Reader mail ...

Josh -

You've mentioned Social security as insurance, previously, but I think the point deserves more emphasis. Reducing social security benefits and replacing (some of) the lost benefits with private investment accounts is still gambling EVEN if the accounts earn a relatively optimistic rate of return, and EVEN if the accounts are limited to conservative investment options. The reason why private investment accounts are RISKY is because people don't know how long they will live. Someone living to (say) 95 is going to do much worse with private investments, simply because the privately invested money is going to run out well before they die.

The scam here (on the part of those trying to sell private investment accounts as a substitute) is that they (implicitly) are talking about what someone who lives to the AVERAGE lifespan will be getting. But half (or so) of retirees are going to live LONGER than average. This half will either have to withdraw money more slowly (live less well) [and how will they be able to predict this?] or will exhaust their private investment accounts long before they die.

So with private accounts, those who die early end up with some (or much) of their money going to the heirs, and those who die late end up (potentially) in poverty. Only the hypothetical "average" person (the one who dies at an average age, having exactly exhausted his/her private investments at exactly the right time) is going to do as well as any "predicted" outcome for private investment accounts<$NoAd$>.

JB

It's insurance.

The Times today has an article running-down the Armstrong Williams flap. Like others, they relate this incident to the earlier instances in which the same PR company -- Ketchum -- produced phony news segments for the Departments of Education and Health and Human Services.

One passage of the article, however, suggests that the government-funded phony news segment phenomena is not new and that, if anything, the Clinton administration did even more of it than the Bush administration.

Thus ...

But public relations executives said that the government distribution of prepared news segments without on-air disclosures of their origin was a bipartisan practice that predated the Bush administration.

"The Clinton administration was probably even more active than the Bush administration" in distributing news segments promoting its policies, said Laurence Moskowitz, chairman and chief executive of Medialink, a major producer of promotional news segments. After the Government Accountability Office decision last spring, he said, his firm began advising government clients to disclose each tape's nature in its script.

This passage appears to remove the partisan dimension from the story. Yet it provides no examples of similar <$Ad$>productions under the Clinton administration.

Moreover, it appears to elide the main distinction. The GAO study which found the Bush administration productions to have been illegal rested that judgment not on the failure to disclose their source explicitly but because of the tagline "this is Karen Ryan reporting," which ended each segment.

This, they reasoned, was not simply a failure to disclose, but a positive effort to mislead viewers into believing they were watching a news report rather than a government-produced public service announcement.

(Bush administration officials were eventually able to produce for GAO at least one example of a Clinton HHS VNR which also used the 'reporting' tagline.)

Another point worth noting is the source for the Times' claim that this was done as much or even more under the Clinton administration, Laurence Moskowitz, CEO of Medialink, whose company is a major producer of these so-called VNRs.

He told the Times that it was only after the GAO's May 2004 ruling that "his firm began advising government clients to disclose each tape's nature in its script," thus implying that this was a more rigorous standard that only came into application after the May 2004 GAO report.

Yet a May 24th, 2004 article in PR Week says that these disclosure requirements have long been an established standard embodied in the guidelines of the Public Relations Society of America. And indeed in that very article, Moskowitz himself is quoted as telling PR Week: "We have always subscribed to attribution and full disclosure in the script. The GAO ruling says that if you produce a video that is fully disclosed and appropriately attributed, you are within the proper use of federal money and, therefore, not in violation (emphasis added)."

Now that Armstrong Williams has recognized that his acceptance of a quarter million dollars to shill for the No Child Left Behind act was an instance of "bad judgment" on his part, it is presumably only a matter of time till he mounts the pulpit of Larry King Live and announces his decision to undergo a full-fledged program of journalistic ethics recovery, presumably under the guidance of some such worthy as Rabbi Shmuley Boteach, Dr. Phil, or perhaps, if he turns out to need a truly thorough journalistic dunking, Tom Rosenstiel.

But once we get past Williams himself, how about this?

