The big news today on Capitol Hill is Republican Sen. Chuck Hagel’s plan to introduce the first Social Security bill of the current Congressional season. As The Note observes, the New York Times mentioned the senator’s plan, but skipped over the details, which we found later in the Los Angeles Times:
Hagel’s bill, the Saving Social Security Act, would allow workers under 45 — instead of those under 55, as the president has proposed — to move as much as 4 percent of their payroll tax into investment accounts. It also would raise the retirement age from 67 to 68 and reduce benefits for individuals who retire at a younger age. [Italics ours.]
“Not again!” we thought to ourselves. As we’ve been over many times before, the principles so far discussed by the White House have not included allowing individuals to divert 4 percent of their payroll taxes to individual investment accounts — rather, they would let individuals divert 4 percent of their total salary below $90,000 (as much as $3,600 per year). A mere 4 percent of the payroll tax — which itself is a total of 12.4 percent of a worker’s income — is a paltry sum, about one-half of 1 percent of a worker’s annual salary. Even over time, that wouldn’t build up much of a nest egg — certainly not enough to fulfill visions of a comfortable retirement before one shuffles off this mortal coil.
However, a thought occurred — before we set out to chide the Los Angeles Times, maybe we should check Sen. Hagel’s Web site to see whether it was he or the newspaper who flunked elementary math. Sure enough, a speech delivered by the senator this morning promises that “Upon passage of the bill, Americans 44 and younger will be given two voluntary options,” one of which allows Americans to “invest four percent of their payroll tax into a personal investment account.”
Next, we called the senator’s office, and they forwarded us a fact sheet that the senator’s staff put together as a reference for their plan. The bullet point outlining the plan on the website spelled it out correctly: “Individuals participating in the program will be allowed to invest four percentage points of their 12.4 percent payroll tax into a personal account.”
So either the senator has received some extremely poor economic advice or he has some extremely poor speechwriters. Either way, he’s got a staffing problem. For its part, the Los Angeles Times can hardly argue that it was only reporting the information given to it by the senator. Any trained eye that’s been following the Social Security debate would have — and should have — spotted this Waldo of a mistake a mile away.
–Thomas Lang
Thomas Lang was a writer at CJR Daily.