PELOSIPALOOZA! Every Dem should be dismayed by the Leaders appalling performance:
TUESDAY, MAY 3, 2005
THE CRAZIES ARE COMING: The crackpots, crazies and former criminals are coming for Hillary Clinton; Raymond Hernandezs report in todays New York Times makes this abundantly clear. Liberals, progressives, centrists and Democrats need to decide how they plan to approach this. But lets make one thing clear—pressure will have to be brought to bear on the nations major news orgs. They cant be allowed to channel these crazies as they did in the endless years of the Whitewater pseudo-scandals. Nor can they be allowed to conduct a war, as they did against Candidate Gore during Campaign 2000. And by the way—what do the American Prospect, the Washington Monthly and the New Republic plan to do this time? These fiery liberals ran and hid during a decade of Clinton-Gore pseudo-scandals. Trust us: The crazies are coming for Hillary Clinton. And these fiery liberals will play dumb again—unless you start assailing them now.
HOW TO CUT THE CRAP: Yes, this is the semantic dispute which actually makes a big difference. And yes, a semantic war is coming. Morton Kondracke peddled the piffle on Special Report just last night:
KONDRACKE (5/2/05): [Senator Leahy] talks about benefit cuts, and in fact, they are reductions of increases.There are no benefit cuts in Bushs plan. By contrast, Bush has proposed increases. Moments later, a certain shrink reinforced Morts misleading claim:
KRAUTHAMMER: [Democrats] say the Republicans want a cut, as you had in the headlines. Disingenuous, but nonetheless, want to cut your benefits.Would Bushs plan cut SS benefits? Or would everyone get an increase? This semantic dispute really counts. And Dems have to know how to play it.
Having said that, and with massive respect to Paul Krugman—the massive respect he has massively earned—we dont think his Monday column used the most effective construction. The New York Times adopts his construction in todays editorial:
NEW YORK TIMES EDITORIAL (5/3/05): Mr. Bush says these cuts would enable the system to continue paying benefits at the current level to the 30 percent of recipients who now make less than $20,000. But fully two-thirds of retirees rely on Social Security for more than half of their income. Moreover, the Bush plan gives the false impression that the wealthiest beneficiaries would bear the most pain. That's not the case. The wealthier one is, the lower the percentage of retirement income coming from Social Security, so even a big cut has little impact. By 2075, an average worker's benefit cut would equal 10 percent of pre-retirement income; a millionaire's reduction would be only 1 percent.That may be true, but its tortured, and hard to follow—and therefore, its easy to argue against. Replacement rate is the construction Dems should use to explain how Bushs proposal really works. Heres what the Times editorial should have said:
REVISED EDITORIAL: Mr. Bush says these cuts would enable the system to continue paying benefits at the current level to the 30 percent of recipients who now make less than $20,000. But even if that turns out to be true, all other groups will have their benefits cut—by substantial amounts. At present, for example, a worker at the upper end of the middle class may get as much as 42 percent of his income replaced by his Social Security check. But this would change under Bushs plan. By the year 2061, such a worker would only get 22 percent of his income replaced. By 2075, this worker is down to 12 percent. Simply put, this would change the face of middle-class retirement.For the record, an average-income worker goes from 36 percent replacement now to 26 percent in 2075. Would Kondracke and Krauthammer describe these changes as increases? Whatever you call it, these are the data that help people see how the Bush plan actually works. (We have taken all our numbers from Times reports in the past week.)
Replacement rate is the way to go in showing what this proposal does. When the hacks say that everyone gets an increase, this is the simple way to counter. Everything else just breeds confusion. Dems need to get on this plan.
PELOSIPALOOZA: How incoherent was Nancy Pelosi on ABCs This Week this Sunday? The House Dem leader was hugely incoherent. To understand how bad it was, lets make sure we know what has to be done to solve Social Securitys solvency problem.
Heres the nutshell: According to the SS trustees, Social Security wont bring in enough money in the next 75 years to pay all promised benefits. Yes, payroll taxes will keep rolling in—but they wont be enough. Over the course of that 75 years, the system will need an extra $3.7 trillion to meet all current promises. If we accept the trustees projection, Dems must cut benefits—or find new revenue—to match that now-iconic amount. (Note: According to the current CBO projection, the revenue shortfall will be substantially smaller—around $2 trillion. This point is very important, as we note below.)
So how would Dems make up that shortfall? Would they cut benefits? Would they raise taxes? On Meet the Press, Chris Dodd was asked that question. And as we noted yesterday, he seemed to say he would pump in new revenue:
DODD (5/1/05): This is a solvency issue, and there are ways of solving the solvency issue, in my view, without having to get into benefit cuts. Simply if you would just take what the president suggested in 2001 for his tax cuts, which were not to be permanent but to expire within 10 years. If he would not make those permanent, those tax cuts will amount to about $11 trillion in revenue losses over the next 75 years. The solvency issue for the Social Security Trust Fund is around $3 trillion. Just reduce that tax cut by $3 trillion, keep $8 trillion if you want. That solves the solvency problem without cutting benefits at all.Dodd accepts the SS trustees projection. So how would he erase that $3.7 trillion shortfall? He suggested that he would look for new revenue—that you could solve the solvency problem without cutting benefits at all. There are further questions to be asked about this. (Is Dodd saying that we should use general revenues to supplement the payroll tax?) But Dodds answer made sense, and was perfectly clear. I would look for new revenue, he said. We could do this without cutting benefits.
