Josh Marshall

Josh Marshall is editor and publisher of TalkingPointsMemo.com.

Articles by Josh

Lots of news today in the Senate's Fainthearted Faction.

First, the good news.

According to Ron Brownstein's piece in the LAT, both the DLC and Third Way "expect to issue statements soon opposing Bush's push to divert part of the Social Security payroll tax into accounts that individuals could invest in the stock market."

As I've hinted previously, I expected the DLC to come out against the president's plan. But I had real concerns that Third Way would play ball on the phase-out. And in this case I couldn't be happier to be proven wrong.

I'll be curious to see the fine print on their statement. But that's certainly a very welcome development since now it seems clear that every major Democratic policy group from the most leftish labor-liberals to the newest New Dems are united in believing that the Bush Social Security phase-out plan is bad policy for America.

Before proceeding, a side note: Democrats have plenty of things more important to do right now than to fight amongst themselves. And I know a lot of readers of this site have strong suspicions or negative feelings about the DLC -- in some cases because of very real policy differences. But members of a coalition party have to strive to celebrate moments of agreement at least a bit more than they rush to clamor over the inevitable disagreements. So maybe take a moment to give these guys (DLC and Third Way) some encouragement for doing the right thing.

On the other hand, notwithstanding what the policy wonks are saying, we've got some definite additions to the Senate's Fainthearted Faction.

First off, what strikes me at least as a surprise. California's Dianne Feinstein. Say it ain't so? Tell me about it.

Feinstein sent out a letter today to a number of constituents who asked her whether she supported privatization and/or the president's Social Security phase-out bill. In that letter she says pretty much everything you can imagine except for anything remotely like answering the question.

The closest she seems to come is toward the end where she writes ...

Most policy makers agree that the rate of growth of this program, as well as the oversight of its expenditures, must be addressed to ensure its integrity and preservation. I am confident that if Congress works together, it is possible that Social Security can meet its long term commitments.

Who knows what that means?

But reading the tea-leaves I think it shows an openness to the president's plan. More to the point, though, she's clearly not willing to say she opposes replacing part of Social Security with private accounts. And that really means you're in the Faction by definition since the outlines and many of the details of the president's plan are already clear.

I should also note that I see a lot of these constituent letters and they're often ambiguous. So they have to be read in the context of a member's previous legislative record. In this case, we should note that Feinstein voted for the president's awful Medicare bill as well as his 2001 tax cut bill, which has played such a wonderful role in throwing the country back into major structural budget deficits.

So for all those reasons combined, Feinstein's in the Faction big time -- though why she feels the need to be when even the major centrist groups seem opposed to the president's approach and she comes from an ocean-blue state like California is beyond me.

Next up is Tom Carper of Delaware. He's refusing to rule out private-accounts-based Social Security phase-out plan. And he told the LAT: "For now, we should leave things on the table and have a debate about them."

So he's in the Faction.

Next up, is Evan Bayh of Indiana. He's refusing to say no to a phase-out. But here's what the LAT says about him ...

Still, many of the Democratic centrists are signaling that they might support private accounts only with conditions Republicans likely would find difficult to accept. Bayh said he would consider a private account plan only if it could "maintain the safety net, maintain progressivity (in benefits) and protect the taxpayers (from more debt)."

We should note that there are going to be Democrats who for reasons of temperament as much as ideology are not going to state opposition from the outset, but will set conditions -- such as these -- that seem to all but commit them to opposition. I think that's what Bayh's doing here. So he's in the Faction, but only just. Like Carper, he's one of the three senate principals in Third Way. So maybe their alleged statement of opposition will or already has swayed him.

(Keep in mind that Bayh thinks he can run for president one day. So I would think that the best way to encourage him is to make sure he understands that he will never get the Democratic nomination for president or vice president if he votes in the affirmative for a bill that dismantles Social Security.)

Next up, Joe Lieberman. The LAT also has Lieberman down as one of the group of senators who will not commit themselves to opposition to the president's plan. It also says that "Lieberman, with Sen. Olympia J. Snowe, R-Maine, is leading a group of moderates from both parties that have begun efforts to determine if they can reach a consensus position on Social Security reform."

Now, I've been given to believe that Lieberman is not going to stray on this issue. And a bit after the election he told the New Haven Register that the Bush plan "may well worsen the financial condition of the existing program ... Social Security is now on the verge of going into deficit. Our first responsibility should be to work together to ensure that we keep our promises to seniors and that Social Security's future is realistic and fiscally sound."

Still, at the end of the day, he's not willing to state clear opposition to the private accounts idea that he said he'd left behind back in 2000. So Joe, personal feelings aside, is in the Faction. And in any case, it's not like there's not someone to run against him in the primary in 2006. Widely-praised Connecticut Attorney General Richard Blumenthal would probably like to get into the big leagues at some point. And in that state, he'd probably win if he knocked Joe out in the primary.

