Wall Street Journal columnist John Fund and FOX News Live anchor David Asman both echoed FOX News Washington managing editor Brit Hume's distortion of a quote by former President Franklin Delano Roosevelt to claim that Roosevelt supported “supplant[ing]” government funding of Social Security with private accounts. In fact, Roosevelt advocated “voluntary contributory annuities” -- which differ significantly from private accounts -- to supplement guaranteed Social Security benefits and never proposed replacing Social Security benefits with private accounts.
In the February 4 edition of the Wall Street Journal's OpinionJournal.com “Political Diary” (subscription only, but partially reprinted here), Fund followed Hume's example -- which prompted Air America Radio host Al Franken to call on Hume to resign -- by distorting the same quote from Roosevelt's January 17, 1935, address to Congress. Fund falsely asserted that Roosevelt's “call for the establishment of Social Security directly anticipated today's reform agenda” for private accounts:
They [congressional Republicans] note that in an address to Congress on January 17, 1935, President Roosevelt foresaw the need to move beyond the pay-as-you-go financing of the current Social Security system. “For perhaps 30 years to come funds will have to be provided by the States and the Federal Government to meet these pensions,” the president allowed. But after that, he explained, it would be necessary to move to what he called “voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age.” In other words, his call for the establishment of Social Security directly anticipated today's reform agenda: “It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans,” FDR explained.
ASMAN: Democrats used a statue of FDR to condemn President Bush's plan to privatize at least part of Social Security. But did the founder of Social Security actually have the same thing in mind? Last week Brit Hume dug up a 1935 FDR speech in which President Roosevelt seemed to suggest he favored private Social Security accounts. But on Friday, former labor secretary Robert Reich disputed that on [FOX News'] The Big Story [with John Gibson].
REICH [video clip from the February 4 editon of The Big Story]: I know what happened, and FDR was talking about not private Social Security accounts, he was talking about separate Social Security accounts -- exactly the system we have today.
ASMAN: That was Robert Reich on The Big Story. Well, here's the exact quote of FDR's from 1935, quote “It is proposed that the Federal Government assume one-half of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans -- Voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age.” Does this sound like the system we have today? Well, you decide.
But neither Asman nor Fund provided “the exact quote of FDR's,” as Asman claimed. As Media Matters for America has noted, Roosevelt was not advocating that the present system of guaranteed Social Security benefits “ought to ultimately be supplanted by self-supporting annuity plans.” Rather, he was proposing that a system of both mandatory contributions -- today's Social Security -- and voluntary annuities would eventually eliminate the need for a different fund that was established to provide pension benefits to Americans who were already too old in 1935 to contribute payroll taxes to the Social Security system.
Here is the context of Roosevelt's 1935 speech:
In the important field of security for our old people, it seems necessary to adopt three principles: First, non-contributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps 30 years to come funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities, which in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans.
Further, while Roosevelt envisioned some form of “voluntary contributory annuities” to supplement Social Security, Fund and Asman erroneously equated those annuities with Bush's proposed private investment accounts. The voluntary annuities would differ from private accounts in that their funds would be deposited into and paid out of the Social Security trust fund, and they would provide a government-guaranteed benefit like mandatory contributions, as Edwin Witte, executive director of the Committee on Economic Security (CES), noted during 1935 congressional hearings on Roosevelt's Social Security bill.
Finally, in addition to distorting Roosevelt, Fund quoted an anonymous House Republican who suggested that Bush's proposal for private accounts could meet Roosevelt's “concerns on how to make Social Security solvent” -- even though Roosevelt was not addressing solvency and the White House has conceded that private accounts would not tackle that problem:
“What Roosevelt was talking about is the need to update Social Security sometime around 1965 with what today we would call personal accounts,” says one top GOP member of the Ways and Means Committee. “By my reckoning we are only about 40 years late in addressing his concerns on how to make Social Security solvent.”