Posts Tagged ‘Lori Montgomery’

GOP's Amazing Revenue-Reducing Tax 'Hike'

Wednesday, November 16th, 2011

The general line in corporate media coverage of the so-called "Supercommittee" tasked with coming up with a long-term budget plan is that both sides aren't willing to budge: Republicans won't agree to raise taxes, and Democrats want to protect "entitlements" like Social Security and Medicare.

While some might find the idea of Democrats standing up for Social Security and Medicare, it's not really true--Democrats have offered to make such cuts if there are some tax increases to go along with them. This insistence that a compromise involve a compromise has been depicted, oddly enough, as a refusal to compromise.

But things got slightly more confusing when it was reported that the Republicans had broken their anti-tax stance, and were putting a $300 billion revenue increase on the table. In the Washington Post, Lori Montgomery's piece led with this:

Congressional Republicans have for the first time retreated from their hardline stance against new taxes, offering to raise federal tax collections by nearly $300 billion over the next decade as part of a plan to tame the national debt.

That is big news. In the New York Times (11/9/11):

Republicans, long opposed to tax increases, said Tuesday that they might allow $250 billion to $300 billion of additional tax revenue as part of a deal to shave $1.2 trillion from federal deficits over the next 10 years.

One slight problem: The GOP tax increase is, it turns out, a massive tax cut for wealthy Americans. As Steve Benen noticed (Political Animal, 11/9/11):

Way down in the same article, in the 16th paragraph, the piece gets around to mentioning that Republican want to trade nearly $300 billion in new revenue for "permanently extending the George W. Bush-era tax cuts past their 2012 expiration date, a move that would increase deficits by about $4 trillion over the next decade."

That's the kind of detail that more or less debunks the article’s headline and lede. Think about it: as part of a debt-reduction deal, Republicans want to increase tax revenue by less than $300 billion and cut tax revenue by roughly $4 trillion.


This bit of trickery is still being misreported--in today's Post, for instance:

Some conservatives in the Republican House majority said they could not support the latest GOP offer to raise taxes by as much as $300 billion over the next decade as part of a broader deal to cut spending. The offer marked the first time Republicans other than Boehner have proposed raising taxes above current levels.

Readers had to keep reading several paragraphs to learn that this tax increase is actually part of a massive tax cut--bringing the top rate down to 28 percent.

Perhaps the most bizarre exchange on this topic came on Sunday's Meet the Press, where NBC host David Gregory insisted that his own reporting should be trusted over the word of Democratic Rep. Debbie Wasserman Schultz of Florida:

GREGORY: They did agree for tax increases that Democrats have not accepted this week. But I want to ask you about, specifically, about the debt.

SCHULTZ: Well, no, no, no.... Come on, David, that was not a serious proposal. What they proposed was, you know, reducing the number of itemized deductions in exchange for a passage, an extension of all the Bush tax cuts, which actually would've resulted in less revenue and brought the overall top tax rate down to 28 percent. So that was not a serious proposal. We need a serious proposal that balances the revenue the super committee generates and the cuts.

GREGORY: All right. Well, there was new revenue that was proposed, but I realize that's still a subject of debate. But let me, let me focus...

SCHULTZ: That would result in less revenue overall.

GREGORY: Let me--well, again, that's in dispute, according to my reporting on that.

It would be of great value to the country--and to the GOP--if Gregory could explain what his investigation turned up.

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.

WaPo and the People's Budget Blackout

Friday, May 20th, 2011

Lori Montgomery has a piece today in the Washington Post (5/20/11) noting that Senate Democrats have yet to unveil a budget plan that would "counter the budget blueprint approved last month by House Republicans."  Some Democrats do say that they will soon unveil a plan that "would offer a sharp contrast to the GOP budget."

Such a contrast exists already in Congress. It's called the People's Budget, and it is the work of the Congressional Progressive Caucus. The most notable coverage of it in the Post came in the form of a red-baiting Dana Milbank column. The news pages of the Post, like most other papers, has chosen to ignore a budget plan that is politically inconvenient to them. Thus the debate over how the government should deal with debt/deficit problems omits one very real policy solution.

