Bush to push Social Security changes! Issue will be hot in the election year! The headlines crowned a May 9 report by the Washington Times Donald Lambro. According to Lambro, Bushs proposal for Social Security reform will be big news in the fall. "Democratic leaders are planning to make [the proposal] a major issue in this falls congressional elections," he wrote. And the White House is ready to rumble, too. "[T]he White House plans to aggressively debate the Democrats on this issue," Lambro said. He seems to feel that Bushs proposal will drive the election this fall.
As readers will no doubt recall, Candidate Bush campaigned on this issue back in Election 2000, getting reams of favorable coverage for his bold leadership in presenting the plan. But many readers may not recall just what the Texan proposed. Luckily, Lambro helped remind the flock in an op-ed piece, which helped flesh out his news report. Somewhat strangely, Lambros column, which praised Bushs plan, also ran in the Times on May 9.
What has Bush proposed in his plan? By the time Lambros op-ed column was done, all good readers could plainly see. According to Lambro, Bush has suggested a very good thing. His plan has a clear upside: free money.
In his column, Lambro limned the outlines of Bushs proposal; his plan would "permit workers to voluntarily invest some of their payroll taxes in stock and bond funds," the scribe said. The cheerful news came further down, when Lambro presented information he had gleaned from some private research. How much money would workers gain from the personal investment accounts? At Lambros request, the Heritage Foundation had done the math. "Heres what they came up with," he said:
A 23-year-old lower-income male earning $15,175 a year will get $965 a month from Social Security under current law. But he would receive $1,180 a month under Mr. Bushs reform plan, a 22 percent increase.
A 32-year-old higher income male making $46,380 a year, who can expect to get $1,835 a month from Social Security when he retires, would receive $2,050 a month, a 12 percent increase.
A 35-year-old moderate-income female earning $25,650 a year, who will get $1,225 a month from Social Security, would receive $1,390 a month, a 13 percent increase.
There is one great constant in the Heritage study. Every worker under Bushs plan receives one thing: free money. And Lambro penned a further notethe gains could be much larger! "In many cases, of course, the returns on investment over a working career will be far higher," the scribe enthused. For the record, Lambro never suggested that the gains involved could also turn out to be much lower, or that the gains might even turn out to be losses. When pundits offer the public free cash, such possibilities are seldom around.
Boys and girls, do you enjoy a tasty free lunch? If so, Don Lambros the man you should see. But if youre still not sure that sacks of cash await all those who follow the prez, you might recall the way this issue was covered in Campaign 2000. Like Freddy Krueger, this proposal is back. Its not too soon to be asking the press to limn it a little more capably.
Next: There were ways to judge the candidates plan. The press made a point to avoid them.
The Daily update (5/14/02)
Close enough for press corps work: Is there any fact the corps gets right when it reports on this critical topic? Last Saturday, even Mike Allen mangled a basic fact in his piece about privatization:
ALLEN AND EILPERIN: A commission appointed by Bush proposed in December that the government establish voluntary personal retirement accounts in which workers could deposit up to 4 percent of their payroll taxes, in some cases with a limit of $1,000 a year. The commission, which left leeway for Congress by offering three possible structures for the funds, said the accounts would have the benefit of "providing participants with assets that they own and that can be inherited."
Wrong again, spin-breath! In fact, the commission proposed that workers be allowed to deposit up to four percentage points of their 12.4 percent payroll taxes. In other words, participants would be investing four percent of their taxable incomebut more than thirty percent of their payroll taxes. This is a basic, simple facta fact which has been routinely misstated, again and again, over the past several years. (Figure filberts of the world, unite: Four percentage points is 32.3 percent of total payroll taxes.)
For the record, Allens error is not spin-neutral; it reflects long-standing GOP spin. Proponents of privatization stress the notion that very small amounts of money would be diverted into personal accounts. This lessens the sense that significant sums would be put at risk in the program. From the time Bush first proposed this idea, obedient punditsChris Matthews, take a bowcompliantly said that only two percent of payroll taxes would be involved in the personal accounts. (Bush proposed investment of two percentage points; the commission has raised him to four.) Of course, these pundits never asked the obvious question; they never asked how such trivial sums could save Social Security from the "financial collapse" which Bush was predicting. Alas! When Matthews recited the points from his Bush press releases, he seldom wasted time with elementary logicor even with simple, key facts.
At any rate, what did the SS commission propose? For better or worse, it really proposed that workers be allowed to deposit thirty-two percent of their payroll taxes in their personal accounts. Instead of 32, Allen said four. When even Allen is so far off on so elementary a fact, youll understand why the press corps must be watched quite closely in the debate yet to come.