At the end of the day, I figure Lieberman does the right thing on this one. Unlike Feinstein, who voted for the 2001 Deficit-Creation Act (aka Tax Cut), he voted against it. But we'll see.

On the House side, we heard signs from a few different sources today that Rep. Marion Berry of Arkansas may be getting ready to break out of the Faction. Yesterday he told Bloomberg: "The bottom line is the debt and the deficit and the current account deficit are so overpowering that it stands the chance of destroying this country economically ... 'The idea of compounding this by adding 1, 2, 3, 4 trillion dollars to the debt to do this doesn't seem to make sense.''

That sounds like he's saying that the president's new debt-spending spree is a no-go for him. But we'll see. For the moment we haven't seen anything specific on Social Security per se. So he remains in.

As we noted last week, Ron Kind of Wisconsin looks like he's only hanging on in the Faction by a thread.

And, finally, a constituent letter from Rep. Bud Cramer of Alabama seems to put him right at the top of the Faction.

So that leaves us with the current Faction membership list


Rep. Marion Berry (D-Ark) (OFO?)

Rep. Allen Boyd (D-FL) (L&P!)

Rep. Robert "Bud" Cramer (D-AL)

Rep. Harold Ford (D-Tenn) (*)

Rep. Ron Kind (D-Wisc) (OFO?)

Rep. James Moran (D-VA) (*)

Rep. Collin Peterson (D-MN)

Rep. Ike Skelton (D-MO) (*)

Rep. Adam Smith (D-WA)

Rep. John Tanner (D-Tenn)

Rep. Gene Taylor (D-Miss)

Senate (note: senate list is roughly in order of relative Faction-hood ...)

Ben Nelson (D-NB)

Dianne Feinstein (D-CA)

Tom Carper of (D-DE)

Evan Bayh (D-IN)

(Say It Ain't So) Joe Lieberman (D-CT)

Associate Members

Gov. Ed Rendell (D-PA) (*)

(ed.note: 'L&P!' designates members who are "Loud and Proud!" in their support of the president's phase-out bill. "OFO?" designates members who may already have "One Foot Out" of the Fainthearted Faction. Linked asterisks (*) note events, statements or stories that have affected a member's position within the Fainthearted Faction.)

Boy, is Atrios right about this. Contrary to what this AP report (and many other articles) says, the emerging Bush proposal doesn't allow younger worker to "invest up to 4 percent of their payroll taxes in private accounts." It allows them, as Atrios says, to divert 4 percentage points of their contribution to their own private account.

Even this, though, while accurate, leaves a misleading impression.

The Social Security portion of the payroll tax amounts to 12.4% of your salary up to about $87,000 annually. The employee kicks in 6.2% and the employer contributes 6.2% as well.

What the president is proposing is that individuals can divert roughly 4 of those 6.2 percentage points into their private investment account.

What percentage would that be of the annual contribution to the Social Security for the given worker? About 30%.

Saying that individual workers are merely taking 2% or now 4% out of their contribution makes it sound like a nominal amount. Just enough to give a trial run to private accounts. The more accurate description -- 30% of their contribution to Social Security -- makes it sound like a much bigger deal.

It's understandable that the White House would prefer the misleading description. But why does the AP and most of the rest of the national press?

Late Update: Here's a follow-up question I wish one of the elect would ask the designated White House leakers. I assume that the employer is still obligated to contribute their 6.2% however much the employee might choose to divert. But is that the case?

A thought: Newspaper article after newspaper article reports that President Bush is going to start cutting the deficit this year and plans to halve it by the end of this term. Yet, at the same time, the White House is also saying that the president plans to borrow roughly two trillion dollars to finance his Social Security phase-out plan. Has anyone thought of connecting these two claims together? It seems obvious on its face that rather than steering the federal government back toward fiscal restraint he actually plans to borrow at rates far beyond what he did in his first term.

And, of course, Cato doesn't mind a bit -- but that's another story.

The Times and the Post weigh in with the backstory on the repeal of the DeLay Rule. It seems they could see they weren't going to be able to keep their troops in line tomorrow after so many of them had gotten an earful from their constituents. (Sort of a stampede to get into the Shays Handful, it seems.) Perhaps that sobriquet change really is in order.

As you know, Rep. Allen Boyd of Florida is now the interim <$NoAd$> Dean of the Fainthearted Faction, pending more information about Rep. Jim Moran's weaseling on the issue. And today we got a hold of the Annual Report he just sent out to constituents.

Of particular interest to the TPM research department was this section (click the link to see a image of the section) updating voters on his stand on Social Security. What caught our attention was the 2nd and 3rd "basic tenets" which he says will inform his decision-making ...