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.

WaPo Profiles Most Awesome Guy in World

Monday, February 28th, 2011

In journalistic parlance, a "beat sweetener" is a story that lavishes praise on a powerful figure the reporter is assigned to cover on a regular basis--a great way for that reporter to get in good with an important source. That may have been what was happening with Lori Montgomery's February 26 Washington Post piece touting the deficit-busting greatness of White House budget director Jacob Lew. Under the headline "Jacob Lew Returns to Work on Fixing Nation's Finances, Again," she begins:

At 27, Jacob J. Lew helped save Social Security. At 41, he helped cut a deal to balance the federal budget. During the Clinton administration, he became the only White House budget director in a generation to banish deficit spending.

In a city suddenly crawling with would-be deficit-busters, even some Republicans recognize Lew as the real deal.

About the only real criticism is reserved for Barack Obama, whose budget is called "deficit-ridden." Lew leads a team that is apparently universally loved:

As a group, they are viewed by people in both parties as pragmatists with a track record of inspiring trust on both sides of the aisle. Lew, in particular, seems to have few enemies, not much ego and a reputation for focusing on the demands of the deal.

Readers also learn that Lew is "tall and dark" and "exudes a calm geniality." As Dean Baker titled his post at his Beat the Press blog, "Doesn't Anyone Have Anything Bad to Say About Jacob Lew?" Apparently not.

WPost News Report: Deficit Commission Shuns Ideology

Thursday, December 2nd, 2010

In today's Washington Post (12/2/10), in the news article "Deficit Commission Sets Ideology Aside," reporters Lori Montgomery and Brady Dennis explain why the commission is not ideological:

Confronted with a deficit-reduction plan loaded with political dynamite, members from both parties set aside ideological orthodoxy at least briefly, sparking hope that their work could ignite a serious effort to reduce government debt and spare the nation from a European-style fiscal crisis.

But the notion that the deficit is one of the most pressing issues facing the country-- "The Moment of Truth" is the title of the commission's report--is profoundly ideological to begin with.

Though the commission and the Post reporters treat the necessity of  reducing the deficit as a sort of universally understood truth, many economists do not agree, arguing that the spending cuts that deficit-cutting would entail would further decrease demand in an already demand-starved economy.

By embracing deficit-cutting ideology to the exclusion of the views of many dissenting experts, instead of showing  that the commission has put aside ideology, the Post reminds once again how deeply  ideological our corporate media can be.

At WPost, Everyone's a 'High Earner'--When It Comes to Benefit Cuts

Thursday, October 21st, 2010

Rep. Paul Ryan is the Republican leader most often touted as a serious policy wonk.  His plan to "fix" Social Security was recently evaluated by the chief actuary of the Social Security Administration. As the Washington Post notes in an article today (10/21/10), Ryan's plan "would slice initial benefits by about a quarter for middle-income Americans who turn 65 in 2050."

So why is the Post's headline "Republican Rep. Ryan's Social Security Plan Would Cut Benefits for High Earners"? While it is true that the wealthy would see benefit cuts, it would seem more important to note how his plan would affect most people.

Economist Dean Baker (Beat the Press, 10/21/10) further points out that by comparing benefits under Ryan's plan in 2050 with benefits today--rather than with the benefits retirees are currently scheduled to get in 2050, which are 48 percent larger than today's--the Post is greatly understating the scale of the cuts. And Ryan's proposal to raise the retirement age to 70 will cut everyone's benefits, not just "high earners"--however you define them.

According to the Post article, by Lori Montgomery, "With congressional elections less than two weeks away, the Ryan plan has been a frequent target for Democrats accusing the GOP of plotting to gut Social Security." The Post seems determined to disguise the fact that these accusations have a great deal of truth to them.

