Make your way to the White House fact sheet released after the president’s press conference last Thursday night, and you’ll read that “This Reform Would Solve Approximately 70 Percent Of The Funding Problems Facing Social Security.”
Looking over today’s report in the Christian Science Monitor, which is more or less par for the mainstream press, it appears that newshounds agree. The Monitor tells us that the president’s Social Security proposal would “address about 70 percent of the projected shortfall in Social Security.” So, looks like the White House press office was dead-accurate in its summary of the president’s plan.
Or was it?
We were happily reading a report from the Financial Times when something started smelling a little fishy: “Without providing details, ” the Times reported, “the White House said that progressive indexing could take care of as much as 70 percent of the long-term funding gap.”
“Without providing the details”?
And what details might those be?
Primarily, the money needed to fund the Social Security program’s obligations to the disabled. The 70 percent figure Bush cited is based on the original Pozen plan, named for Robert Pozen, an investment executive and a Democratic member of Bush’s 2001 Social Security Commission. However, while Bush did endorse progressive price indexing — the key component to Pozen’s plan — in the president’s variation, benefits for the disabled would not be cut. Cuts in benefits to the disabled, it turns out, account (PDF) for one-sixth of the Pozen plan’s total savings.
One-sixth of total savings makes a difference. According to Jason Furman, an economist working with the Center on Budget and Policy Priorities, a group that opposes Social Security privatization, “If the president has the same benefit cuts [as the Pozen plan] but protects disability benefits and has a new poverty-level minimum benefit, then his plan would solve only 57 percent of the problem.”
(A couple intrepid reporters with the Los Angeles Times and Investor’s Business Daily have already pointed this out.)
As the president continues to promote this plan — he is scheduled to speak in Mississippi tomorrow — it’s important for reporters to remember that Bush’s plan is not an exact copy of the Pozen plan.
For instance, the Pozen plan calls for private accounts to which 2 percent of a worker’s taxable salary would be shunted, rather than the 4 percent the Bush plan calls for. Consequently, the Bush plan would require borrowing more than the $2 trillion that the Social Security actuaries estimated would need to be borrowed under the Pozen plan.
God is in the details, according to a saying variously attributed to both Le Corbusier and to Mies van der Rohe.
Apparently, so is the devil.
–Thomas Lang
Thomas Lang was a writer at CJR Daily.