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More on the WaPo's Social Security myopia.

Yesterday we noted the Post's Social Security editorial in which the well-heeled Posties agreed that deep cuts in benefits were surely a good thing and that ...

If workers aren't happy with a pension that, while generous in relation to the living standards of their younger years, feels stingy in relation to their earnings immediately before retirement, they can, if not in the lower brackets, save privately to supplement their Social Security benefit; if healthy, they also can postpone retirement.


This editorial is the sort of historical document <$Ad$>that makes you want to go back and reread each of Mike Lind's books from the early 1990s about politics and political economy -- which is always a good thing to do in any case. But for the moment let's go back to the editorial board's myopia.

The authors observe that recipients, instead of whining about the cuts, should simply save more on their own -- as long as they're "not in the lower brackets."

Now, there aren't that many tax brackets. In fact, if memory serves there are now six federal tax brackets -- 10%, 15%, 25%, 28% 33% and 35%. For next year, the upper three brackets are for joint-filing couples making making $120,000 a year and up and individuals who make over $72,000.

By inference, this must be the class of whiners the Post is addressing since these are the folks who are "not in the lower brackets." Does the Post really think that these high-income earners are the folks this debate is about? Or the folks for whom Social Security represents a critical component of their retirement security?

Later, the editorialists argue that the "poor" should receive unspecified "special protections" from the benefit cutting.

But does anybody seem like they're left out of this picture? Right, the overwhelming majority of Americans in those lower three brackets who spend their lifetimes making middle-class wages -- Bill Clinton's folks who 'work hard and play by the rules.'

They aren't 'poor'. So they wouldn't qualify for the "special protections" (i.e., old age welfare) that the Post advises. And they rely on the Social Security they've been paying into all their lives as a key protection against having to become poor in their retirement years.

They're just not in the Post's field of vision.

Here is one of

Here is one of many comparisons and observations we'll be making to provide some counterweight to the White House's efforts to deceive the American people about Social Security.

The Social Security Trustees estimate that over the next 75 years the program faces a budget shortfall of $3.7 trillion.

As we've noted previously and will again, the Trustees use a very pessimistic estimate of future economic growth to arrive at that figure. But, for the moment, let's stipulate to that amount.

$3.7 trillion is a lot of money.

But how much will the president's Medicare drug benefit plan cost over the next 75 years?

$8.1 trillion, say the Trustees of that program.

And over the next 75 years how much will the president's 2001 and 2003 tax cuts cost if made permanent, as the president wants?

$11.6 trillion.

So you add that up and you get $3.7 trillion we need to cover Social Security's shortfall and $19.7 trillion we need just to cover the costs of the two major domestic policy initiatives of the president's first term.

And yet Social Security, says the president, is in crisis and destined to chew through the rest of the federal budget.

(These statistics are noted in this budgeting summary from the Center on Budget and Policy Priorities.)

I would submit to you that in any reasonable universe this simple comparison shatters the president's credibility on fiscal 'icebergs' and spending crises. And yet these basic facts seem to garner little notice.

That is because, in the last couple decades, in the culture of Washington -- particularly among the elite commentators and reporters (just watch Meet the Press) -- presuming that Social Security is financially unviable has become an ready shorthand for public policy seriousness, much as many use a basic knowledge of imported wines or a familiarity with classical music to signal refinement.

This is something the president is exploiting. And the defenders of Social Security must find ways to overcome it.

The Hill on House

The Hill on House Democrats placing pressure on Fainthearted Faction member Collin Peterson of Minnesota. This article, meanwhile, notes that the big committee-assignment loser this year in the Wisconsin delegation was Faction member Ron Kind.

On the other side of the aisle, among others, we're watching Jo Ann Emerson of Missouri, a member of the Shays Handful.

The rest of the Republicans from Missouri are either endorsing the Bush phase-out plan or suggesting they're inclined to support it. But Emerson is, conspicuously, doing neither. "We ought to get the budget back in balance and restrain spending, quit spending money like drunken sailors, and then look at where Social Security is when we’ve done that," she told the Associated Press.

8 on Jim Cramers

#8 on Jim Cramer's list of ten business predictions for the coming year (in New York magazine ...)

8. The president will ram Social Security “reform” through Congress by getting brokerage houses to lobby for the change.
George Bush will promise Goldman Sachs, Morgan Stanley, Schwab, Lehman Brothers, and Bear Stearns the contract to privatize Social Security and let them be the administrators of the project. These firms will then get their employees to give millions to politicians who are on the fence. Their stocks will triple in value from the prospect of the new business, they’ll pressure the Republican-led Congress for swift passage in the fall of 2005, and the deal will get done.


Certainly, part of the plan.

The Washington Post editorial

The Washington Post editorial board buys into the Social Security 'crisis' logic; then opts for the Goldilocks middle path. Broderism ascendent?

A special moment from the Post editors on learning to love inflation indexing ...

"If workers aren't happy with a pension that, while generous in relation to the living standards of their younger years, feels stingy in relation to their earnings immediately before retirement, they can, if not in the lower brackets, save privately to supplement their Social Security benefit; if healthy, they also can postpone retirement."

Reader mail ...Josh -Youve

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

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

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

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.

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