Larry Summers, the 'Anti-Business' Hedge Fund Director

Wednesday, September 22nd, 2010

The New York Times' Sheryl Gay Stolberg (9/22/10), writing about "brusque and brilliant economist" Lawrence Summers stepping down as President Obama's chief economic adviser, cited House minority leader John Boehner's charge that "Mr. Obama's team lacked 'real-world, hands on experience,' a direct shot at Mr. Summers' career as an academic." She followed this by writing, "News of Mr. Summers' departure set off speculation that Mr. Obama would replace him with a corporate executive to counter the impression that he is anti-business."

The Washington Post's Lori Montgomery (9/22/10) reported similarly, "Sources said the White House is considering whether to choose a candidate who could blunt criticism that the administration has been anti-business, such as a corporate chieftain or prominent investor."

This suggestion that Summers represents an "anti-business" strain of economic thinking is absurd. While it's true that most of his career has been spent in academia and government, prior to joining the administration he was working as a managing director at DE Shaw, a gigantic hedge fund that paid him $5.2 million for his services in 2008.  In the same year, he collected $2.7 million in consulting fees from other financial firms, including Goldman Sachs, JP Morgan Chase, Citigroup, Lehman Brothers and Merrill Lynch. Clearly Wall Street was not turned off by his "anti-business" attitudes.

This background was rehearsed just yesterday in a New York Times blog post (DealBook, 9/21/10), which noted that "Mr. Summers has often been criticized for his close ties to the financial sector and dubbed a conduit for Wall Street to influence the White House." Such criticism does not seem to have been noticed by Stolberg.

After citing Obama's praise of Summers, Montgomery at least notes that "congressional Republicans--and some Democrats--have been more critical of Summers' tenure." But she goes on to say that Boehner accuses the White House "of pursuing misguided economic policies that ran up record deficits without creating jobs or significantly improving the economy"--a view, Montgomery says, that is rejected by "many prominent economists."  The complaints that "some Democrats" have about Summers are left unspecified, the idea that there is anything "anti-business" about Obama's Wall Street-friendly economic adviser goes unrebutted.

More Social Security Bashing from NYT, WashPost

Wednesday, June 9th, 2010

In a June 8 piece about a liberal summit in D.C. this week, the New York Times notes that the left's support for programs like Medicare and Social Security are out of touch with fiscal reality, and that budget cuts elsewhere aren't going to matter much:

In truth, none of the cuts in annual appropriations will significantly reduce the long-term deficit projections. Those are driven mostly by escalating costs for the benefit programs that liberals most aggressively protect--Medicare, Medicaid and Social Security--and by insufficient tax revenues to support them.

As has been noted many times, Social Security has amassed a surplus of over $2 trillion; that plus the expected revenue from Social Security taxes will keep the program solid for the next 25 years. Medicare is in much worse shape; why the two should be talked about together as if they are comparable drains on the federal government is unclear, unless one wants to associate Social Security with Medicare's more severe problems.

For an illustration of the difference, see this graph from the Center on Budget & Policy Priorities:

The Washington Post's Lori Montgomery, meanwhile, goes after Social Security's "defenders" today (6/9/10), who have given a "sinister cast" to the White House's deficit commission, accusing it of having "a secret plan to gut Social Security." Social Security advocates are using "heated rhetoric" and are "threatening to rally the public against" benefit cuts, which is seen as an "ominous sign"  for the commission.

Of that group, Montgomery writes, "Adjusting Social Security benefits is a likely point of consensus, commission members say."  By "adjusting," she presumably means "cutting" in some form. So it's "ominous" that Social Security's "defenders" are pointing out this reality about the deficit commission.

Like the Times piece cited above, the Post portrays the issue as simple mathematics: "Budget experts say it would be difficult to significantly reduce future deficits without addressing the rising cost of Social Security."

