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Reform Lies At The Times
What to do when you have no facts to support your Social Security agenda.


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Donald L. Luskin

Of all the news that was fit to print on Sunday, the New York Times chose to run this story, blaring it from the top-right position on the front page:

Social Security Agency Is Enlisted to Push Its Own Revision

WASHINGTON, Jan. 15 — Over the objections of many of its own employees, the Social Security Administration is gearing up for a major effort to publicize the financial problems of Social Security and to convince the public that private accounts are needed as part of any solution.

While the story goes on to source Social Security Administration memoranda old and new, it does not cite any Social Security Administration official even mentioning private accounts. Yes, the story quotes President Bush talking about them (praisefully). Yes, the story quotes union officials talking about them (disdainfully). But it would appear that the lead paragraph’s claim that the Social Security Administration will seek to “convince the public that private accounts are needed as part of any solution” is nothing short of an unsubstantiated lie. At least Dan Rather had forged documents.

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That said, the Times has a point when it claims that the Social Security Administration is indeed seeking “to publicize the financial problems of Social Security.” Just look at this statement from the administration:

It is important to address the financing of both the OASI and DI programs soon to allow time for phasing in any necessary changes and for workers to adjust their retirement plans to take account of those changes. The importance of this is emphasized by the high priority that the President and the Congress are giving to the resolution of the program’s long-range financial problems. The bipartisan efforts to hold public forums this year, followed by a White House Conference in December, should result in timely legislation restoring the long-range balance of the program. The impact of the changes in the current program will be minimized if they are enacted soon.

Strong stuff! The warning that workers had better “adjust their retirement plans” sounds like benefit cuts are coming, doesn’t it? And how about the blatant promotion of the “White House Conference in December”? Has there ever been another presidential administration that used a non-partisan agency like the Social Security Administration to promote its own political maneuverings in this way?

Yes there has, as a matter of fact. That quotation wasn’t from the Times story. It was from the 1998 annual report of the Trustees of the Social Security System, which arrived during the second Clinton administration. The 1999 and 2000 annual reports of the trustees — also issued during Clinton’s presidency — said much the same thing.

The long-term financial problems of Social Security are no secret. In fact, until President Bush made reform a signature issue, Democrats were all over the Social Security “crisis.” National Review’s Byron York reminds us that Bill Clinton, Al Gore, Richard Gephardt, and Barbara Boxer all used “Save Social Security First!” as a slogan. And look at the publications on Social Security issued by the Democratic Leadership Council and the Progressive Policy Institute while Clinton was still in office. You’ve got to love it when Democrats say things like “limited privatization may help encourage personal savings and increase the pool of pension revenues,” and

This is no time for “hands off” talk about Social Security … Democrats, including a Democratic president, are calling for action on Social Security. Polls show that Americans are abundantly aware that Social Security will face insolvency once the baby boom generation begins to retire.

Indeed, the long-term insolvency of Social Security is a truth so commonplace, so indisputable, so rigorously documented in so many ways by so many people and institutions for so many years, it is ludicrous — and, ultimately, self-destructive — for the Democrats to deny it now. Yet denial is the essence of their present strategy, and so we have Democratic mouthpieces like the New York Times trying to make a scandal of the fact that the Social Security Administration is not denying it.

The Times story quotes Witold R. Skwierczynski, president of the Social Security Council of the American Federation of Government Employees, AFL/CIO, saying, “Some of the information being imparted by agency officials is not factual, not accurate. There is no immediate crisis.” If you have any question about where the union stands on this or any other initiative of the Bush administration, just visit their website. You can sign their “Don’t Yield an Inch!” petition against reform. And remember, this union’s members already have theirs, Jack: They’re federal employees who have personal retirement accounts through the government’s excellent Thrift Savings Plan.

Without naming names or offering specific quotations, the Times claims that “In interviews, other Social Security employees expressed similar views.” We are assured that “Social Security employees denied that their concerns were motivated by a bureaucratic mentality, a fear of change or a desire to protect their jobs.” Yeah, right. And when someone you’re negotiating with tells you “this isn’t about the money,” it really isn’t about the money.