Dodds remarks were fully coherent. Then we get to Leader Pelosi, flailing away on This Week. Citing the CBOs less gloomy projection, Pelosi said the problem really begins around 2050. Reasonably enough, George Stephanopoulos asked her what shed do then—and thats when the chaos started:
STEPHANOPOULOS (5/1/05): So what do you do about the cuts that will happen in, you say, 2050? The Social Security administration says 2042.We have time to do it right, she said—but what does Pelosi want to do right? After reading that presentation, we dont have the slightest idea. Indeed, if you think her spiel is hard to follow, well assure you—youre not alone. But heres the principal problem: Pelosi berated Bushs plan for private accounts, and she seems to worry that Bush may not pay back the money which has been borrowed from the Social Security trust fund. But that isnt relevant to the question she was asked; it isnt relevant to the question of how Dems would address the projected SS shortfall. When the trustees project a $3.7 trillion shortfall, they are assuming that the money borrowed from SS will be paid back—that the trust funds treasury notes will be honored. The $3.7 trillion shortfall is in addition to that! Pelosi hadnt addressed the question. So Stephanopoulos kept trying:
PELOSI: Democrats are—have a vision to save Social Security first.But pay[ing] the trust fund back has nothing to do with making up the projected shortfall—the shortfall Dodd directly addressed. But uh-oh! In the face of Pelosis confusion, indefatigable Stephanopoulos began to fail and falter:
STEPHANOPOULOS (continuing directly): Okay, then let's stop right there then. How do you pay that money back? Where are you going to get that from?But it doesnt matter how Pelosi would pay back the trust fund. (For the record, the trust fund will be paid back the way all such debts are paid back). What matters is how Pelosi addressed the shortfall which is projected to occur after that. But by now, Pelosi had her host in the weeds. From deep in the weeds, she responded:
PELOSI (continuing directly): Well, first, you have to stop deficit spending. Democrats have advocated pay as you go. We did that in the '90s. We had surpluses. We paid the trust fund back. You can't bleed the trust fund of its money by having deficit spending giving tax cuts to the highest income people in our country at the expense of the trust fund.In a word, thats a mish-mosh. Dodd had given a simple answer to the simple question involved here. But Pelosi was wandering off in the wilderness. Stephanopoulos tried to prod her back onto the trail. But Leader Pelosi was lost:
STEPHANOPOULOS (continuing directly): So you're saying repeal the tax cuts?Lets say it straight—Democrats should be appalled, insulted, enraged, dismayed, to suffer this kind of representation. This chaotic conversation went on and on (text below)—but Pelosi was inept, unprepared.
In closing, lets make one important point about the way Dems might approach this.
This whole discussion starts with a forecast—the forecast of the SS trustees, who say that there will be a $3.7 trillion shortfall over 75 years. But Dems are under no obligation to accept this gloomy projection. Indeed, at the start of her session with Stephanopoulos, Pelosi rejected this gloomy forecast; she said she preferred the CBO forecast, under which the problem doesnt begin until 2052. But as is typical of her work on this subject, Pelosi failed to make an obvious connection. If the CBO forecast is the one we use, the projected shortfall is only $2 trillion. But according to conventional accounts, the Pozen plan which Bush is pimping cuts benefits by $3 trillion during that time-span. In other words, Bush is massively slashing benefits to stem a shortfall which may not even exist. If Pelosi prefers the CBO forecast, Bush is cutting benefits by 50 percent more than is needed to achieve budget balance.
For ourselves, wed very much like to see Big Dems discuss that CBO forecast. But uh-oh! This party just cant get its stories straight. On Meet the Press, Dodd gave a coherent reply to the basic question—but he insisted, completely falsely, that every single actuary agrees with the gloomy SS forecast. And even as he was making this claim, Pelosi was saying precisely the opposite over on ABC. But Pelosi, preferring the CBO forecast, failed to note that the CBO projects a substantially smaller shortfall. This is the gang that cant talk straight—even when straight-talk suits their purpose.
Readers, your Dem Party leaders have been hopeless for months in discussing Social Security. Yesterday, Matt Yglezias correctly noted a minor problem with one part of Stephanopoulos presentation. But this has ceased to be a press problem. It would be wrong to pretend that the problem this Sunday stemmed from Stephanopoulos work. Its clear where the current problem starts. It starts with Pelosi—and with Dodd.
WHOS ON FIRST: Embarrassing—theres no other word for it. The conversation wandered on (and on), like something from the vaudeville stage. Abbott and Costello looked on from Olympus—and felt they were due major royalties:
STEPHANOPOULOS: So you're saying repeal the tax cuts?Every Dem should be enraged to read this appalling transcript.
TOMORROW: Defining dishonesty down, part deux. By the way: Fiery liberal Richard Cohen jumps on the Kinsley bandwagon today, praising Bush for the high-minded way he is trying to address a real problem. More on this to come.