Second, there must continue to be a guaranteed benefit that ensures no retiree falls below the poverty level, and third any proposal must be fiscally responsible and not rely on smoke and mirrors to disguise the true cost of saving the system.

Now, first off, does Rep. Boyd really mean that under any new plan Social Security must maintain a "guaranteed benefit" that prevents any retiree from falling below the poverty line? And look at tenet three. Any proposal "must be fiscally responsible." Can any proposal that requires $2 trillion in additional borrowing on top of our existing problem with accumulating national indebtedness be "fiscally responsible"?

I believe the Kolbe bill, which Boyd has signed on to as a co-sponsor, envisions a mix of borrowing, increased payroll taxes (raising the 'cap') and benefit cuts to manage transition costs. So it's probably time for someone to take a close look at the Kolbe bill to see if there's any way Rep. Boyd can square it with his 'tenets'.

Oh, the Agony of Defeat! And DeLay <$NoAd$> too!

Just below you'll see our post on the new batch of Ethics Panel evisceration rules the House Republicans were slated to push through tomorrow. And we were about to report how House Dems were readying to put the Republicans on the hotseat -- particularly the Shays Handful -- by forcing a vote on the DeLay Rule itself.

And now this comes across the AP Wire ...

House Republicans suddenly reversed course Monday, deciding to retain a tough standard for lawmaker discipline and reinstate a rule that would force Majority Leader Tom DeLay to step aside if indicted by a Texas grand jury.

The surprise dual decisions were made by Speaker Dennis Hastert and by DeLay — who asked GOP colleagues to undo the extreme act of loyalty they handed him in November. Then, Republicans changed a party rule so DeLay could retain his leadership post if indicted by the grand jury in Austin that charged three of the Texas Republican's associates.

So the DeLay Rule is no more? Can The Hammer remain The Hammer after such an ignominious climb-down? Perhaps, we should be thinking more along the lines of The Mallet? And after all the trouble of getting Republican bankbenchers to walk the plank in support of the thing? We've put some good bit of time into putting together our gallery of DeLay Rule Letter-Writer letters to constituents with all their mannered and far-fetched explanations for why they voted for the thing. And now this? The rug is pulled out of under them?

Oh the humanity ...

With the recent run of ethical abuses by members of the House of Representatives, you'd probably expect that there would be some sort of crackdown. But you'd have to be familiar with the current make-up of the House to suspect that the crackdown would be on the Ethics Committee rather than the body's various malefactors.

First there was the DeLay Rule. This one amounts to a whole Tom DeLay Protection Act of 2005.

Let's get down to details.

As the Washington Post noted last Friday, House Republicans are planning to begin the new session of Congress tomorrow with a wholesale weakening of the ethics rules that govern the House. Perhaps the most important one is the removal of the rule that members of the House "shall conduct himself at all times in a manner that shall reflect creditably on the House."

The rule change was proposed to the House Rules Committee by Reps. Lamar Smith of Texas and Dave Camp of Michigan. Both loyal DeLay soldiers, Smith is a DeLay right-hand-man from back home, who says the "The [current] rules benefit the aggressors who file complaints."

As the Post noted, this provision is that which "has been used to discipline members for taking bribes, fixing parking tickets and having sex with House pages." In other words, it's the rule that covers all the various sorts of sleaze that aren't specifically enumerated in the House code -- sort of the inverse of the constitution's 'necessary and proper' clause. (After all, wouldn't it be fun to have the House ethics code says 1a. Members shall not fornicate with House pages. 1b. Members shall not give a C note to House staff to ignore visits to office by call-girls ...' You get the idea.) You might just call it the Sleaze Rule.

Perhaps more to the point, it formed the basis of the Ethics Committee's multiple 'admonishments' last year of Tom DeLay.

The GOP caucus could see as well as anyone that something had to be wrong when the Majority Leader was cited again and again for unethical behavior. So in characteristic form, they repealed the rule under which he was cited.

One person who thinks this is a bad idea is Joel Hefley of Colorado, the Chairman of the Ethics Committee and perhaps better known to you as a member of the Shays Handful.

According to this morning's CQ Today, he's told aides he opposes the changes -- particularly that to the aforementioned Sleaze Rule -- plans to speak out against the change tomorrow on the House floor before the change comes to a vote. And he said the following in a written statement: "This is not the way to effect meaningful reform. Ethics reform must be bipartisan and this package is not bipartisan. If the House is to have a meaningful, bipartisan ethics process, changes of this magnitude can be made - as they were made in 1997 and 1989 - only after thoughtful, careful consideration on a bipartisan basis."

And with a statement like that, as you might expect, ol' man Helfey probably ain't long for the Chairmanship. Reportedly he's about to be canned by Speaker Hastert and replaced by ... who? ... you guessed it, Lamar Smith.

