“New Details Indicate Administration Social Security Plan Would Entail Several Trillion Dollars In Borrowing.”

That and more just out from the Center on Budget and Policy Priorities.

See it now.

(Tim, you could read it so quickly. And so many errors could be avoided. Pass it on to Fineman when you’re done. Also, remember the CPI calculation debate and the wage or inflation indexing debate are two different issues. I’m just trying to help! I’m on your side!)

And we’re off …

I had the text of the speech a bit in advance. But I intentionally didn’t read it because I wanted to hear it first as a speech rather than in the written word.

And I found the choices imbedded in the speech quite surprising.

First, there wasn’t all that much about Social Security, and quite little that was new.

As someone who is not at all neutral on whether Social Security should be preserved or dismantled, that struck me as a missed opportunity. It’s not every day that even the president gets an hour with the American people, with all the pomp and ceremony reared up in his favor. Even the privatizers have a story to tell. And the State of the Union gives the president a moment of conversational intimacy with the American people. On Social Security, I don’t think he made much good use of it. And there was little on Social Security at least that was memorable.

As a final point along those lines, I also thought he did little to weave a narrative about privatization into the other themes of his presidency. The whole second half of the speech (I wasn’t watching a clock; but that was my sense) was about foreign policy issues that are distant from what the country will be debating in the coming months. They remain issues of deadly importance and high ideals; everyone can agree to that. But nothing was connected together — no bridge from the issues and touchstones which won him reelection to the policies he now wants to enact.

A few other observations.

First, now we know how much phase-out the president wants: 1/3 of Social Security. He said so tonight. So at least that nugget of his plan is clear.

Second, there were a slew of bones tossed to the cultural right pretty clearly aimed at bringing them back on board the phase-out bandwagon. Again, it didn’t seem woven together, all disconnected.

Third, the president is now saying — and saying emphatically and militantly, with an eye on his critics — that if you’re 55 you’re home free, nothing to worry about when it comes to phasing out Social Security.

One might observe that this is a rather unfortunate dividing in half of the country. If you’re 50 today, you spent most of your highest earning years not only paying into Social Security, but advance-paying even more, under the 1983 Social Security Commission which put in the extra level of tax to build up the Trust Fund. Now you’re hosed. Too bad.

The important point though is that this is simply not true. And the defenders of Social Security would be straight-up fools to let the president get away with a guarantee as obviously bogus as that one.

The president can say whatever he wants. But the truth is he’s going to try to siphon off one out of every three dollars that goes into Social Security — the money that goes to pay those benefits he’s telling you 55-and-over folks not to worry about.

Remember, he says the program’s in trouble in 13 years and bankrupt in less than forty as it stands now. And now he’s telling people who are 55 and over that they can rely on the program with complete confidence even though, under his new plan, it’ll have to make do with 2/3 of its current revenues.

Does those two facts compute to you? You think that might put a little stress on the system? Even if the president just decides to pull out the national Visa card and borrow a few trillion more dollars to make up the shortfall, that will just come back and hit the program in other ways and more than soon enough to hit people a decade from retirement. People who are 55 today will be alive in 10, 20, 30 and more years from now. And like so many of President Bush’s promises this is one he couldn’t keep even if he wanted to.

With Social Security phase-out, we’re all in the same boat. Actually, let me rephrase that: With Social Security we’re all in the same boat. With phase-out, it’s everyone overboard and every man for himself.

We’re going to have to wait for official confirmation. But from what we’re hearing from readers watching the coverage, Sen. Mary Landrieu (D) of Louisiana may have picked tonight to leave the Fainthearted Faction.

Is Sen. Carper (D) of Delaware going to be left as a Faction of one?

I guess they call it fact-checking …

“Our society has changed in ways the founders of Social Security could not have foreseen. In today’s world, people are living longer and therefore drawing benefits longer – and those benefits are scheduled to rise dramatically over the next few decades.”