The Post lays out the argument in favor of Social Security's viability:

The program's defenders argue that there is no crisis: If Treasury would repay billions of dollars in surplus Social Security taxes borrowed over the years, the program could pay full benefits through 2037. But many budget experts question whether supporting the existing benefit structure should be a cash-strapped nation's first priority.

So "experts" are on the side of the Post, while "defenders" are out to protect the status quo. As if to reiterate that point, the next graph quotes an analyst at the Heritage Foundation about the "intellectual consensus" on his side.  As Dean Baker notes at Beat the Press, this is in effect saying that the government should default on the portion of its debt held by the Social Security trust fund. That would be a rather radical idea--misappropriating trillions of dollars collected from working people that were to supposed to go to support the retired elderly, and instead using them to keep down tax rates for the wealthy--but one can count on outlets like the Post to portray it as a necessary solution offered up by the "experts."

Washington Post (Again) on the Debt Revolt

Thursday, May 27th, 2010

Last week the Washington Post informed us that voters are "up in arms over the mounting federal debt"-- and thus politicians were being forced to scale back a new bill that would, among other things, extend unemployment benefits and send money to state governments facing serious budget shortfalls. This made little sense, since polls do not show public urgency about the debt or deficit; in fact, dealing with jobs is considered a much higher priority.

No matter. The Post has a piece today (5/27/10)--by the same reporter, Lori Montgomery--that begins, "Under fire from rank-and-file Democrats worried about the soaring national debt..." No such Democrats are quoted in the piece. Republican leader Mitch McConnell complains that, when it comes to the debt, "Democrats only seem interested in making it worse." Democrats Steny Hoyer and Harry Reid are said to believe the bill will pass, but do not believe they will muster much--if any--Republican support.

So the Post started by telling us that voters were "up in arms" over deficit spending. Now we're told that many Democrats feel the same way. In neither case does the Post give us much of a reason to believe this is true.

The Post Stands Up for the Poor Rich

Monday, April 27th, 2009

Today the Washington Post devoted front-page real estate to an examination of how some wealthy people who don't think of themselves as wealthy will suffer under Obama's proposed tax plans. Their primary example is Gail Johnson, who, along with her husband, earns about $515,000 in a typical year from the chain of preschools and after-school programs they own:

"You hear 'tax the rich,' and you think, 'I don't make that much money,' " said Johnson, whose Rainbow Station programs are headquartered near Richmond. "But then you realize: 'Oh, if I put my business income with my wages, then, suddenly, I'm there.' "

The piece claims that, under Obama's plan, Johnson's federal taxes would increase by 19 percent, or $23,000.

As economist Dean Baker points out, Johnson's situation "would describe that of less than 1 percent of all small business owners, so it is difficult to understand why such a person would be prominently featured in an article on President Obama's tax plans."

The Post piece goes on to note that "Republicans argue that those who fall into the upper brackets tend to be firms with the greatest capacity for job creation"--a claim which, as Baker writes, contradicts extensive economic analysis.

Also interviewed for the piece are the chief lobbyist for the U.S. Chamber of Commerce, a VP at the National Foreign Trade Council, Republican Sen. Charles Grassley, and two other small business owners likely to pay more in taxes under Obama's plan--all critics of the plan, except for the last small business owner, tacked on at the very end as the Post's apparent effort to distinguish its reporting from pure PR for the wealthy.

Post writers Lori Montgomery and V. Dion Haynes report that Johnson says she and her husband actually take home "substantially less" than their taxable income, and that potential tax increases would face her with a difficult choice:

"You can try to pass it on to consumers. But if you raise tuition, you put pressure on family budgets," she said. "For us, we're caught between the devil and the deep blue sea."

Or, gee, maybe you could try to get by with a post-federal tax income of $372,000 a year instead of $395,000.

Jim Murphy, the other critical small business owner interviewed, "said his accountant estimates that Obama's proposals could add $60,000 to his $120,000 tax bill."

"Said his accountant estimates"? Is this what passes for reporting at the Washington Post? Apparently so, at least when the coverage is of the embattled upper class.