Everyone has quickly and rightly connected the Armstrong Williams story to earlier instances where the administration used government funds to produce pro-Bush political propaganda. There were the phony news segments produced for the Department of Education to push the No Child Left Behind Act, similar phony news segments produced for HHS to push the new Medicare law, and the Department of Education ratings system devised to rate how different news outlets ranked on No Child Left Behind act orthodoxy and the Republican party's commitment to education.

But there's something else that links all these instances together. They were all contracted through one PR firm: Ketchum.

I don't know anything about the company. Just on a lark, I looked up the political giving of the CEO, Ray Kotcher, and noticed that until 2004 he -- and what appears to be his wife -- seemed to give exclusively to Democrats. In 2004, he had a change of heart, however, and gave $15,000 to RNC. Perhaps it was the war on terror. Who knows?

In any case, with talk of investigations already in the air and House Republicans consenting at least to one of the Williams deal, perhaps a way to narrow the focus would be to simply find out which other branches of the government Ketchum was working for and what services they provided.

Late Update: A little more digging.

There seems to be relatively little reporting on the Kentchum dimension of all these instances of the Bush administration's taxpayer-funded political propaganda. So it's hard to see just who at Ketchum or which divisions of the company were doing the work for the administration. But you'd figure it'd be their Public Affairs branch or their Washington lobbying shop.

It turns out that a big part of Ketchum's Washington operation is something called The Washington Group. TWG was founded in 1997 by three former Democratic Hill staffers. But Ketchum bought them out back in 2001 -- actually two days after President Bush's first inauguration, on January 22nd. And in the spirit of the times, Ketchum quickly began trying to help TWG bulk up on its Republican connections. In October, for instance, former Congresswoman Susan Molinari was installed as President and CEO of TWG, in order to provide the firm's clients with what Ketchum CEO Ray Kotcher described, it would seem rather presciently, as "a strong campaign-style approach to public affairs."

A year and a half later, Carlos Bonilla joined TWG as a senior vice president after leaving his post as special assistant to President George W. Bush for economic policy. "Carlos Bonilla," said Molinari when Bonilla signed on, "brings an invaluable combination of White House policy and D.C. politics to The Washington Group." In January 2004, Molinari was appointed President of Ketchum Public Affairs, a post she continues to hold in tandem with her job as CEO of TWG.

In the week since Bob Matsui's untimely death, I've tried to separate the painful issue of his passing from our aggressive coverage of the emerging Social Security fight.

But Matsui was and would have been central to this fight, as the Democratic point-man on Social Security. So his passing means Democrats, or specifically House Democrats, must decide soon who will lead the charge against the president's Social Security phase-out plan -- in terms of strategy, message and, very importantly, as their public (i.e., media) voice on the issue.

Now, I was a bit distressed yesterday when I saw Rep. Ben Cardin of Maryland, who was next in line in seniority to Matsui on the House Ways and Means Social Security Subcommittee, quoted on the Bloomberg wire on President Bush's phase-out plan.

Saith Bloomberg ...

Representative Ben Cardin of Maryland, a senior Democrat on the Ways and Means Committee who is being courted by Republicans to support the accounts, said he would find it difficult to support the plan if its impact on the deficit, which reached a record $412 billion last year, isn't reflected in the budget.

"If he doesn't show how he's going to pay for it, then it's not a credible proposal from the point of view of, I think, most Democrats,'' Cardin said.

Now, I don't know about you. But that struck me as a tad equivocal. On its face, Cardin simply seemed to say that he couldn't support a phase-out bill if its costs weren't accurately reflected in the budget. But most Democrats stand in a rather more fundamental opposition -- as in opposing any phase-out plan, and especially one that will require adding one or two trillion dollars in debt.

I'm sure Cardin will come around to the right position. But it's not exactly a rousing defense of the program. And if Republicans even have the slightest inkling that they can turn the Dems' Social Security point-man over to the phase-out option, as Bloomberg suggests, something must be seriously amiss.

On the other hand, just one notch below Cardin on the subcommittee is Rep. Earl Pomeroy of North Dakota.

