increasingly expensive safety-net programs for the elderly, particularly Social Security. 

According to Montgomery,  a "growing number of Democratic lawmakers say they are willing to consider controversial measures such as raising the retirement age and reducing benefits for wealthier seniors."

That would be big.  Who are they? She tells us who they aren't:

But senior lawmakers such as Senate Majority Leader Harry M. Reid (Nev.) and Sen. Charles E. Schumer (N.Y.) are lining up against them, arguing that tampering with Social Security would harm the elderly--as well as the political fortunes of Democrats hoping to maintain control of the White House and the Senate in 2012.

OK--that's not them. And then there's this:

And House Democrats this week signaled their intention to use Social Security as a cudgel in next year's elections by launching an ad campaign accusing 10 GOP lawmakers in swing districts of plotting to cut the program.

Not them, either. So where is this split, exactly?

Meanwhile, Third Way, the centrist Democratic think tank, plans to release a memo Friday arguing that the deficit has emerged as an uncommonly powerful political issue and that 2012 voters will reward the party that takes bold action to restrain government spending--including overhauling Social Security, Medicare and Medicaid.

Well, that's not really noteworthy at all--it's exactly the sort of thing a right-leaning, corporate-funded Democratic think tank would say. What else?

Democrats have traditionally defended the program, but even some liberal lawmakers now say changes in the benefit structure are required. Last week, 32 Senate Democrats joined 32 Senate Republicans on a letter in support of a broad-based deficit reduction effort that includes changes to entitlement programs.

That letter is a rather bland call for Obama to engage more forcefully on deficit reduction--certainly not evidence of a "sharp divide."

She also adds:

Since the program's creation in 1935, the cost of Social Security benefits has been entirely covered by payroll taxes paid by current workers. This year, however, payroll tax revenues are projected to fall $45 billion short of covering benefits, and the problem is projected to grow as the number of retirees balloons compared with the number of working adults.

As Dean Baker points out, there have been other years when taxes did not cover benefits; the suggestion here is that this is something new. And, of course, the program's massive trust fund surplus, which is money the Social Security system loaned to the U.S. Treasury, was designed to deal with precisely this situation. By calling it a "problem" for the trust fund surplus to be used for its intended purpose, Montgomery is suggesting that it would be better if the Treasury didn't pay back its debts--which is an odd position for the Washington Post to take.

Chris Christie's Not Telling the Truth--Ugly or Otherwise

Friday, February 18th, 2011

New Jersey Republican Gov. Chris Christie is the object of intense devotion among some on the right (Glenn Beck in particular). No surprise, then, that he'd get a lot of attention for going to Washington and delivering a stern lecture about how to fix the deficit. And no surprise that he'd talk about Social Security. It has nothing to do with the deficit, but that's another matter.

Washington Post columnist Dana Milbank was on hand to cheer on Christie's message (2/16/11). Christie pokes fun at his weight, which apparently makes his truth-telling even more appealing:

But his physique also works to his advantage by reinforcing Christie's appeal as something other than the blow-dried politician who says whatever the voters want to hear. Christie isn't pretty, and he tells ugly truths.

And what was this ugly truth? The need to cut Social Security benefits. As Milbank put it, Christie is brave enough to "to scold both parties in Washington for their failure to talk about what must be done to solve the debt crisis. " He writes:

Christie, however, is talking about it. "You're going to have to raise the retirement age for Social Security," he said. "Whoa-ho! I just said it, and I'm still standing here. I did not vaporize into the carpeting, and I said it."

Now for this to be any kind of truth--ugly or not--it has to be, well, true. As Matthew Yglesias pointed out:

Closing the projected actuarial gap in Social Security requires some combination of more immigration, higher taxes and lower benefits. Relative to higher taxes, lower benefits tend to be preferred by richer people. And of all the different ways to reduce benefits, raising the retirement age is the one that does the most to punish the poor and demands the least sacrifice from the rich.

Robert Reich, who was once a Social Security trustee, wrote a column laying out a much easier fix--raising the cap on income subject to the Social Security tax, which in 1983 was designed to hit 90 percent of income. It no longer does that, because rich people have gotten substantially richer. Reich writes:

If we want to go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000.

Presto. Social Security's long-term (beyond 26 years from now) problem would be solved.

So there's no reason even to consider reducing Social Security benefits or raising the age of eligibility. The logical response to the increasing concentration of income at the top is simply to raise the ceiling.

If Christie's "ugly truth" isn't true, why does Milbank think it is? It might be because he has a record of Social Security scaremongering, writing a column in 2007 warning that Social Security was going to be "insolvent" due to the retirement of the Baby Boomers.  His response to FAIR's criticism was that he was writing about the combined effects of Social Security and Medicare--which is problematic on an entirely different level.

Chris Christie wasn't speaking the truth. But he was sending the same kind of message that people like Milbank want to hear: that workers should get benefit cuts in order to preserve tax cuts for the wealthy. It's ugly, but it's not the truth.