But for all this partisan blather, the Times doesn’t offer a shred of evidence that the Social Security Administration is saying anything about the system’s solvency that’s any different than what it ever said. There’s simply no story — just lots of innuendo. And lots of quotes from union officials.

“Trust fund dollars should not be used to promote a political agenda,” said Dana C. Duggins, a vice president of the Social Security Council of the American Federation of Government Employees, which represents more than 50,000 of the agency’s 64,000 workers and has opposed private accounts.

That’s the money quote. That’s the scandal the Times thinks it’s got here — that sound byte from a partisan union official that “trust fund dollars” are being used for political purposes. Of course the Times underscores this with a quick guilt-by-association non sequitur: “the administration acknowledged paying a conservative commentator, Armstrong Williams.”

But what’s the real beef in this case? If resources of the Social Security program should not be used by analysts to scrutinize the system’s own future, than why should federal government resources have been used to pay for Hillary Clinton’s health care task force? Why should Treasury Department resources be used to analyze the effects of changes in tax laws? Why should EPA resources be used to pay for studies on the environment?

The most “political” thing the Times story can pull from the Social Security Administration’s “strategic communications plan” is that it states that “‘Social Security’s long-term financing problems are serious and need to be addressed soon,’ or else the program may not ‘be there for future generations.’” That’s “political”? Excuse me if I’m more bored than shocked.

For lack of fresh or relevant evidence, the Times story cites the stale and the peripheral — a “policy brief prepared by the agency says those benefit cuts ‘would double the poverty rate of Social Security beneficiaries aged 64 to 78,’ increasing the number of indigent people in that age bracket to 1.8 million, from 875,000.” What’s the scandal there? The author of the brief is simply quantifying the obvious fact that if benefits are cut, the poor will be hurt.

For that matter, what’s the news? That brief was prepared almost a year ago, as part of the Social Security Administration’s ongoing efforts to responsibly understand the system’s solvency issues. Would the Times prefer that administration researchers ignore the impacts of insolvency on America’s poor? What about all those little advertisements that appear in the Times around Christmas — “Remember the Neediest!”

It turns out that the Times’s real gripe about that policy brief is that it was written by Andrew Biggs, a Ph. D. economist whose sins are that he was once an analyst at the Cato Institute, that he believes reform through personal accounts is a good idea, and that he once had the temerity to disagree with the AARP about reform. The Times presents those facts about Biggs as open-and-shut evidence that his policy brief is part of a “political agenda.” Apparently “political” means anything in disagreement with the New York Times.

The day after this front-page story ran, I thought that maybe I’d have to give the Times credit for having a little more integrity than I thought they had. On Monday the paper ran another story (by the same reporter, Robert Pear), which indirectly gave the Bush administration the opportunity to reply. Yes, it was only reporting on what Dan Bartlett, counselor to President Bush, said on NBC’s Meet the Press. But nevertheless, the story began with Bartlett’s vigorous and credible denial:

There’s no expectation that career employees would be asked to advocate on behalf of any specific prescription for Social Security. But one thing they can do, and what anybody can do, is to look at the numbers, and they’re undeniable.

But silly me, to have thought the Times had any integrity. Tuesday’s Paul Krugman column not only repeats the central innuendo of Sunday’s front pager, but adds a new and very personal lie. Krugman writes,

Sure enough, The New York Times reports that under Mr. Biggs’s direction, employees of the Social Security Administration are being forced to disseminate dire warnings about the system’s finances …

Read the Times’s Sunday front-pager for yourself and see that there’s not a single word in it — not even the slightest hint — that “employees of the Social Security Administration are being forced” to do anything whatsoever “under Mr. Biggs’s direction.” Krugman simply made this up, pure and simple. How irresistibly delicious it must have been for Krugman, a leftist economist, to use his position on the Times’s op-ed page to take a swipe at a long-time conservative rival — even if he had to lie to do it.

For those of us who favor reform and honor the truth, it’s frustrating to watch the supposed “newspaper of record” amplify its own lies in an obvious bid to influence public policy. But lying by the Times couldn’t get John Kerry elected. And the lies of the Times aren’t going to turn back the historical tide of Social Security reform.

– Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He welcomes your visit to his blog and your comments at [email protected].



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