To the best of my recollection I've never met Pomeroy or spoken to him. But a friend of mine who knows this issue and the House very well tells me that Pomeroy not only has a deep belief in Social Security but also a deep and nuanced understanding of the program. He's also someone who can make a reasoned but also determined and persuasive case for preserving Social Security for the future. As I've said a hundred times already, party unity is critical on this issue, as is organizing. But at the end of the day they are a means to an end. And that end is persuading Americans across the country the defenders of Social Security are right on this issue and President Bush is wrong.

[An added plus with Pomeroy is that he comes from a really red state, but seems eager for this battle to protect Social Security. It is important to demonstrate clearly that whatever may be case with other issues, Social Security isn't an issue that Dems from conservative or rural districts need to run away from. In fact, I think quite the opposite.]

In any case, Pomeroy seems like the guy for the job. Not the only one, mind you. There's plenty of work to go around. And -- God forbid -- I'm not saying anyone should leapfrog the seniority queue. But he should be front and center on the Dems' Social Security team and conspicuous on the shows. Not doing so might be a really big mistake.

This is interesting. The Democratic Party of San Fernando Valley, a coalition of 24 Democratic clubs located in or partly in the Valley [i.e., the suburbs on the northwest side of LA], just passed a resolution against President Bush's Social Security phase-out plan. And as part of their resolution they resolve "not [to] endorse or support financially any Democratic candidate who expresses support, advocates for, or votes for such a plan."

Sounds like they're pretty clear on where they stand.

From a reader ...

Question: who else has been on the payroll?

They sank a quarter of a million into one not so prominent commentator to push a single issue -- not even one where they really needed help -- and they never greased anyone else? Not so credible.

Anyway, just asking . . .

Best,

JRT

Itsy witsy bitsy privatization<$NoAd$>?

Wolf Blitzer questioning Treasury Secretary John Snow on the president's phase-out plan, which recent reports say will divert as much as 30% of revenues into private accounts (emphasis added) ...

In terms of legislative strategy, do you envisage the Social Security reform that the president is proposing, the little partial privatization of Social Security, for that legislative battle to precede the tax simplification battle, if in fact, there is a battle? Or to be simultaneous? These two issues coming before the Congress around same time.

Perhaps there'll be an Olympic competition for egregious mimickry of the White House party-line. Of course, Armstrong Williams couldn't compete, since he's already gone pro ...

[ed.note: Special thanks to TPM reader LS.]

A new statement from Sen. Feinstein of California on private accounts: "I strongly oppose private accounts, which could cost $1 trillion or more and still fail to improve the financial condition of Social Security. Unless I see a proposal that protects the fiscal health of Social Security and does not dramatically increase the national debt, I will continue my opposition."

Here would be some time very well spent.

We've noted before that the "on hold" recording that now plays when you call the Social Security Administration includes thinly-veiled Bush administration propaganda about Social Security's insolvency and the need for "long range changes" in the program, and the sooner the better. Similar verbiage is now contained in the mailings that the SSA sends out to all Americans who pay into the system, describing their lifetime earnings and projected benefits.

And I'm told that this soft pro-privatization propaganda has been getting more pointed over the last three years, even as the actuaries at SSA have been reporting that the predicted Social Security funding shortfalls are receding further and further into the future.

So here's the idea -- one that takes on even more timeliness with the revelations today about the administration and Armstrong Williams: why not prepare a well-crafted FOIA request to the SSA requesting any and all documents relating to the preparation and authorship of the increasingly pro-privatization boilerplate that appears and plays on the SSA's various mailings and phone recordings?

Go back to 2001 and bring it up until today.

Who will do it?

Courtesy of Atrios, this from USA Today ...

Seeking to build support among black families for its education reform law, the Bush administration paid a prominent black pundit $240,000 to promote the law on his nationally syndicated television show and to urge other black journalists to do the same.

The campaign, part of an effort to promote No Child Left Behind (NCLB), required commentator Armstrong Williams "to regularly comment on NCLB during the course of his broadcasts," and to interview Education Secretary Rod Paige for TV and radio spots that aired during the show in 2004.

Williams said Thursday he understands that critics could find the arrangement unethical, but "I wanted to do it because it's something I believe in."

