LA Times echoed McCain's reported spin of Social Security "disgrace" comment
SUMMARY: The Los Angeles Times asserted as fact that in recent comments about Social Security, Sen. John McCain used the word "disgrace" to refer to how "younger workers are forced to pay for a plan that, in his view, is unlikely to benefit them when they retire." But the Times ignored an assertion by McCain on CNN on July 8 in which he again appeared to be denouncing the Social Security system itself and not, as the Times reported, the fact that absent legislative change, the system faces insolvency in the future.
In a July 14 Los Angeles Times article, staff writer Peter Wallsten asserted as fact that in recent comments about Social Security, Sen. John McCain used the word "disgrace" to refer to how "younger workers are forced to pay for a plan that, in his view, is unlikely to benefit them when they retire." In making the assertion, Wallsten was echoing McCain's reported explanation of a comment he made on July 7: "Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed." But in simply echoing McCain's reported explanation -- that he was remarking on the fact that young people, in McCain's words, are "paying so much that they are paying into a system that they won't receive benefits from on its present track that it's on" -- Wallsten ignored an assertion by McCain on CNN on July 8, the day after the original controversial comment. On the July 8 edition of CNN's American Morning, McCain again appeared to be denouncing the Social Security system itself and not, as Wallsten reported, the fact that absent legislative change, the system faces insolvency in the future. On American Morning, McCain said that younger people "pay their taxes and right now their taxes are going to pay the retirement of present-day retirees. That's why it's broken, that's why we can fix it. We can do it together, Republicans and Democrats alike."
Wallsten included a quote from McCain's American Morning appearance in his article, but did not include that comment.
Further, Wallsten quoted McCain's statement that "it's terrible to ask people to pay into a system that they won't receive benefits from," but did not directly note that the assertion that young workers will not receive Social Security benefits upon retirement is false. According to the Social Security and Medicare Boards of Trustees, if no legislative changes are made, "Tax income would cover 75 percent of scheduled benefits in the final year (2082) of the 75-year projection period."
Wallsten later wrote that after 2041, "workers' payroll taxes would cover only a fraction of the benefits promised to retirees" -- but did not note the size of that fraction. According to the "Summary of the 2008 Annual Social Security and Medicare Trust Fund Reports" by the Social Security and Medicare Boards of Trustees:
For OASDI [the combined Old-Age and Survivors' Insurance and Disability Insurance trust funds], interest income will first be needed to pay a portion of benefits in 2017, although the trust funds will continue to accumulate assets. In 2027, trust fund assets will begin to be depleted and are projected to be exhausted in 2041, after which continuing tax income would be sufficient to cover 78 percent of scheduled benefits. Tax income would cover 75 percent of scheduled benefits in the final year (2082) of the 75-year projection period. Although the projected exhaustion date for the DI Trust Fund is 2025, the value of the OASI Trust Fund would be sufficient at that point to make assets available to pay full DI benefits, but only with authorizing legislation.
From the Los Angeles Times article headlined "McCain takes a Social Security risk":
McCain, the presumed Republican presidential nominee, spoke several times last week about changing how the popular retirement program is funded, at one point calling it a "disgrace" that younger workers are forced to pay for a plan that, in his view, is unlikely to benefit them when they retire.
Democrats are gearing up to turn McCain's stand on Social Security, and his willingness to consider a privatization plan, into a key campaign issue. They say changing the program in that way would undermine retirees' benefits, and they hope to use the issue to harm the Arizona senator's support among a set of voters who tilt toward him -- seniors.
[...]
McCain's remarks on Social Security came during a week that showcased his ideas for the economy. When asked by a young woman at a Denver town hall meeting last Monday how to make Social Security viable for her generation, he said she could not rely on the system "unless we fix it."
"We are paying present-day retirees with the taxes paid by young workers in America today," he said. "And that's a disgrace. It's an absolute disgrace, and it's got to be fixed."
His comments seemed to suggest that McCain favored a new funding mechanism for Social Security benefits, such as private accounts. Later, on CNN, McCain seemed to fully embrace the idea of private accounts. "I want young workers to be able to, if they choose, to take part of their own money, which is their taxes, and put it in an account which has their name on it," he said. Participation would be a "voluntary thing," he said, and "would not affect any present-day retirees or the system as necessary."
[...]
His aides said Democrats were misrepresenting his statements; his only plan for fixing Social Security, they said, is forging a bipartisan compromise that considers all options.
Still, McCain did not back down, saying later in the week that "it's terrible to ask people to pay into a system that they won't receive benefits from."
At issue is how to shore up the finances of the Social Security system, which will come under pressure as more than 70 million baby boomers -- the generation born between 1946 and 1964 -- enter retirement and receive their benefits.
A government report in March painted a gloomy picture of the program's future, estimating that its costs will surpass payroll tax revenue in 2017 -- forcing the system to rely on a trust fund that, the report said, will go broke in 2041.
