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Rep. Chris Shays R

Rep. Chris Shays (R) of Connecticut is very much in the president's handful on phasing out Social Security. Here's a Charlie Cook article that discusses Diane Farrell and whether she'll decide to challenge Shays again in 2006.

Farrell held Shays to 52% of the vote last November. And as Cook rightly notes, "despite her 2004 loss, Farrell is one of the strongest challengers her party could field in 2006."

Here's Farrell's campaign website from last cycle. And here's her bio.

Financial services industry types notwithstanding, how popular is phase-out in Connecticut? How about in Bridgeport? And in any case, most people who really understand and respect financial markets realize this is a lousy idea anyway. After all, Bob Rubin and John Corzine are both on the right side. And I hear Goldman does some financial services work.

Speaker Denny Hastert R

Speaker Denny Hastert (R) of Illinois: "You can't jam change down the American people's throat."

That and more in the Chicago Tribune's interview with Hastert and his discussion of the problems the president is having selling phase-out to congressional Republicans and the American people.

A stumble after a

A stumble after a run of good Social Security news articles from the Post.

On A3 today, Michael Fletcher discusses the part of the president's pitch in which he argues that shorter lifespans make Social Security a bad deal or unfair to African-Americans.

Down into the piece Fletcher mentions some of the key critiques of this argument -- the disproportionate benefit African-Americans get from the survivors' and disability portions of Social Security, as well as the program's progressive benefit structure, which also gives a disproportionate benefit to people with low-incomes.

What goes wholly unmentioned is that the way lifespan statistics are used in this argument is inherently misleading.

African-Americans have substantially shorter lifespans than whites -- a fact the president seems concerned about primarily, or perhaps exclusively, as an argument for phasing out Social Security. The argument being that African-Americans don't have as many benefit-collecting years as whites and thus get a worse 'rate of return' on their payroll contributions.

The problem with this argument is that most of the difference in lifespan is tied to death in childhood and early adulthood -- before people have any ability to pay substantial amounts into Social Security and at ages when Social Security survivor benefits are particularly important.

(The issue is discussed in this Paul Krugman column from January 28th.)

This fact receives no mention in the Post article.

Rep. Rick Renzi R

Rep. Rick Renzi (R) of Arizona: "We need to know how we can fund it. I'm going to wait and see how we balance the budget and fix Social Security before committing to his plan to create private accounts."

Only just barely; but that gets him into the Conscience Caucus.

The New York Times

The New York Times has one of the first mainstream news pieces I've seen about 'Jeff Gannon' that takes the issue seriously as a hard news story rather than just a 'media story' or a bias piece.

Of particular interest, to me at least, is just how 'Gannon' managed to have access to classified documents relating to the Plame matter. It's not uncommon for journalists to get hold of classified materials. But given the dynamics of that story and how much the White House was gunning for Wilson, it's awfully odd that he would have had this stuff come into his hands for what could at all be called journalistic reasons.

Given all these questions about credentialing and pseudonyms, I'm also curious how 'Gannon' was credentialed at the Republican National Convention, though the RNC certainly has every right to credential whomever they choose, with whatever name they want to go by.

As fate would have it, I sat next to him in the press stands during President Bush's convention speech last September.

I didn't know who he was; he didn't know who I was. And that was probably a good thing all around. (I only found out his story when I looked him up later on the web, after what ended up happening; my recollection is that he gave me his card.) But that didn't stop it from being a surreal experience. Through some sort of double karmic inversion, the women sitting to my left -- 'Gannon', appropriately enough, was on my right ... God not only has a sense of humor, it seems; he is also well-organized -- turned out to be one of the protestors in the hall who lept to her feet mid-speech, tossed on a pink slip and began denouncing the president for about 1.32 seconds before being manhandled out of hall by some security guard who seemed to materialize out of nowhere.

I wrote about it that evening. The 'journalist' mentioned briefly at the end of the post is 'Gannon'.

(ed. note: If you're new to this story, this is the go-to blog.)

Finally someone sticks up

Finally, someone sticks up for Rep. Allen Boyd (D) of Florida, Dean of the Fainthearted Faction.

A letter to the editor in today's Tallahassee Democrat ...

Social Security has always been considered the third rail of American politics. This year, President Bush as made it clear that the time has come for an honest, straightforward, and realistic discussion about its future.

I commend District 2 Congressman Allen Boyd for his conviction to stand up to those in his own political party and do what is right for the future of Social Security.

Yes, he is a Democrat and I am a Republican and the former chairman of the subcommittee on Social Security in Congress. In politics there is always a temptation to kick the can down the road and hope that problems might disappear. That is not how Congressman Boyd views his job.

He knows that the longer we wait to address the coming crisis, the more difficult and expensive the job will be down the line. So in this new term, along with Boyd's leadership, we will save Social Security for all time, and put it on a path to permanent solvency and stability.

We will need bipartisan commitment in the months ahead. Both parties will be tempted to use Social Security as a political football. Yet, we should all recognize that playing politics with Social Security is playing politics with the future of our children and our grandchildren.

CLAY SHAW U.S. Rep., R-Fort Lauderdale


Shaw, as it happens, has had a few flirtations with <$NoAd$> the Conscience Caucus.

(ed.note: A note of thanks to TPM reader GA for the catch.)

Its not an official

It's not an official pronouncement exactly. But my friend Ed Kilgore is the policy director of the DLC. And here are his comments about Howard Dean becoming the Chairman of the DNC.

A few days ago

A few days ago I mentioned that an Associated Press story reported that Rep. Heather Wilson (R) of New Mexico opposed President Bush's Social Security privatization plan.

This story, which ran in her district on the 7th simply says: "GOP Rep. Heather Wilson says she's opposed to Bush's plan because she's against investing Social Security taxes in the stock market."