“In 1934, when Franklin Roosevelt formed the Committee on Economic Security to design what was in effect the first federal safety net, the committee hired three actuaries to stargaze into the future. The actuaries predicted that the proportion of Americans over 65 — then only 5.4 percent — would rise to 12.65 percent in 1990, meaning that retiree costs would soar. They were just a tad high; the actual figure would be 12.49 percent.”

One of the small lies of the evening, <$NoAd$>to be sure. But then, isn’t it the small lies that somehow matter most. Pardon our Hallmark moment …

Okay, for all you TPM readers who have been quietly tapping away at your keyboards looking for that find or catch that will earn you one of the prized Special Edition Privatize This! TPM T-Shirts, your wait is over! Or at least, it’s over if you’ve already won one! Or, well, something like that. But the bottom line is we’ve got the T-Shirts.

We’ve already awarded a number of them to TPM readers who tracked the evolution of the Social Security speech code and we’ll be giving out ten more tonight and tomorrow for eagle-eyeing the State of the Union address and its aftermath.

And of course, if you’d rather just drop down a few bucks and buy the T-shirt as a straight cash transaction, well, we can help you there too.

It turns out there’s a men’s version and then a women’s version of the shirt. Why each gender gets their own version I don’t precisely understand. But my one-and-only tells me that’s how it is. So that’s how we’re going to do it. And if that isn’t enough there’s even the obligatory ‘Private This’ mug.

If you want to see what the thing looks like, click here to see the front and here to see the back. And to buy one you can go here.

A couple quick points. We make five bucks a piece off the shirts and the money goes to supporting TPM. On the image of the front of the shirt, you can’t really make it out clearly, but the smaller text under “Privatize This!” says “*eyes and ears on loan to talkingpointsmemo.com”, which we thought was kinda cute and had the added advantage of accurately describing how involved, watchful and vigilant readers are what makes this sort of enterprise possible.

In any case, on to other posts now. But politics isn’t just about beliefs and policies and arguments. It should also be fun. Because fighting for things you believe in with some punch in your step, a glint in your eye and a confidence in results is fun. The center-left managed to lose a lot of that moxie over the years for a long list of reasons, some of them inevitable. But it’s recoverable.

Atrios makes the expert catch here with this comment from Wapo associate managing editor Robert Kaiser …

Even more curiously, a “senior administration official” who briefed reporters on the Social Security proposal earlier today disclosed details of the White House plan that I don’t think will play well in Peoria. Most significantly, this official revealed that most or all of the earnings from new “personal” or privatized accounts will be paid not to the holder of the account, but to the government. The senior official called this a “benefit offset.” It’s one way to finance the creation of these private accounts, but it’s going to cause quite a political stir, I think.

That’s quite a deal, isn’t it?

If you really do well in the market you might even work your way back up to what you were going to get anyway. Of course, that not counting the huge benefit cuts.

Here is the exchange with the mysterious “senior administration official” in question …

Q Putting those aside, what is the revenue implication of a fully phased-in 4 percent account of the type that you’ve laid out?

SENIOR ADMINISTRATION OFFICIAL: It would be very different depending overall on whether or not it was done alone or in the context of a comprehensive plan.

Q Assuming it’s done alone, since that’s all you’re putting out here —

SENIOR ADMINISTRATION OFFICIAL: And the problem with assuming it’s done alone is that we aren’t advocating that it be done alone. We’re advocating that it be done in the context of a comprehensive plan.

Q But people are going to want to know what is the cost.

Q But you’re not saying what else is in there. You’re not saying what else is in the comprehensive plan, so —

SENIOR ADMINISTRATION OFFICIAL: Well, when we have — at the point where we can attach numbers to a comprehensive plan and model the effects of the accounts in that context, of course we’ll put those numbers forward. But until that — those specifications exist, we don’t have the ability to project that.