After that, workers' payroll taxes would cover only a fraction of the benefits promised to retirees.
What MM fails to note amidst those ellipses (...) is that the article is largely critical of McCain!
MM conveniently edited out the single-sentence, stand-alone paragraph by the Times: "McCain's position has been somewhat fuzzy." The article then carefully documents that McCain has taken a different position than a few years ago!
The LA Times' pro-Obama bias has been very well documented. For MM to attempt to show something otherwise is a joke, IMHO.
MM is scraping the bottom of the barrel on this one.
LOL. I read the Times almost every day. How about you?
C'mon, now. The LA Times' liberal bias is very well founded and very well chronicled.
One of the things about the LAT is that it often appears that the fault is not with the original writer, but with the editorial staff, who inject right-wing slants into articles. It wouldn't surprise me at all if the article originally pointed out the remark accurately, but was re-written.
All the time, the LAT will have ringer headlines or sentences that keys an article to a conservative point, but the bulk of the copy completely contradicts the claim, or doesn't confirm it at all.
Just the other day they had a front-page subhead that declared that McCain and Obama were almost identical on major policy positions-- but this claim was not borne out by a close reading of the article.
In other words-- Sam Zell and his minions inject right wing propaganda into the paper on a regular basis, and that's how they do it.
The whole argument about Social Security going broke is a red herring. Someone drags it out every election cycle and uses it to bash their opponent over the head with it. Then they (either one of them) get elected, and once again - nothing gets done.
And nothing happens to the Social Security fund either.
The Social Security actuaries are required by law to make 25, 50, and 75 year projections for the health of the fund. They do this every year - as an update. Every single projection they have made since the first year has been wrong. And wrong in the 'conservative' direction - that is - the fund always had more money than what they said.
I give credit to the article above since they pointed out that while the Disability Fund actually runs out of money in 2017, there is still plenty of money in the regular fund to continue to pay benefits for both groups until 2043. At which time, the fund will not be OUT of money - it will just be running in a deficit mode compared to the amount of income coming in. The Trust Fund has other income from the interest on the invested money to run for quite a while longer than that, and as noted, with no changes at all, retirees would still receive a large percentage of benefits. The Social Security Trust Fund has run at a deficit two or three times in its history - but it does catch up as the economy improves, and more people have good jobs.
One very easy and fair change would be to remove the cap on the FICA taxes. As it stands, a person making less than $107,000 pays 6.2% on their entire income. A person making more than that pays only on that first $107,000. As their income increases, the total percentage they pay against total wages decreases. Again, the rich pay less than poor people, and THAT is what is not fair. This item would extend the system for a great length of time.
And, as noted before, the actuaries have been wrong - every single time. No reason to expect them to change now!
As far as McCain - he thinks having younger workers pay for retirees benefits is a disgrace. He obviously is not aware of the fact that is how the SS System has been funded since day one. And he's supposed to be the one with all the credibility? Please!
Actually, the worker pays 6.2% and the employer pays 6.2%, for a total of 12.4%.
You are right, this is a regressive tax. Raising (or eliminating) the cap would correct that. On the other hand, what kind of Social Security benefits would be due to someone who had been taxed on a million-dollar salary be.
But, how likely is it that someone earning at that income level would actually retire - subjecting themselves to the income limits - instead of keep working?
That's a psychological/sociological and actuarial puzzle I'll have to leave for someone else.
The link above to the 2008 Summary paints a less than glowing picture. I cut out the beginning three paragraphs. (I hope my paste doesn't shrink it.)
Each year the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs. This message summarizes our 2008 Annual Reports.
The financial condition of the Social Security and Medicare programs remains problematic. Projected long run program costs are not sustainable under current financing arrangements. Social Security's current annual surpluses of tax income over expenditures will begin to decline in 2011 and then turn into rapidly growing deficits as the baby boom generation retires. Medicare's financial status is even worse. This year Medicare's Hospital Insurance (HI) Trust Fund is expected to pay out more in hospital benefits and other expenditures than it receives in taxes and other dedicated revenues. The difference will be made up from general revenues which pay for interest credits to the Trust Fund. Growing annual deficits are projected to exhaust HI reserves in 2019 and Social Security reserves in 2041. In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time.
The drawdown of Social Security and HI Trust Fund reserves and the general revenue transfers into SMI will result in mounting pressure on the Federal budget. In fact, pressure is already evident. For the second consecutive year, a "Medicare funding warning" is being triggered, signaling that non-dedicated sources of revenues—primarily general revenues—will soon account for more than 45 percent of Medicare's outlays. The President recently proposed remedial action pursuant to the warning in last year's report and, in accordance with Medicare statute, a Presidential proposal will be needed in response to the latest warning.
We are increasingly concerned about inaction on the financial challenges facing the Social Security and Medicare programs. The longer action is delayed, the greater will be the required adjustments, the larger the burden on future generations, and the more severe the detrimental economic impact on our nation.
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So maybe McCain's assessment isn't so far off?