I can't say I'm too exercised <$Ad$> one way or another about Armstrong Williams' professional ethics, or lack thereof. But taxpayer money for this? This sounds like it's clearly political work. Perhaps that fat Bush-Cheney campaign fund should reimburse the taxpayers. If the White House wants to fully fund Armstrong Williams instead of the NCLB bill, let them do it on their own dime.

PS. This also gets us back to the issue of OpEd payola, which we discussed back in March 2002 and at other times. This was a topic I was collecting information on for years, but so far at least never got around to writing. As I said in that earlier post, many more OpEds than you'd imagine are bought and paid for. At a few of the premium dailies it's hard to pull off. But beyond those it's pretty common, though often without the editors even being aware of it. There are even a few prominent papers known by those in the business to be an easy (and willing) mark.

A new member of the Senate's Fainthearted Faction: Sen. Blanche Lincoln of Arkansas.

Notwithstanding Sen. Arlen Specter's declared opposition to a private-accounts-based Social Security phase-out, Sen. Lindsey Graham is putting together a working group of six senators (seven, including Graham) "seek[ing] agreement on a bipartisan blueprint for shoring up Social Security, preferably before President Bush outlines his plan and partisan lines harden in Congress."

So reports Thursday's Wall Street Journal.

The six include 2 Republicans and 4 Democrats. And Graham is holding the meetings with the "encouragement" of the White House.

The Senators are Republicans Charles Grassley of Iowa and Judd Gregg of New Hampshire. The Democrats are Max Baucus of Montana, Blanche Lincoln of Arkansas, Joe Lieberman of Connecticut and Ben Nelson of Nebraska.

In March 2002, Sen. Lieberman called "privatization" a "dangerous mistake."

"Social Security privatization," he said, "would take away the safety from the safety net, and turn the idea of a rainy day fund into a sink or swim proposition."

"We understand Social Security's economic value and appreciate its moral value," he wisely observed, "and that we won't let it be diluted, dismantled or dissolved."

I couldn't agree more. And yet the president has made clear that any plan must include privatization, a private-accounts-based partial phase-out of Social Security.

So what is there to talk about exactly?

On October 21st 1998, when first running for senate, Sen. Lincoln called privatization "dangerous" and made opposition to it a key plank in her campaign.

So, again, what is there to talk about?

Why are we picking on Faction newcomer Sen. Lincoln and not Sen. Baucus, you ask?

Because Baucus seems to have bailed out. Notwithstanding his participation in the meetings, the Times reports Baucus "said on Thursday that he would oppose the president's Social Security plan this year."

In an interview with the Times, Baucus, who provided the president key support on the 2001 tax cut bill and the Medicare bill, said, ""I seriously doubt I'm going to be the linchpin this time ... [private accounts will] exacerbate the problem, not solve it."

Meanwhile, according to the Washington Post, a telling division is emerging between Senate and House Republicans.

While Senators like Chuck Grassley, Lindsey Graham and others believe the "White House should leave it to Congress to work quietly on a bipartisan Social Security package that is not explicitly the president's," House leaders are sending a very different message. According to the Post, they're insisting that "the president has to issue a detailed plan to restructure Social Security and add personal investment accounts, then sell it himself before he could possibly hope to get broad Republican support."

And what's the big difference between the Senate and the House? Right. The folks in the House all have to face the voters next year. Most in the senate don't have to for three or five years. And the president never.

And as long as we're on the subject, which party seems more divided over this issue?

Alberto Gonzales believes that the president can immunize individuals for committing acts of torture and that he has the power to authorize violations of criminal law. That's how Chris Suellentrop interprets what Gonzales said today on the Hill in Slate. And he makes a very persuasive case.

And this is the man who will soon be the highest ranking law enforcement officer in the land.

It defies comment.

Here's an overnight Associated Press piece entitled "Bush Pledges to Lead on Social Security." It has most of what you'd expect and then <$NoAd$> this ...

Though Republicans have increased their majority in both houses, changes would require clearing a hurdle of 60 votes in the Senate.

Underscoring that difficulty, Sen. Arlen Specter, a prominent Republican moderate, has expressed his opposition to cuts in promised Social Security benefits for future retirees

"I strongly oppose this approach," Specter says in a letter on his official Web site. The Pennsylvania Republican did not state a position on investment accounts.

