Fox News senior White House correspondent Jim Angle used a report on Social Security to commit several distortions apparently intended to bolster President Bush's proposal to partially privatize Social Security. First, Angle falsely compared the Thrift Savings Plan (TSP), a retirement plan for federal employees, with Bush's proposed private accounts to minimize the benefits that Wall Street investment firms would likely reap under the president's proposal. Next, Angle also promoted a misleading poll sponsored by pro-privatization groups about support for private accounts among union members and ignored contrary polling. Further, Angle contradicted his previous claims about whether Bush has, in fact, proposed a specific plan; Angle has alternately affirmed or denied the existence of such a plan, depending on which circumstance has better enabled him to defend it from particular criticisms.
After airing a clip of AFL-CIO president John Sweeney claiming that Wall Street stands "to rip off more than $1 trillion in management fees" as a result of the implementation of private accounts, Angle responded on the March 31 edition of Special Report with Brit Hume:
ANGLE: But several experts dismissed that figure as false, noting those figures are 500 times greater than what Wall Street makes from the Thrift Savings Plan that Congress has, which is the closest thing to the president's proposal. In any case, proponents of personal accounts say they have polls showing two out of every three union members think personal accounts are a good idea.
Sweeney was apparently referring to a study by Austan Goolsbee, economics professor at the University of Chicago and research fellow at the National Bureau of Economic Research. The study found that Wall Street firms could expect a $940 billion windfall from Bush's plan over 75 years. Angle's claim that "several experts" say this figure is "500 times greater than what Wall Street makes from the Thrift Savings Plan" is a misleading comparison. Only 3.4 million federal employees are enrolled in the Thrift Savings Plan, a program similar to 401(k) accounts many private-sector employers offer to their employees, while "as many as 118 million workers" would be eligible for accounts under the Bush proposal, according to The Washington Post. Additionally, experts have said that Bush's plan is likely to require significantly higher administrative costs than the TSP. The Post reported:
[T]hey [private accounts] would be much more difficult to run than the TSP and have far higher administrative costs than the president and his supporters let on, some experts say. "It's a non-starter," said Francis X. Cavanaugh, a designer of the TSP who from 1986 to 1994 was the first executive director of the Federal Retirement Thrift Investment Board, which administers the plan. "There's no way they can do this without an enormous federal subsidy. ... This has to do with workability, no matter how one feels about it philosophically, and it's not workable."
Government Executive magazine also noted on February 1: "With more than 3 million investors, the TSP is the largest individual-account retirement system in the country ... [b]ut whether the TSP model could expand successfully to more than 100 million workers remains to be seen." The Post further noted that even the White House "acknowledges that there are many differences between the TSP and the proposed accounts, and that Bush's system would be more expensive to run." And in a letter to the Annenberg Public Policy Center's Political Fact Check, economists Mark Weisbrot and Dean Baker noted that even the report of the President's Commission to Strengthen Social Security has contradicted "the assumption that President Bush and his supporters intend only to implement a system similar to the Federal Thrift Savings Plan." They note: "This report, which is the basis of President Bush's proposed changes, makes it clear that a more decentralized and costly -- and therefore immensely more lucrative for Wall Street financial firms -- program of private accounts is part of their goals."
Furthermore, Angle's claim that "proponents of personal accounts say they have polls showing two out of every three union members think personal accounts are a good idea" is misleading. His comments are apparently based on a poll conducted March 6-10 by Republican pollster Ayres, McHenry & Associates on behalf of two pro-privatization groups, which found that 62 percent of union members think private accounts are a "good idea." But the poll question is flawed, since it doesn't note that private accounts would be accompanied by a cut in guaranteed benefits. As Media Matters for America previously noted after Fox touted another Ayres poll that asked AARP members the same misleading question, support for the idea declines dramatically when respondents learn that opting for a private account will result in cuts in guaranteed benefits. A Joint Center for Political and Economic Studies/AARP poll, conducted January 15-23, found that 63 percent of respondents opposed private accounts if it meant a "lower guaranteed Social Security benefit in retirement." Additionally, Angle did not mention an AFL-CIO poll showing that "60 percent of union households oppose Bush's proposal," as The Los Angeles Times reported on March 24.
Finally, Angle's claim that the TSP "is the closest thing to the President's proposal" contradicts Angle's repeated insistence that Bush hasn't yet proposed a specific plan. When liberal advocacy group MoveOn.org released an ad opposed to the private accounts, Angle defended Bush by declaring: "Of course, the president hasn't even selected a plan and isn't expected to lay one out in the State of the Union. But critics are already assuming what he's going to propose and arguing how horrible it would be." Though much is known about what Bush would like to do with Social Security, he still has not proposed a specific plan. But Angle abandoned his previous assertion that Bush has yet to propose a plan in order to defend "the president's proposal" from criticism.
Media Matters has documented Angle's history of making misleading statements in favor of the Bush agenda on Social Security:
- Angle repeated Republican crisis rhetoric about Social Security, claiming that the program is "heading for an iceberg ... unless significant reforms are undertaken" without providing the view of Democrats and many independent economists that Social Security is not, in fact, in crisis. [1/6/05]
- Angle suggested that Democrats were dishonest for claiming that President Bush plans to cut Social Security benefits as part of his plan to let workers divert payroll taxes into personal investment accounts. But White House aides and congressional Republicans have said in anonymous statements that Bush will propose reducing benefits. Moreover, "Model 2" from Bush's 2001 Commission to Strengthen Social Security, widely expected to form the basis of the reform plan Bush will propose (see here, here, here, and here), reduces benefits by indexing the growth of initial benefit levels to prices rather than wages. [2/9/05]
- Angle repeated this misleading statement. [2/23/05]
- Angle echoed the grossly misleading Republican claim that Social Security will require $26 trillion over the next 75 years in order to remain solvent. [2/26/05]
- Angle misleadingly identified Progress for America, a Republican front group that has launched a $20 million campaign in support of Bush's Social Security plan, as simply "an outside group." [3/8/05]