John Kerry went after President Bush on Social Security today. Here’s what his press release says: “In his West Palm Beach town hall meeting, Kerry referenced a new study by Chicago Business School Professor Austan Goolsbee that focuses on Bush’s plan to privatize Social Security. Goolsbee finds that financial institutions, not seniors, stand to gain from Bush’s plan.
“According to the study, the 45 million Americans who count on Social Security will see up to a 45 percent cut in their benefits, while Bush’s biggest backers – the financial services industry – will reap billions as part of the largest windfall in Social Security history.”
The study does indeed find that administrative costs would amount to a huge windfall for Wall Street. Proponents of private accounts are sure to argue that Goolsbee’s estimate of those costs is too high. But the study says nothing about benefit cuts for current retirees (or even future retirees). Goolsbee tells me he’s surprised the campaign is citing him to predict a 45 percent cut for 45 million people. “That’s weird,” he says. “I don’t know how they got that.” His paper, he says, didn’t deal with benefit levels.