politics

Dumb and Dumber, Part II

March 9, 2005

On Monday we reported Sen. Chuck Hagel’s astounding misunderstanding of his own plan to overhaul Social Security. The senator spent the day gallivanting around telling people that he was calling for private investment accounts of up to 4 percent of everyone’s payroll tax, when in fact his plan calls for private accounts of as much as 4 percent of total salary, or roughly 30 percent of total Social Security taxes.

If Hagel wants to go around mischaracterizing his own proposed legislation, then more power to him. We monitor the press, not politicians. For that reason, we objected to a Monday Los Angeles Times piece that took Hagel at face value without calling Hagel’s staffers to verify the facts on his actual proposal. Last night, the Los Angeles Times got some company. Chris Matthews’ evaluation of the Hagel plan was even more objectionable than the newspaper’s. Here’s an abbreviated transcript of the “Hardball” interview from MSNBC:

Hagel: … Private accounts, voluntary private accounts, by the way — no one would be mandated to go into a private account system — would take 4 percent of the payroll tax today, those under age 45, and start building private accounts. There would still be a guaranteed Social Security benefit at the end of the retiree’s working age, as well as the private accounts …

Matthews: Let me get to the basic math, senator. Right now, a person who works has to pay 6.2 percent of what they earn up to $89,500. You would — what would they have to pay under your plan?

Hagel: I don’t raise the taxes on anyone.

Matthews: But do you …

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Hagel: The base doesn`t change either, Chris, up to $90,000.

Matthews: But up to 6.2 percent, you are putting two-thirds of it into the personal accounts?

Hagel: That 4 — well, there’s more than 6.2 percent that goes into that Social Security. A total of 12.4 percent goes in.

Matthews: Right.

Hagel: Because of employer, employee.

Matthews: So you would take 4 percent of the 12.4?

Hagel: That’s right. That would go into a personal account. That’s voluntary. You can either do that or stay in the old system.

Matthews: OK. [Italics added.]

No, not so OK. As we pointed out on Monday, 4 percent of 12.4 percent comes to a paltry one-half of 1 percent of a worker’s salary — hardly enough to build up a nest egg, let alone a safety net.

It’s hard to say which is more exasperating: A leader in the senate unable to grasp the details of his own scheme to fiddle with America’s pension plan, or a leader in the press unable to point out the senator’s mistake.

One thing for sure: Neither guy has a grasp on the difference between four and thirty.

–Thomas Lang

Thomas Lang was a writer at CJR Daily.