No position on private accounts? Try digging a little deeper. As we reported earlier today, Sen. Specter has taken a very definitive position on privatization and private accounts: He's against them.

In the penultimate graf of the letter his office is currently sending out in response to queries from constituents, Specter writes ...

On the issue of privatization, I had some time ago considered an idea to place a relatively small portion of benefits in an investment account, providing that the “security” aspect of Social Security was retained and the investment was under professional management. However, with the severe fluctuations of the stock market, I have since rejected that idea.

And this is as you'd expect since this is the position he clearly enunciated during the campaign this year when he was running against Rep. Joe Hoeffel. As he said at the WTAE-TV debate in Pittsburgh on October 2nd, according to the AP ...

"At one time I had considered a small portion of Social Security in private accounts," Specter said during the hourlong debate at the WTAE-TV studio in Pittsburgh. But after a closer examination, "I think it is unwise," he said. "I believe the seniors ought to be reassured that their Social Security benefits are solid."

So notwithstanding the report in tonight's AP piece, I think Sen. Specter is being quite clear on his opposition to private accounts. He stated his opposition during the heat of the campaign. And he's making the point now even more clearly in the letter he's sending constituents, now that he doesn't have to face voters against for another six years, if then even. As Specter himself says, he has "rejected" the idea of private accounts.

This just keeps hanging out there. Part of the package in the complete evisceration of the House ethics rules, which the Republicans planned but then pulled back from passing, was canning Joel Hefley (R-CO) as Chairman of the Ethics Committee.

Hefley oversaw the serial admonishments of Rep. Tom DeLay. He disagreed with the DeLay Rule. And he thought the 'reforms' the House GOP caucus finally backed off passing were a bad idea. "This is not the way to effect meaningful reform. Ethics reform must be bipartisan and this package is not bipartisan," said Hefley.

So now the DeLay rules gone. And the ethics 'reforms', or most of them, are gone. But Hefley, well ... the grammatical symmetry doesn't work perfectly, but he's still gone too.

But there's a hold up, says the Post. No, there's no question that Hefley's out of there. But they can't make it official yet because Denny Hastert can't decide who to replace him with. "Hefley has fallen out of favor with GOP leaders and is not trusted by them to handle ethics cases that Democrats might bring against Republican lawmakers, according to aides," says the Post.

And the Post continues ...

One Republican official called Hefley's ouster "a defense measure." Aides said they did not know when the new chairman would be announced. By midweek, Hastert's staff had compiled a list of about 40 candidates.

A list of 40 candidates, eh? Sounds like they want someone really, really, really reliable. Defense measure, indeed.

A note from a reader ...

There are $1.8 trilliion <$NoAd$> in U.S. Treasury securities in the U.S. Social Security Trust Fund. It is imperative that the Democrats ask Bush whether he intends to honor that obligations and force him to make a public proclamation of his steadfast commitment to do so. The Democrats must take the lead in committing themselves to honor those obligations.

The Social Security Trust Fund is in fine shape with that $1.8 trillion dollar surplus.

It's the taxpayers obligation to the Trust Fund, (and the rest of the accumulated national debt that is the problem).

The Federal government should be paying down debt (not running $412 billion deficits) so it will have the borrowing capacity to pay off the obligations to the Trust Fund.

PRN

Not a bad idea. And the point the reader makes in the last graf is something everyone who is sane and can use a calculator should agree with. Come to think of it, that's what we were doing before George W. Bush became president ...

We're all familiar with the many blogs that follow the rough storms of national politics. But there's also an efflorescence of blogs that devote themselves to the politics of a particular state or city. I just heard today, for instance, about a new blog called Hall Monitor, run by the Time Argus/Rutland Herald Statehouse bureau chief, Darren Allen. In other words, if you want to follow Vermont politics, that'd probably be a good place to start.

Obviously, Allen is a professional newsman. But, just as on the national level, there are also a great number of passionate and committed amateurs who've set up their own sites to follow and/or affect politics in their neck of the woods.

