The Corner

The Pundits on Social Security

I keep hearing that Fred Thompson is bumbling and unprepared. But he looks a lot better than some of the people who are talking about him.

Take yesterday’s discussion, on Hardball, of Thompson’s Social Security proposal. Chris Matthews, Jim Cramer, Chuck Todd (NBC News), and Jill Zuckman (Chicago Tribune) appeared to have no idea what Thompson’s proposal even was.

Social Security benefits are calculated so that the average guy who retires in 2040 will get checks that replace the same percentage of the income he used to make as the average guy who retires today. Initial benefit levels, that is, are indexed to wage levels. In each additional year of retirement, the Social Security checks get a cost-of-living adjustment to keep up with inflation. Since wages are expected to rise, initial benefit levels are too. Thompson has pointed out that if initial benefit levels were instead frozen in real terms–if they just kept up with inflation, but didn’t keep up with wage growth–Social Security wouldn’t be in any danger of running out of money.

Thompson’s idea of replacing wage indexing with price indexing is not new. A modified version of it was touted by President Bush in 2005. It has, indeed, been debated since at least the late 1970s.

Matthews got the ball rolling: “He’s talked about jiggering around with the cost of living adjustments to Social Security. No one else does this sort of thing. Can he get away with it?” Cramer then jumped in and said that Thompson had picked the wrong state–Iowa–to float this idea. Actually, Thompson hasn’t talked about changing the cost of living adjustments at all, and what he has talked about has been talked about by plenty of others–including Tom Vilsack, who was the governor of Iowa until earlier this year.

Then Matthews gets in again. “You start messing around with the COLA — I can`t quite figure out his plan. Something about shifting it to consumer goods. It is with the consumer goods. Now, I`m not sure what his plan is, but it`s something to do with adjusting it downward, so it doesn`t go up enough, as it has in the past , and people gradually lose real cost of living.” None of this is right. Thompson, again, isn’t talking about the cost-of-living adjustment, and under his idea benefits would keep up with inflation. It would have zero effect on any current retiree.

The panel then talks for a while about COLAs, with nobody aware that it has nothing to do with Thompson’s plan. (Matthews: Older voters “go down to the diner and they talk about the COLA.”)

Matthews concludes that Hillary Clinton is “smart enough” to rule out almost every possible idea for fixing Social Security. As a political matter, Matthews may be right that it’s the smart thing for her to do. But one reason her calculation makes sense is that some of ours pundits don’t care to learn more than the nothing they already know about the subject.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

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