BUDGET BABEL: Babel concerning what adds to the deficit!

WEDNESDAY, DECEMBER 12, 2012

Interlude—What Durbin said: Social Security has existed for a long time—and journalists still don’t know how to discuss it.

As a case in point, consider what Glenn Kessler said.

Let’s say it again—we’re not trying to single out Kessler. As recently as September 2000, we publicly judged that he might even be “The Man.” And his recent difficulty with Social Security is hardly unique to him.

That said, Kessler had a very hard time explaining Social Security in a recent piece in the Washington Post. To show you had bad this project can get, consider the way Kessler started.

Senator Richard Durbin had made a statement about Social Security and the deficit. As he started his Fact-Checker piece, Kessler quoted something Durbin said, then made a weird admission:

KESSLER (12/2/12): "Social Security has not added one penny to the deficit."
—Sen. Richard J. Durbin (D-Ill.), Nov. 27, 2012

In 2011, we evaluated a similar statement about Social Security and gave it a relatively rare rating—"true but false”—which seemed to please no one. Yet as the "fiscal cliff" negotiations have heated up, Democrats have once again been using this talking point to shield Social Security from the chopping block.

Say what? In late November, Durbin said that Social Security hasn’t added one penny to the deficit. Last year, Kessler examined a similar claim—and he judged it “true but false!”

According to Kessler, this rating “seemed to please no one.” Perhaps you can understand why!

So it goes when journalists explain the workings of this program. Twenty-nine years after Reagan and O’Neill produced their famous revision of Social Security, journalists still have a very tough time explaining basic aspects of the venerable program.

So it was when Kessler “fact-checked” Senator Durbin’s recent statement. On November 30, his piece appeared on-line. On Sunday, December 2, it appeared in the hard-copy Post.

In our view, Kessler’s piece is a terrible mishmash. We can hardly find a paragraph which doesn’t include some sort of problem—an apparent self-contradiction; the insertion of an irrelevant fact; a distracting example of technical talk; a logical leap which goes unexplained.

But this is pretty much par for the course when major journalists attempt to examine this seminal program. When it comes to basic aspects of Social Security, we live inside a Babel—and we always have.

Tomorrow, we’ll plow through basic parts of Kessler’s piece, noting the chaos along the way. For today, let’s take a fuller look at what Durbin said—and consider what he might have meant.

Kessler is quoting a remark by Durbin in a speech at the Center for American Progress. In his speech, Durbin discussed the way the “fiscal cliff” issues should be resolved.

In this part of Durbin's speech, he discussed Social Security:

DURBIN AT CAP (11/27/12): Now let me come to the most painful topic of all for progressives, entitlements. Social Security was included in the Simpson-Bowles commission report. I didn't agree with every aspect of it, but I thought that it was a sensible approach to breathing life into Social Security beyond its current longevity.

I was elected in 1982 to the House, came here in 1983 and was told that Social Security is on its way out. Six months and we'll be out of money. And so we rolled up our sleeves, came up with a bipartisan solution with Speaker O'Neill and President Reagan that ultimately bought over 50 years of solvency for Social Security.

What did we do? We raised the retirement age, we raised the payroll taxes on Social Security, and we indirectly taxed Social Security benefits for the first time, and we bought more than 50 years of solvency.

Today Social Security, untouched, unamended, will make every promised payment for the next 22 years. You can't say that about much in Washington, can you? But in Social Security, you certainly can. And, you also have to add, Social Security has not added one penny to the deficit.

Now for those who say, “Good reason to push it off the table and wait till another day,” I would add a note of caution. Small changes made today in Social Security will play out over the long run to buy us solvency for a long period of time. I think we should take Social Security off the table for the current fiscal cliff and deficit discussion but be very honest about what we're going to achieve in the near term.

I think we should create the equivalent of a Simpson-Bowles commission for Social Security and give them eight months to a year, a directive to come up with a plan to buy 75 years of solvency for Social Security and then bring it to the floor for a vote and allow any bipartisan group of senators or congressmen who can come up with a credible plan that meets the same goal to offer theirs to be voted on in the Senate and the House.