Micah Sifry wants to set up a directory of these state and local blogs. So if you have one, or know of a good one, stop by here and drop him a line.

As we've said again and again, we're following the doings and shenanigans of the Fainthearted Faction for a very specific reason: we want all Democrats lined up in opposition to the president's Social Security phase-out bill, because that raises the stakes and puts the focus on those Republicans who might be scared to help phase-out Social Security without a good bit of bipartisan cover.

We don't want to assume only cynical motives. Some probably just don't want to be part of ending Social Security. And as we wrote late last month, that's why we're calling them the Conscience Caucus.

The concept is the same as the Fainthearted Faction, only inverted: these are the Republicans who seem most likely to leave President Bush waiting at the altar when he comes a'courtin' with his Social Security phase-out plan.

Now, we're pretty confident that the Caucus is going to be a good deal larger than the Faction. And many of those members are going to be reps. and senators who have their fingers to the wind and eyes on the polls seeing what looks safe and what doesn't. But today we've got a senator who seems to have committed himself to opposing the president's plan even before the whistle gets blown.

In response to constituent queries about his position on Social Security, Sen. Arlen Specter of Pennsylvania just started sending out an email outlining his position. In the email he professes his support for the program, his enchantment with the lockbox and various other points.

But the heart of the note is contained in two paragraphs (emphasis added) ...

As the baby boomer population ages and enters into retirement, the need for Social Security reform becomes even more apparent. Federal Reserve Chairman Alan Greenspan urged Congress in February of 2004 to deal with the country’s escalating budget deficit by cutting benefits for future Social Security retirees. I strongly oppose this approach.

...

On the issue of privatization, I had some time ago considered an idea to place a relatively small portion of benefits in an investment account, providing that the “security” aspect of Social Security was retained and the investment was under professional management. However, with the severe fluctuations of the stock market, I have since rejected that idea.

In the first graf quoted he rules out benefit cuts and in the second, unless I'm missing something, he categorically rules out privatization, i.e., private investment accounts funded by a carve-out from Social Security revenues.

So that's pretty much it. Specter isn't just in the Caucus. As long as he sticks by what he says in this letter to constituents, he's out of play completely for the president.

(Hold on to that Chairmanship with both hands, Arlen.)

The first member of the Republicans' Conscience Caucus makes it official. Check back soon.

A short note on Fainthearted Faction methodology.

First off, a great number of you are writing or emailing or calling your representatives and senators to express your concern or displeasure about their willingess to join with President Bush in phasing-out Social Security. And I know from direct knowledge, because I'm hearing from staff from many of those offices, that what you are doing is having a concrete, immediate and positive effect.

The following will be repetition for many of you. But let me take a moment to reiterate what gets folks in the Fainthearted Faction.

The list is not a list of people who have endorsed the president's plan. To the best of my knowledge, there is only one member of congress -- Rep. Allen Boyd of Florida's 2nd District -- who has endorsed the president's plan -- specifically, the version he is cosponsoring with Rep. Jim Kolbe (R-AZ). The Fainthearted Faction is made up of those senators and representatives who appear most likely to go along with the president in phasing-out Social Security.

Some in the House got on the list because of their vote against the Filner Amendment in 2001 -- a proxy vote on the privatization issue. Others are on the list because of their stated willingness to consider phasing-out Social Security. And in each case they are there because, as the debate has gotten underway, they've declined to make any clear and definitive statement that they plan to oppose the president's phase-out plan.

It's not a perfect science. There's judgment involved. But we've put in a lot of effort and consulted a lot of sources, both public and private, to focus in on this group. And we think it gives a good sense of whose votes are in play.

I'm very optimistic that most of these folks will finally end up opposing the president's phase-out plan. But as I noted last night and in other posts, for saving Social Security it is far, far more important that they go on record with their opposition now then a month, or six months or a year from now. And the reason they will do that is because they hear from their constituents who tell them that their equivocation on such a vital issue is something they find unacceptable.

Believe me, it is making a big difference. And it could scarcely be more important.

Okay, enough of my preaching. Just wanted to make that all clear.