Media reports pave the way for Social Security privatization

››› ››› NICOLE CASTA & JEREMY CLUCHEY

Several cable and network news reports on President Bush's December 9 Oval Office meeting with Social Security trustees gave implicit support to the administration's plans to overhaul Social Security (which entails partial privatization) by repeating the crisis rhetoric of privatization proponents, suggesting that the Bush administration's plan offers a solution to the purported crisis, and bolstering the administration's plan through one-sided interviews with conservative guests. Some in the media have also mischaracterized the Democratic response to the administration's push for reform.

In a December 9 segment on CNN's Inside Politics, national correspondent Bruce Morton asserted, "Social Security is in trouble," and played a video clip of Senator Lindsey Graham (R-SC) speaking in support of the Bush administration's proposal to overhaul the program. And on CNN's December 9 edition of Live From..., anchor Kyra Phillips teased a segment on Social Security by stating falsely that "[i]t's trillions of dollars in the red," asking: "What else can be done to save Social Security? President Bush talks about it."

But Social Security is not currently "in the red," and the view that the program needs an immediate, drastic fix is not universally held. The 2004 Report of the Board of Trustees of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds (OASDI), which was prepared by several Bush appointees (including three cabinet secretaries), noted that while "the financial difficulties facing Social Security" should be addressed "in a timely manner," the program is "considered financially adequate throughout the short range ... through the year 2013." The report estimated that Social Security "assets are projected to be exhausted in 2042," at which point, if left unchanged, "tax income would cover 73 percent of costs," and that the system could still pay out 68 percent by 2078. The Congressional Budget Office (CBO) projected in June 2004 that Social Security "outlays are projected to begin exceeding revenues in 2019" but that "The expected trust fund exhaustion date -- the year in which the trust fund balance (and thus the trust fund ratio) falls to zero -- is 2052 in CBO's projection."

New York Times columnist Paul Krugman noted in his December 7 column that "extending the life of the trust fund into the 22nd century, with no change in benefits, would require additional revenues equal to only 0.54 percent of G.D.P. [gross domestic product]. That's less than 3 percent of federal spending -- less than we're currently spending in Iraq. And it's only about one-quarter of the revenue lost each year because of President Bush's tax cuts." And on the December 9 edition of CNN's Inside Politics, guest and CNN host Lou Dobbs commented on the realities of Social Security, perhaps in response to his colleagues' overheated treatment of the issue:

DOBBS: Well, there are a number of options. I think the first thing though that everyone needs to do in my opinion is step back and say is any change in this system necessary right now? Most of the experts with whom I have talked, most of the analysis that I've gone through shows a problem that is 30 years to 40 years distant. The fact is that there are only two things that can really happen here, that is change some of the assumptions within the internal mechanics of the program or raise taxes or lower benefits and eligibility ages. All of those will have to be considered and will be considered, frankly. But this is something that should not be thrown into a national agenda and dealt with in one session of Congress. It's going to require a lot of thought, it will take several years, and it will have to be carefully done if we are to have responsible government policy on this.

In discussing the Bush administration's proposal to privatize Social Security on the December 9 Inside Politics, in addition to airing clips of Bush and Graham, CNN gave airtime to two proponents of privatization, with no opposing point of view presented. The program featured Robert Bixby, executive director of the Concord Coalition, and Michael Tanner, director of the Project on Social Security Choice at the conservative Cato Institute. Bixby testified before the Senate on October 3, 2002, in favor of Social Security privatization; Tanner authored a study, "The 6.2 Percent Solution: A Plan for Reforming Social Security," which prescribes Social Security privatization.

The December 9 edition of CBS's Evening News featured an interview with Tad DeHaven, an economic policy analyst for the conservative National Taxpayers Union whom CBS said "could be the poster child for Social Security reform." DeHaven, who predicted in the interview that Social Security will not "be there" when he retires, expressed support for Social Security privatization. CBS News chief White House correspondent John Roberts stated that "Tad is fully on board the plan to establish private accounts for Social Security." But, as Washington Monthly blogger Kevin Drum noted on December 10, CBS failed to disclose that DeHaven's employer advocates Social Security privatization, or that he has previously worked for the Cato Institute and interned with the Heritage Foundation, also ardent supporters of Social Security privatization. Instead, the CBS report gave the misleading impression that DeHaven offered the perspective of an average American worker.

In an interview with host Katie Couric on the December 10 edition of NBC's Today, MSNBC host Chris Matthews mischaracterized the Democratic response to the Bush administration's push to reform Social Security. Matthews inaccurately described statements that incoming Senate Minority Leader Harry Reid (D-NV) made on the issue on the December 5 edtion of NBC's Meet the Press:

MATTHEWS: I have to say that Harry Reid's position there is, "leave it alone, it'll fix itself." That will not sell. ... He's saying, "I'm not gonna do nothing." The Democrats are going to be against this, they're going to use scare tactics, they're going to tell you it's all about the rich or the stock market -- I think that's a bad position.

But contrary to Matthews' claim, Reid made a point of saying in his Meet the Press appearance that the Democratic Party supports reasonable Social Security reform efforts, though it does oppose the Bush administration's proposed private accounts:

REID: Tim, all experts say that Social Security beneficiaries will receive every penny of their benefits that they're entitled to -- 100 percent of them -- until the year 2055. After that, if we still do nothing, they'll draw 80 percent of their benefits. I want those beneficiaries after year 2055 to draw 100 percent of their benefits. But this does not require dismantling the program. For heaven's sakes, they're crying wolf a little too regularly here. There is not an emergency on Social Security. We can do this. The president should not try to jam this private accounts [sic] in an effort to destroy Social Security.

[...]

RUSSERT: Would you look at increasing or raising the age of eligibility? Would you look at means testing? Would you look at any reform?

REID: Of course. There are reforms that probably can happen in Social Security, and we're not, you know, saying don't even touch it. Let's take a look at it. I said I want people after the year 2055 to be able to draw all of their benefits. And, sure, we'll take a look at it, but don't give the ball to Wall Street.

RUSSERT: No private accounts of any kind?

REID: Not as far as I'm concerned.

Posted In
Economy, Social Security
We've changed our commenting system to Disqus.
Instructions for signing up and claiming your comment history are located here.
Updated rules for commenting are here.