Q In saying that there is no net added cost to the program, are you implying — is it implicit that there is a benefit offset of one-third current guaranteed benefit because you’re diverting one-third of revenues away from this program? If that’s not correct, what would the benefit offset be to traditional benefits, and how would it be calculated?

SENIOR ADMINISTRATION OFFICIAL: The way that the election is put before the individual in a personal account structure of this type is that in return for the opportunity to get the benefits from the personal account, the person foregoes a certain amount of benefits from the traditional system.

Now, the way that election is structured, the person comes out ahead if their personal account exceeds a 3 percent real rate of return, which is the rate of return that the trust fund bonds receive. So, basically, the net effect on an individual’s benefits would be zero if his personal account earned a 3 percent real rate of return. To the extent that his personal account gets a higher rate of return, his net benefit would increase as a consequence of making that decision.

Q So he would only get a benefit to the extent that his portfolio performed in excess of 3 percent?

SENIOR ADMINISTRATION OFFICIAL: Right. You can think of it as saying — if you were making a decision on where to put your money going forward over the next 10 years, and you’re saying, should I put it in this account or that account, if you’re choosing to put your money over here instead of over here, then the net effect on you, as an individual, is to compare what would be the rate of return you get from this system, as opposed to putting it over here. And that would be the difference between the two.

Q Short of 3 percent, would he make whole or would he get less than the current guaranteed benefit?

SENIOR ADMINISTRATION OFFICIAL: Well, there’s a implication at the end of your question which — you have to remember, the current system can’t pay the current guaranteed benefit, so —

Q — is to be paid through 2042 or 2052, the point — are you suggesting that would not be paid?

SENIOR ADMINISTRATION OFFICIAL: Well, it’s — well, actually, it’s — I don’t want to get off on too far of a tangent, but the Congressional Budget Office actually put out a paper this week which made a modification to what they had previously said about what current law was. And they made it very clear that current law is actually the level of benefits the current system can actually pay, as opposed to the level of benefits the current system is promising. So if you ask the question in terms of —

Q But they also said it can pay current level benefits until 2052 — correct?

SENIOR ADMINISTRATION OFFICIAL: But the Congressional Budget Office is also very careful to say that starting in 2019 or 2020, the resources are not there to pay those benefits.

Again saying the Trust Fund doesn’t <$NoAd$> exist. Like we’ve said, it’s all about trying to find a way out of paying the money back under the grand agreement of 1983.

Keep in mind that nothing that got said last night touched on the very big issues of disability and survivor benefits, which make up a substantial part of Social Security. That is money that in most cases, by definition, gets paid to individuals or on behalf of individuals who didn’t have a lifetime of work to build up a private account. Where does that money come from?

The ax falls on Istook and our man Jonathan Kaplan has the story.

You’ll remember way back when, after the aptly named Rep. Ernest Istook (R) of Oklahoma got his nose in a vise over his IRS-tax-return-snooping ‘amendment‘, he went after a bunch of Northeastern Republicans by cutting off their transportation money. (Istook was chairman the Appropriations’ Committee’s Transportation Subcommittee.) You can read about it here along with the cackling remarks of his spokesman Micah Ledorf.

As we noted at the time, this was pretty foolish practice on the part of the House Republicans, since they may not be dominant in the Northeast. But they wouldn’t have a congressional majority without healthy representation throughout the region — something Istook’s shenanigans put in danger.

Within a week, the sad-sack Istook was reduced to the ignominy of writing a public letter of apology to his colleagues.

And now, reports Kaplan, Istook’s little stunt has cost him his chairmanship.

We told you on Tuesday night that Rep. Ron Kind (D) of Wisconsin was getting his papers in order to leave the Fainthearted Faction. And tonight he filed them.

The Milwaukee Journal-Sentinel quotes Kind calling the president’s plan, “economically and morally irresponsible … I am strongly opposed to any privatization plan that cuts current benefits or increases the federal deficit. Further, the president cannot continue his raid of the Social Security and Medicare trust funds on one hand and on the other hand allege that Social Security faces a financial crisis.”