Is Chris Shays going to have his hands full on this one too? Tune in to C-Span tomorrow. They're not allowed to have this one behind closed doors.

Bless their hearts. The Times states the facts correctly: "Starting last year, as the groundwork was being set for the emerging debate, the Social Security trustees took the liberty of projecting the system's solvency over infinity, rather than sticking to the traditional 75-year time horizon. That world-without-end assumption generates the scary $10 trillion estimate, and with it, Mr. Bush's putative rationale for dismantling Social Security in favor of a system centered on private savings accounts."

The whole editorial is well worth your reading.

What follows also tells an important part of the story ...

The American Academy of Actuaries, the profession's premier trade association, objected to the change. In a letter to the trustees, the actuaries wrote that infinite projections provide "little if any useful information about the program's long-range finances and indeed are likely to mislead any [nonexpert] into believing that the program is in far worse financial condition than is actually indicated."

As it often does with dissenting professional opinion, the administration is ignoring the actuaries. But that doesn't alter the facts or common sense. If the $10 trillion figure is essentially bogus, so is the claim that Social Security is in crisis. The assertion that doing nothing would be costlier than enacting a privatization plan also turns out to be wrong, by the estimates of Congress's own budget agency.

I wouldn't imagine that the American Academy of Actuaries annual convention would be the one you'd want to go to for the most rockin' parties. But presumably this is a topic they know something about.

As pretty much all the sensible articles on Social Security have made clear, to the extent that we have a problem, it is not a Social Security problem, but an accumulated national debt problem. And this isn't just a looking at one side or the other of the coin issue, but a category difference.

There are various ways to illustrate this point. But the following, I think, is the best.

The United States has a bit over $7 trillion in accumulated national debt. You can say that's been built up over the history of the country. But overwhelmingly it was borrowed over what happens to be the span of my lifetime -- the last thirty-five years -- and especially over the last twenty-five years.

After 1980 we started borrowing money big-time to finance our deficits -- in large part because of tax cuts on high-income earners. However you want to slice it, we started spending substantially more than we were taking in in tax revenue.

So where'd we borrow the money?

This is from memory, so I may have the numbers a bit off. But I believe about $4 trillion of that debt was borrowed on the open market -- individual Americans have them in their investment portfolios, or pension funds hold them, or the Chinese, Japanese and the Saudis and others have them in bonds.

But about $3 trillion of those dollars we needed to fund the 1980s and 1990s deficits we managed to borrow closer to home. We borrowed it from the Social Security (and a few other government) trust fund(s).

Almost the entirety of President Bush's Social Security phase-out plan comes down to a simple proposition: finding out how not to pay it back.

Now, admittedly, this is an approach that the president is rather familiar with from his own business career at various failed energy companies. But it is, in so many words, a straight up con -- one of vast scale, and one which virtually no one in the media ever frames in just these terms.

Before discussing that aspect of the question, consider a hypothetical. Let's say there'd not been a Social Security -- President Bush's dreamworld. We'd still have had the same deficits. The difference would be that we'd have had to borrow from private borrowers in the US and abroad.

Think we'd just be able to decide not to pay them back? Not likely. The Joneses and the Smiths with their 401ks probably wouldn't like that. And the Japanese and Saudis probably wouldn't like it much either. Of course, defaulting on our entire national debt would also certainly trigger a seismic international financial crisis. So you can probably figure that no one would be a huge fan of it.

So why does the president figure he can get away without making good on the debt to the folks who pay Social Security taxes, who are overwhelmingly low and middle-income wage earners (since no one pays Social Security tax on investment income or wage and salary income over about $85,000 a year)?

Isn't it obvious? Because he thinks they're an easy mark.

If anything, the fact that a sizeable portion of our huge national debt is owed (in the aggregate) to ourselves would seem to be a good thing since it gives us in extremis at least some flexibility on repayment. But to the president this is a reason to abolish Social Security so the money doesn't have to be paid back at all.

As I said at the beginning of this post, the challenges we face over the next several decades aren't really Social Security problems but national indebtedness problems, though the issues are clearly related.

One obvious and immediate way to relieve long-term pressures on Social Security financing is to reduce the national debt ... by ending our habit of running huge annual deficits or even better by paying down some of our accumulated debt (there are complicated macro-economic questions related to this second point; but in general it's correct.)

But what has President Bush done? He's presided over the biggest fiscal turnaround in American history, taking the country from modest annual surpluses to the biggest deficits -- at least in non-adjusted dollar terms -- in American history. And that's only one reason why you can make a decent argument that President Bush has done more than any other president and perhaps any other single American ever to endanger Social Security's future.

Across the board, it's just one big scam.

The guy who's the biggest threat to Social Security says he wants to 'save' it by abolishing the program and replacing it with private accounts.