RUSSERT (2/13/05): Senator, shouldn't there be truth in packaging? The suggestion being made around the country that if we have private or personal accounts, then that's going to really be a big step towards dealing with the long-term financial problems of Social Security.Good grief! In general, Russert seemed to be asking if Bush was being honest about the costs of privatization. But his rambling question lasted almost two minutes, and a whole fleet of moving parts were involved. At one point, for example, he referred to the programs transition costs—the massive sums that must be borrowed to finance creation of private accounts. But then, he also referred to benefit cuts (although he never used the term)—the steep cuts in future guaranteed benefits that seem to be required by this program. And as if to show how inept he can be, he threw in some puzzling technical terms; for example, he defined wage indexing on the fly, then pointlessly used the term later on, in the midst of a blizzard of dueling percentages. Along the way, there was something about their three highest years income—a reference that surely befuddled most viewers. His question was endless, and completely incoherent. Just how awful was Russerts query? To one side of the TV screen, Charlie Rangel was clearly seen doing a crossword puzzle by the time the speech came to an end.
Here's what—a memo that was written by Peter Wehner, whos Bush's director of strategic initiatives. And he says that, "The suspicion that personal savings accounts may have little to do with making Social Security solvent over the long run was reinforced—by his e-mail. If we duck our duty on benefit calculations, it can have serious short-term economic consequences. Here's why. If we borrow $1-2 trillion dollars to cover transition costs for personal savings accounts and make no changes to wage indexing"—future payoffs to recipients—we'll have borrowed trillions and will still confront more than $10 trillion in unfunded liabilities.
So when the president talks about private accounts, the second piece of that is what has to be done to pay for those? Now, the Center on Budget and Policy Priorities [CBPP] has done an analysis of what the commission that reported to President Bush recommended in terms of wage indexing. And this is what they found, that under current law, in 2042, recipients would get a 36 percent replacement, money—their three highest years' income, a 36 percent replacement; 2075 it would be 36 percent. Under a proposal of so-called wage indexing, it would drop to 27 percent, and in 2075 to 20 percent, which would be a benefit cut of 26 percent and 46 percent. OK. Now, that's reality. That's part of what an honest presentation to the American people would include. Why haven't we heard that?
So yes, you can take it straight to the bank; Russerts viewers were left for dead by his rambling, incoherent presentation. And of course, if you ask a rambling, incoherent question, you tend to get a rambling answer. Grassley waxed and wandered as he replied, burning up almost two minutes himself, at which point Russert simply gave up and directed a question to Rangel. Inexcusably, nothing was learned from his two-minute question. Because Social Security is so important, the public deserves better than this.
How might Russert have framed his question? If he wanted to help American voters understand this crucial debate, there were many ways he could have proceeded. For example, if he wanted to ask about truth in packaging, he could have begun with the following question. We retain as much of his language as possible:
RUSSERT REVISED: Senator, shouldn't there be truth in packaging? In town hall meetings around the country, President Bush is suggesting that if we have private or personal accounts, then that's going to really be a big step towards dealing with the long-term financial problems of Social Security. But his program seems to require as much as $15 trillion in transition costs—money that will apparently have to be borrowed—and it seems to require large cuts in future guaranteed benefits. That's part of what an honest presentation to the American people would include. Why doesnt the president talk about transition costs and cuts in benefits when he holds his town meetings?That wouldnt be the first question wed ask. But thats a version of Russerts question—and it has the advantage of being coherent. Its the kind of question a host would ask if he were serious, sharp, competent—prepared.
But lets move on to tougher terrain. What sort of questions would we have asked, given the topics Russert was raising? Lets sort out the mess of his closing paragraph, then suggest how he might have proceeded.
What was Russert trying to say when he closed with that blizzard of percentages? Basically, he was using material from the CBPP, the organization he cited. This material lays out basic facts most people dont know, and it does so in a clear, lucid manner:
CBPP: According to the Social Security actuaries, Social Security benefits currently equal 42 percent of the earnings of an average wage-earner who retires at 65. This percentage is slated to decline to 36 percent over the next two decades, as Social Securitys normal retirement age rises to 67. It would remain at 36 percent thereafter.Oh! Even under current law, future retirees will get 36 percent of their earnings when they retire, down from the current 42 percent. But under the plan proposed by Bushs commission, that guaranteed benefit would be cut sharply:
CBPP (continuing directly): The actuaries also estimate that under the proposal the Presidents Commission advanced, Social Security benefits would, by 2075, equal only 20 percent of an average wage-earners pre-retirement earnings. The percentage would fall to even lower levels in years after that.Oh! If the commissions plan were adopted, that monthly check, by 2075, would equal only 20 percent of pre-retirement earnings. Of course, a fair person will quickly add one more point—under the commissions plan, that monthly check would be supplemented by money from the retirees personal account. How large would that monthly supplement be? That would determine how well a future retiree made out—as compared to the 36 percent hes supposed to get under current law.
