The Return of Alan Simpson

Parsing his latest thoughts on Social Security

Alan Simpson, the co-chair of President Obama’s now-defunct deficit commission, showed up on Fox News the other day to talk about—what else—the deficit and Social Security. Host Neil Cavuto quizzed the former Wyoming senator about the recommendations of his commission, the president’s speech, and other matters.

Cavuto asked him about the State of the Union address, where the president mentioned the need to strengthen Social Security without putting current retirees at risk and without slashing benefits for future generations. Simpson replied it was “an excellent speech,” and quickly transitioned to one of his favorite topics—the AARP. (All good media-trained guests are supposed to do that.) He said he and Erskine Bowles (the other commission co-chair) asked the AARP if there were any patriots in their organization “or are you all marketers?” He said:

They blanched a little and played the violin. They have just sat like lumps, sphinxes. That is a—it’s a—it’s a cruel organization. They sell things. They sell, you know, these airline discounts, insurance discounts, their magazine, everybody over 50—and the articles are terrific.

Cruel because they sell things? That puts AARP alongside every corporation in America and a bunch of nonprofits, too—a few insurance companies, for example.

Simpson then moved to what he called a “distortion.” At this point, the conversation had become so muddled it was hard to see who was distorting what. Then he told Cavuto that the commission had said something about privatizing Social Security. “We had nothing in there about [that],” he said. Is Simpson acting like the Red Queen? A check of the commission’s report shows that it did indeed recommend the beginning of a “broad dialogue on the importance of personal retirement savings,” and goes on to say:

Americans need a fiscally responsible personal retirement savings system that is advance funded, supplements the pay-as-you-go Social Security system, and accumulates funds for investments in business and infrastructure.

That sure sounds like what George W. Bush recommended, and everyone called it “privatization.”

Cavuto didn’t pin down Simpson on these points, but he tried to find out who was “safe” from the benefit cuts recommended by the commission. Simpson mumbled something about how Social Security “was never set up as a retirement. It was an income supplement.” Cavuto said he knew that, but pressed on about who would be affected by raising the retirement age. Simpson replied that in 2050 the age would go up to sixty-eight “for people who are able to work, not the disabled, the people who work in ditches.” He had mentioned the ditch digger earlier in the interview, saying that the ditch digger and the steelworker would not have to extend their retirement age, presumably because of a hardship exemption. Wonder if those are the “lesser people” he had in mind last year?

Cavuto asked if it was safe to say “that if you are even fifty-two or fifty-three and over, you are not affected by what Alan Simpson wants to do?” Simpson evaded the question, saying instead:

The most vicious letters that I get are from people over 70. I have never seen anything like that. They feel: I have put it in from the beginning, you big fink—and other beautiful phrases which just are lyrically profane. And they do that to me. And it’s lovely.

Not much illumination there, so Cavuto tried once more asking if Simpson et al planned to protect present beneficiaries, even those who might be ten years away from retirement. It’s almost certain that few Fox viewers understood the gobbledygook that followed. Simpson said that they are going to “ding the guys in the higher income level. We change the bend points. The guy who has got more is going to put more in. And that is the way it works.” Yes, it does, but what does changing the bend points mean?

Either Cavuto himself was flummoxed or saw no reason to dwell on the arcane aspects of calculating someone’s benefits, so he moved on to raising the tax rate and the FICA limit—the amount of wages subject to the Social Security tax. Simpson explained that the commission proposal would raise the amount from about $106,000 to $190,000 by 2015.

Our take on the interview: Simpson’s colorful interview might make for good television. But as explanatory journalism, it missed the mark. For the record: the bend points are elements of Social Security’s benefit formula, which is weighted so that a low wage earner will receive a greater percentage of preretirement income than a high wage earner. Someone with low wages typically gets about 45 percent of pre-retirement earnings (inflation adjusted). A higher-income worker gets a larger benefit in dollar amounts, but it replaces less preretirement income. The deficit commission proposed gradually changing the bend points to make the formula a bit more progressive while cutting benefits for higher-income workers. In Simpson speak, that means to “ding” them.

For more from Trudy Lieberman on Social Security and entitlement reform, click here.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman. Tags: , , , , ,