To the AP, he said: “The president’s proposal to overhaul Social Security would drain more than $2 trillion from the Social Security Trust Fund over the next decade, endangering the benefits of current retirees and leaving a legacy of debt to our children and grandchildren.”

These are the sorts of statements that are a bit vaguer on the policy nitty-gritty than we like to see. But it’s the sort that got Sen. Dianne Feinstein (D) of California out of the Faction. And he makes up for vagueness with vehemence. So, on the totality of the evidence, Kind’s out of the Fainthearted Faction.

That brings the House Faction down to a mere five members, two of whom already have OFO? status.

The night of the long gavels?

Timed as it was to get lost in the hullabaloo of the State of the Union address, the Tuesday night/Wednesday morning purge of the House Ethics Committee was still a pretty audacious move.

It’s been known for some time that the now-outgoing Chairman of the House Ethics Committee, Rep. Joel Hefley (R) of Colorado was going to get canned for his various offenses related to the Ethics Committee’s handling, be it ever so gentle, of Rep. Tom DeLay (R) of Texas. The only mystery was just when the ax would fall.

But in this case, Speaker Hastert seemed to be channeling Michael Corleone in one of his less appealing moments.

As we noted back on November 19th, three of the five Republican members of the House Ethics Committee turned out to be in the Shays Handful. Or putting it more prosaically, three of them voted against the DeLay Rule.

The three were Hefley, Rep. Kenny Hulshof (R) of Missouri and Rep. Steven LaTourette (R) of Ohio.

Hastert axed all three.

The two who toed the DeLay line — Rep. Judy Biggert (R) of Illinois and Rep. Doc Hastings (R) of Washington — stay. And Hastings becomes Chairman.

Hulshof seemed surprised by the turn of events and in his own words, “deeply disappointed.”

The following comes from the St.Louis Post-Dispatch …

“I believe the decision was a direct result of our work in the last session,” Hulshof said in an interview, “particularly my chairing the investigative subcommittee” that examined ethics charges against DeLay, R-Texas, in the 108th Congress.

Hulshof said his opposition to recent proposed changes of the GOP’s ethics standards may also played a role in his removal.

What’s most telling, though, in this whole grisly affair is less the complaints of the purged than the comments of Hastert spokesman John Freehery who apparently couldn’t be troubled to keep a straight face when denying that the purge was a purge.

This from the Rocky Mountain News about Hefley …

John Feehery, a spokesman for Hastert, denied the charge, saying Hefley did a “great job” as chairman but had served the mandatory number of terms allowed without a waiver of House rules.

“He wasn’t ousted. We have said all along we would make a change because that’s what the rules state,” Feehery said. “Any time you’re (taken) off the Ethics Committee, it’s not a punishment. It’s not a joyful type of assignment.”

And this about Hulshof from the Post-Dispatch …

As for Hulshof, John Feehery, a spokesman for Hastert, said there was no connection to the DeLay matter and that the speaker simply wanted fresh faces on the panel.

“It wasn’t really removing him,” said Feehery. “It was more like relieving him of his duty. The Speaker doesn’t like to have people who are such talented legislators like him have to spend so much time on ethics.”

Feehery noted that Hulshof sits on the Ways and Means Committee and “is likely to play a critical role on Social Security and tax reform.

“… Ethics is more of a burden than a privilege,” Feehery added. “And the speaker likes to mix it up,” referring to Hastert’s desire to put new members on the panel.

But Hulshof said he had specifically asked Hastert to reappoint him to the panel and noted that two other GOP members who were allowed to stay—Reps. Doc Hastings, R-Wash., and Judy Biggert, R-Ill.—have served on the committee longer than he has.

When corruption is really entrenched, there’s no attempt to hide it.