The January 23 edition of NBC's Meet the Press featured a discussion of Social Security reform with Representative Bill Thomas (R-CA), chairman of the House Ways and Means Committee, but no Democrat appeared to counter Thomas's claims. Thomas used his appearance to dispute news reports that he had said President Bush's reform proposal would quickly become a "dead horse." Instead, he spoke in favor of Bush's Social Security privatization proposal and voiced opposition to raising payroll taxes, which some Democrats have suggested might be necessary.
Thomas also suggested that Bush has not pushed crisis rhetoric on Social Security; misleadingly claimed that current Social Security policy is unequal "in terms of how many years of retirement ... you get based upon your race"; and asserted without evidence that private investment accounts of the type President Bush advocates will "bring more money to the table." In addition to presenting only one side of the debate and failing to challenge Thomas's false and misleading assertions, host Tim Russert falsely claimed that Social Security's annual cost-of-living adjustment (COLA) is "tied more to wages than actual inflation."
Early in his appearance, Thomas made it clear that, far from considering Bush's reported proposal for Social Security a "dead horse," he supported Bush's plans as a starting point for reform:
THOMAS: I didn't say it was "dead on arrival." What I said was, I hope we didn't have our friends on the other side of the aisle [the Democrats] attacking the president's proposal once it's introduced, because once it's introduced, it becomes part of the legislative process. Suggest changes or suggest substitutions, but don't continue the arguments against the president's plan because it's now part of the legislative process. That would be beating a dead horse.
During his appearance, Thomas repeatedly declared his support for Bush's plan to create private accounts and noted that he himself "introduced legislation to create Social Security individual retirement accounts" in 1992.
Thomas also claimed that "the president's approach, with the individualized accounts, would bring more money to the table." Yet if the Bush administration's reported plan is enacted, total expected retirement income -- including guaranteed Social Security benefits and income from the new private accounts -- "would not match the benefits currently being promised," as The Washington Post noted on January 4. Thomas's assertion also ignored the projected cost of the Bush plan -- estimated at $2 trillion, according to a January 12 Washington Post report.
Thomas also spoke against raising payroll taxes to retain Social Security's solvency: "[T]he higher the payroll tax, the fewer people are hired. Why does that have to be the way that we solve the financing problem? Let's find revenue that doesn't continue to kill jobs but also meets our needs." Senator Edward Kennedy (D-MA) has advocated raising the payroll tax to maintain solvency, and could likely have provided arguments to counter Thomas, and Senator Debbie Stabenow (D-MI) has proposed not extending a portion of the Bush tax cuts for the wealthiest Americans.* Even Senator Lindsey Graham (R-SC) "has proposed financing the accounts by raising the maximum income subject to Social Security taxation from $90,000 to $120,000," according to a Washington Post article. But no one on Meet the Press presented those views.
Thomas misleadingly claimed that under the current Social Security system, racial minorities suffer unfairly. Because minorities have relatively lower life expectancies, Thomas argued, they spend fewer years in retirement receiving Social Security benefits, even though they paid taxes throughout their working lives. Apparently referring to black Americans' lower life expectancy, he stated, "We also need to examine ... the question of race in terms of how many years of retirement do you get based upon your race." But the discrepancy between the life expectancies of blacks and whites is largely due to higher mortality rates for black infants and youths. According to the report "Health, United States, 2004," compiled by the Centers for Disease Control and Prevention's National Center for Health Statistics, the difference in life expectancy for blacks and whites who survive until 65 is about two years (depending on birth cohort). Thomas's remark also ignored Social Security's survivor benefits, which are passed on to family members after death.
In a January 18 Center for Economic and Policy Research report titled "Growing the Social Security Crisis: The Social Security Administration's Poverty Rate Projections," economists Dean Baker and Mark Weisbrot argue that, because the Bush administration's plan for private accounts would actually reduce benefits (as noted above), blacks "will be far more vulnerable" than whites to such a plan because of the "black/white income gap" predicted in the Social Security Administration's poverty projections. As Baker and Weisbrot note, "One policy approach would be a renewed emphasis on efforts to close the racial gap in life expectancy and income," instead of the Bush administration's approach "to take these race ... based differences as facts, and then adjust government policy accordingly." Such a view was not aired on Meet the Press.
In further defending Bush's proposals, Thomas falsely suggested that Bush has not resorted to crisis rhetoric on Social Security: "Well, a couple of weeks ago, the president had one of his forums in Washington, and if you'll look at what he said actually at that Washington forum, he used the term 'problem' 27 times. He used 'crisis' zero." But in outlining his proposals to deal with Social Security at a White House economic conference in December, Bush declared that "the crisis is now." In addition, Bush has repeatedly referenced the need to "save" Social Security. While Thomas himself declined to call Social Security a "crisis," he did offer that "[i]f we're not in a crisis now, we're in a problem. Wait a few years. We will be in a crisis."
In addition to airing only one side of the Social Security debate and failing to challenge many of Thomas's misleading claims, Russert mischaracterized Social Security's cost-of-living adjustment. Russert said: "Right now we have a cost-of-living increase, a COLA increase, that is tied more to wages than actual inflation. It is inaccurate by everyone's estimation." In fact, as Media Matters for America has noted, Social Security COLAs are tied to inflation -- that is, to increases in the actual cost of living. The wage index is used only to calculate a recipient's initial benefit level upon entering the program.
Moreover, contrary to Russert's suggestion that COLAs are currently larger than necessary to prevent inflation from eroding the purchasing power of Social Security, many people believe that the Consumer Price Index for Wage Earners and Clerical Workers, the index currently used to calculate COLAs for Social Security, actually understates the true cost of living for seniors, since seniors spend a greater portion of their income on health care. Representative Bernie Sanders (I-VT) introduced a bill in 2003 to index COLAs to an alternate version of the Consumer Price Index that attempts to calculate the cost of living specifically for the elderly. Sanders's website explains:
Currently, when the Bureau of Labor Statistics compiles the Consumer Price Index, it understates inflation seniors face and leads to cost-of living adjustments (COLAs) that are too low. For example, when the price of laptop computers and cellular phones falls, seniors do not benefit because they do not purchase those goods. Seniors do, however, spend a great deal of their income on medical costs and prescription drugs. In fact, the costs for seniors' medical costs rose an astounding 156% over the past 15 years. Thus, seniors receive smaller COLAs than what they are due.
*This item previously included the incorrect claim that Stabenow has proposed raising the payroll tax to fund the Social Security shortfall. In fact, she suggested not extending a portion of the Bush tax cuts, rather than raising the payroll tax. We regret the error.