Theres nothing confusing about those facts—but most Americans have never heard them. And guess what? Russerts viewers still didnt know them by the time he finished his question. No, you dont have to talk about wage indexing to give your viewers this basic information. A competent host—someone other than Russert—could have laid out this info with ease.
That said, how would we have pursued this topic? We would start with an obvious question: With or without private accounts, is there any way that future retirees can receive the 36 percent which theyre currently promised? After all, 36 percent is hardly a fortune, and it already represents a significant drop from what todays retirees get. And so, wed put it to Grassley and Rangel: Is there a way to fix SS so that future retirees get 36? We might start out like this:
QUESTION: Senator Grassley, lets discuss the level of income promised to retirees in the future. Under current law, a worker who retires next month gets a Social Security check equal to 42 percent of his working income. Again: People who retire now get 42 percent [simple graphic]. But under current law, that percentage is already scheduled to decline for people who retire in the future. If todays younger worker retires in 2042—if your unborn grand-child retires in 2075—under current law, they are scheduled to receive only 36 percent of their working income [simple graphic]. So heres my question: With or without private accounts, is there a way to insure that future retirees will at least get that 36 percent? Senator Grassley, with a blend of guaranteed benefits and private accounts, can a future retiree expect to get 36 percent of his income? And please dont fudge—I have some detailed work-ups here that economists have already prepared.Yes, detailed articles have already appeared, giving a sense of what would happen under that plan from the presidents commission. Such analyses, of course, involve projections—educated guesses about the rate of earning from those private accounts. But according to Mary Walshs detailed piece in last Saturdays New York Times, no one will get that 36 percent under the commissions plan. By 2075, for example, a medium-wage worker gets substantially less than 36 percent, even if his investments do fairly well (if they pay off at 4.6 percent). Walshs figures would have provided a peg for discussing Grassleys response. (Hopelessly, Walshs article doesnt seem to appear in the NYT archives.)
Of course, Rangel should have received the same challenge. Without the use of private accounts, can Democrats do 36?
QUESTION: Congressman Rangel, without the use of private accounts, is there a way to guarantee 36 percent for people who retire in the future? According to several standard analyses, Social Security wont generate sufficient revenue to pay full promised benefits forever. (According to the CBO, the shortfall starts in 2052.) Do you have a way to shore up the system so that future retirees get what theyre promised? Todays retirees get 42 percent. Can you guarantee 36 in the future?If we had pursued Russerts topic, thats the way we would have framed it. We would have done so for a simple reason—36 percent of income doesnt strike us as a kings ransom, and wed like to know if theres some way to provide future seniors that level of dignity. There are many ways to frame a discussion, of course. But as a simple starting-point for debate, wed like to know if either party can provide that 36 percent.
Todays retirees get 42 percent. Future retirees are slated to get 36. Can either party hold that line? Thats a very simple question. But Russert—an incompetent—was lost in the weeds. Dreaming of the swells of Nantucket, he never quite bothered to ask it.
TOMORROW: Overview—Tim Russerts folly
LUCIDITY, GET THEE AWAY: Scribes like Russert flee lucidity as their ancestors might have fled Lucifer himself. On January 16, Roger Lowenstein penned an amazingly lucid, 8000-word piece about Social Security for the New York Times Magazine. The piece was stunning—a masterwork of clarity. And how did the rest of the press corps react? As Americans continue to scratch their heads over this jumbled, confusing discussion, Lowenstein has appeared on one TV show, Kudlow and Cramer—a show which airs on our least-watched news channel. Instead, were punished with stumblebums like Russert—an apparent incompetent who is too unconcerned to frame a coherent debate.
RAY CHARLES MOTHER: When we went to see Ray a few week ago, we were amazed by how good it was. (Yes, its also a bit formulaic and pat.) We thought it provided a very smart portrait of the evolution of Ray Charles music. We thought it gave an inspiring look at the evolution of mid-century American culture. And, as if to put its money where its mouth was, it seemed to revel in the complexity of its African-American characters. By the way: To his credit, Taylor Hackford clearly knows that the Raelettes were just flat-out hot. Its worth every penny of your nine bucks just to check out the Raelettes stage dresses.
But Hackford understood the beauty of another main character—Aretha Charles, Ray Charles mother. She doesnt appear in fancy dresses; she was a poor woman of the rural south, and she wears the faded shifts of a washer-woman. But Ray is a moving tribute to her beauty too, and when we talk about Social Security, wed be well served if we tried to remember that were partly discussing Ray Charles mother. Yes, things may be somewhat better for poor rural people today. But America has plenty of low-income people who live (and retire) very much on the edge. Will 36 percent be enough? We dont know, but wed like to find out. And so, when pundits plan their discussions of Social Security, wed suggest they remember Ray Charles mother. Indeed, wed suggest they remember another large soul—a man who once was able to move our hearts by insisting that attention must be paid.