Yet looking at the specific wording of the story and earlier iterations of the same report, I came to the conclusion that Wilson may have bamboozled the reporter in question in an effort to mislead her constituents.

For instance, a more complete version of the AP report, which ran on Sunday, February 6th, reads like this ...

Rep. Heather Wilson, R-N.M., echoed Democrats' opposition to Bush's plan, saying she opposes efforts to invest even a portion of Social Security revenues in private accounts.

"I don't believe the government should invest Social Security taxes in the stock market," said Wilson, who represents New Mexico's Albuquerque-based 1st Congressional District.


The problem is that this 'government shouldn't invest in the stock market' line is right out of the GOP privatization flimflam playbook. It sounds like opposition to private accounts; but it's not. Privatization supporters don't believe the government should invest in the stock market. They want individuals to do so in their private accounts.

So Wilson, it seemed, was using fingers-crossed, fudging language to bamboozle not only the reporter but her constituents too. And my suspicion in this regard was heightened by the fact that Rep. Wilson's constituent mail on Social Security is filled with the same rhetorical razzmatazz.

The key graf from her constituent mail reads (emphasis added) ...

I have remained firm on my core beliefs about Social Security. There must be no changes in benefits for retirees or near-retirees. That wouldn't be fair to people who need to know that their check will arrive on time and in full. The government should not invest Social Security funds in the stock market. I oppose privatization of our safety net. Payroll taxes should not increase, and we must preserve Social Security disability and survivor's benefits.


Wilson clearly had the playbook open when she (i.e., a staff aide) wrote this email, since to anyone who isn't as obsessed with the Social Security debate as TPM, it sounds like Wilson opposes privatization. And yet, <$NoAd$> given what we've told you recently about the rhetorical gymnastics on this issue, she can say those words and mean she supports carving private investment accounts out of Social Security, i.e., the Bush plan.

In any case, this is where we left things in our last post back on the 6th. So the only thing to do was to call up Wilson's office and find out whether she really was opposing the president's plan or not.

Only that proved a difficult proposition. This week I placed repeated calls to Rep. Wilson's offices in Washington and New Mexico and left voice mails, in Washington and Albuquerque, explaining that I had some follow-up questions about the AP story that placed Wilson in opposition to the president's plan. And yet my calls were never returned. I kept trying. But no luck. Along the way I also placed repeated calls to her Washington spokesman's cell phone. But no luck there either.

I tried the DC office and the cell phone again today with no more success. And then late this afternoon it occurred to me that the problem might be unique to my phone. So I picked up my new New York cell phone and tried one more time.

Bingo.

I finally got Rep. Wilson's spokesman, Joel Hannahs, on the line.

I read Hannahs the following line from this AP story: "GOP Rep. Heather Wilson says she's opposed to Bush's plan because she's against investing Social Security taxes in the stock market." And I asked what it was about the president's plan she opposed.

Hannahs replied that he would "let her words speak for themselves."

I then pointed out that they weren't her words. This was the AP describing her stance. And I was trying to find out whether it was an accurate description.

Does she oppose the president's plan?

Hannahs then told me: "I don't have any comment."

As you might imagine, from that point, the call came to a rather rapid conclusion.

Now, given Hannahs' reticence about disclosing Rep. Wilson's position on this issue, it's still hard for me to say definitively that she's bamboozling her constituents about her position, since her position seems to be a secret. But now I'm awfully suspicious. (Consider that Wilson's office has apparently made no effort to correct the AP story if it is in error.) And my phone exchange with Hannahs makes me think my suspicions are very well founded.

The Center for American

The Center for American Progress has just released a new study detailing one of the more technical but also very real problems with the president's plan.

Regardless of what rate of return one estimates for private accounts over the longterm, in the real world, the rate of return is not a straight line. There are long bull markets, long bear markets, as well as sudden shifts in the stock market in one direction or another.

"While the real rate of return of the stock market has averaged 6.6 percent over the past 100 years," the study notes, "its average rate of return over 35-year periods has fluctuated between 3 percent and 10 percent." That of course does not take into account that you specifically have to cash out at a specific time, i.e., when you retire, and that could come in a trough.

(I say you're forced to do so because under the president's plan you have to use your account to purchase an annuity when you retire.)

What all of this boils down to, of course, is that whatever the average rates of return over time, some folks will do a lot better than others. Some will end up doing poorly enough that they simply won't have enough to support themselves in retirement. And there will be immense -- probably irresistible -- political pressure to at least bring those folks up to the survival level, if not up to a generous benefit. Needless to say, the government isn't going to be able to take the high earnings of the lucky folks to make up for the shortfall of the unlucky folks. So where does the money come from? It's another cost of the whole plan -- though not one it's proponents will make any mention of. Those costs are treated in this study. And the author of the study says they'll amount to another "$600 billion and $900 billion in present value terms to the costs of privatization over the next 75 years."

One other point: Above I used the terms 'lucky' and 'unlucky'. In normal private investing we recognize a substantial element of chance and unknowables. But we don't consider the whole matter an issue of luck or no luck since people make decisions about how much risk they're willing to shoulder, where they want to invest, which companies they think are winners and which aren't, and when they choose to cash out. But as the president's plans have emerged, it's become clear that the range of options you will have is quite limited, as is what you can do with it when you retire. And that means that whether you end up in one of the lucky 'cohorts' or the unlucky ones depends overwhelmingly on what year you were born in.

So using the language of 'luck' applies even more than usual.

Of course, this whole discussion of how you even out the peaks and troughs in market cycles for individual persons and separate generational cohorts only gets us back to why it makes sense to have the element of risk borne not by the individual or groups of people born in the same year, but by society as a whole. And that's what we have now with Social Security.

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