[...]

Social Security's important. It's important to us and to our kids and grandchildren. And if it is, even though it's not part of the fiscal cliff discussion, I think we should create a commission that will report back to Congress for a vote by the end of the next calendar year.

Durbin said the Congresss should act to extend the solvency of this program. But what did he mean by the highlighted statement about Social Security and the deficit?

In Kessler’s fact-check piece, he says “Durbin’s office declined to comment” on that point. On balance, we think that’s unfortunate. For decades, voters have been assailed by misleading claims from the right about Social Security. As these claims have (vastly) misled the public, the liberal world has napped in the woods, refusing to comment, challenge, resist, dissent, explain or simplify.

We liberals! For decades, we’ve have been too lazy, too feckless, too uncaring to challenge the flow of disinformation. Even today, do you know where you can go to find a clear, simple explanation of the point Durbin was making?

We don’t know where to go for that. But we could go a hundred places to find the relentless disinformation—the disinformation which has led the public to think that Social Security “won’t be there for them” unless major changes are made.

What did Durbin mean by his remark? Presumably, something like this:

In the 1983 “bipartisan solution” to which he refers, a long-term agreement was reached by a Republican president and a Democratic congress. Starting that year, workers would submit more in payroll taxes each year than was needed for that year’s payments to Social Security recipients.

Those surplus payments would form a “trust fund”—and a rather large trust fund at that. This surplus money (this “trust fund”) would be used to cover the growing costs of Social Security when those multitudinous baby boomer workers began to retire.

Everyone understood the deal. Year after year, baby boomers submitted more money than was needed that year. That extra money would be used to cover the costs of their retirement when they began to retire.

Now, those workers have begun to retire—and some people want to renege on the deal! The system is working exactly the way it was designed to work in 1983—and yet loud voices like that of Charles Krauthammer are saying the deal must be thrown down the drain because “the trust fund is a fiction, a mere bookkeeping device.”

In a recent column, Krauthammer said that Social Security “adds $165 billion to the deficit” in 2012 alone. But how odd! In his speech, Durbin said the venerable program “has not added one penny to the deficit.”

What did Durbin mean by that? We think it’s a shame that he wouldn’t tell Kessler. We’ll assume he meant something like this:

Since the time of the Reagan/O’Neill revamping, workers have submitted trillions of dollars in excess Social Security payments! Every year, those workers paid in more money than was needed, in line with the 1983 deal—the deal everyone understood.

If workers have paid in trillions beyond what was needed, it’s easy to see why Durbin would say that they haven’t added to the deficit. That said, in his fact-check piece, Kessler focused on the idea that Social Security is adding to the deficit now.

Is that true? Is Social Security adding to the deficit now? According to Krauthammer, the program “adds $165 billion to the deficit” in 2012 alone. In Kessler’s piece, he says “the cash flow deficit was $58 billion” in 2012—and he says it will be $75 billion in 2013.

Is Kessler’s “cash flow deficit” the same thing as Krauthammer’s “deficit?” Judging from their dueling numbers, it doesn’t seem to be.

Next question:

Should Kessler’s “cash flow deficit” be regarded as a deficit at all? Given the historical lethargy of us liberals, this topic gets confusing real fast.

Is Social Security adding to the deficit this year? People like Krauthammer have worked for decades, conditioning voters to assume that such gloomy claims must be true. In reply, we liberals have slept in the woods, entertaining ourselves by telling the world how stupid the other tribe is.

You know—the other tribe? The tribe that has been kicking our asses as it confuses the voters?

The professors have taken a pass on this topic. (In fairness, many of them were busy in France.) So have the so-called liberal journals and the alleged liberal columnists.

So have Democratic pols, they who “decline to comment.” (They rarely decline to fund-raise.)

Tomorrow, we’ll look at what Kessler wrote about that statement by Durbin. Largely due to the absenteeism of the self-impressed liberal world, this seminal topic just flat isn’t easy, as Kessler proved last week.

Tomorrow: Ball of confusion