Brendan Nyhan

Thomas Lang, one of the indefatigable CJR Daily bloggers, claims in a new post that this passage from an AP report is mistaken:

President Bush, on a campaign-style road trip to pressure recalcitrant Democrats and reluctant Republicans on a Social Security, warned Friday against “scare tactics” in the burgeoning debate.

The president decried the kind of opposition campaigns now being waged against his proposals, saying they mislead seniors into thinking they won’t get the Social Security checks on which they depend.

Lang writes (italics in original):

There is strong opposition to Bush’s Social Security proposals. But we know of no example of opponents suggesting that current recipients of Social Security checks could be shortchanged by Bush’s plan. It’s an interesting accusation, but it’s one that no one has made. And AP owes it to its readers to point that out.

But Factcheck.org has made that precise accusation against MoveOn.org’s new TV ad, as I noted, and I think they’re correct about it. And here’s Terry McAuliffe doing the same thing in an email to supporters that I flagged a few weeks ago for suggesting that Bush is going to cut Social Security for today’s seniors:

We will fight President Bush and his Republican cronies as they try to:

…Undermine Social Security for today’s seniors and future generations of retirees by privatizing the system.

I’m sure there are more examples – feel free to add them in comments below.

The always insightful Jonathan Chait makes the definitive, devastating case against Howard Dean becoming chairman of the DNC:

The conventional rap against Dean as DNC chairman is essentially the same as the conventional rap against him as presidential candidate a year ago. Namely, he reinforces all the party’s weaknesses. Democrats need to appeal to culturally traditional voters in the Midwest and border states who worry about the party’s commitment to national security. Dean, with his intense secularism, arrogant style, throngs of high-profile counterculture supporters and association with the peace movement, is the precise opposite of the image Democrats want to send out.

The conventional rap is completely right. But, in a way, Dean is even less suited to run the DNC than he is to run for president.

The DNC chairman has two main jobs. First, he transmits the party’s message — an important role when the party lacks a president and majority leaders in Congress. This job requires one to master the dismal art of “message discipline,” boiling down the party’s ideas into a few simple phrases and repeating them over and over until they have sunk into the public consciousness.

It’s a role for which Dean is particularly ill suited. During his campaign, remember, he fashioned himself a straight talker, delighting reporters by repeatedly wandering “off message.” On the plus side, he won friends in the media by appearing honest and human. On the negative side, he did himself enormous damage, when, for example, he suggested that he wouldn’t prejudge Osama bin Laden until he had been convicted in a court of law.

For presidential candidates, the negatives of “straight talk” usually outweigh the positives… In a job like party chairman, a loose cannon is nothing but downside.

The second major task of the DNC chairman is to run the party organization. And here, if this is at all possible, Dean looks even worse. Garance Franke-Ruta, who wrote sympathetic Dean pieces in the American Prospect during the campaign, spoke with several former Dean staffers. One called the candidate “a horrible manager” and added, “I wouldn’t trust him to run a company.” Another called his management style “just a disaster.”

The Washington Post fills in more details on how private accounts are not a free lunch. Note: The Post has corrected the story linked above, so I deleted the quote from the original version that was here before and added the new one below, which explains how the “benefit offset” works. Somehow, this didn’t make it into the State of the Union…

[U]nder the proposal, workers who opt to invest in the new private accounts would lose a proportionate share of their guaranteed payment from Social Security plus interest. They should be able to recoup those lost benefits through their private accounts, as long as their investments realize a return greater than the 3 percent that the money would have made if it had stayed in the traditional plan.

That 3 percent level is the interest rate earned by Treasury bonds currently held by the Social Security system.

The Post mistakenly reported that the balance of a worker’s personal account would be reduced by the worker’s total annual contributions, plus 3 percent interest. In fact, the balance in the account would belong to the worker upon retirement, according to White House officials.

…What Bush did not detail is how contributions in the account would reduce workers’ monthly Social Security checks. Under the system, described by an administration official, every dollar contributed to an account would be taken from the guaranteed Social Security benefit, with interest.

“The person comes out ahead if their personal account exceeds a 3 percent real rate of return, which is the rate of return that the trust fund bonds receive,” the senior administration official said. “So, basically, the net effect on an individual’s benefits would be zero if his personal account earned a 3 percent real rate of return. To the extent that his personal account gets a higher rate of return, his net benefit would increase.”

If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today’s dollars. All of that money would be the worker’s upon retirement. But guaranteed benefits over the worker’s lifetime would be reduced by approximately $78,700 — the amount the worker would have contributed to Social Security but instead contributed to his private account, plus 3 percent interest above inflation. The remainder, $21,100, would be the increase in benefit the worker would receive over his lifetime above the level he would have received if he stayed in the traditional system.

Under the system, total benefit gains may be minimal. The Social Security Administration, in projecting benefits under a partially privatized system, assumes a 4.6 percent rate of return over inflation. Thus gains in an account would be offset by a reduction in guaranteed benefits equal to 70 percent of the account’s balance.

The Congressional Budget Office, Capitol Hill’s official scorekeeper, assumes a 3.3 percent rate of return. Under that scenario, the full amount in a worker’s account would be reduced dollar for dollar from his Social Security checks, for a net gain of virtually zero.

If investments earned less than 3 percent a year above inflation, a worker would do worse in total benefits than he would have done in the traditional system.

A prize to Andrew Sullivan, who wrote this while blogging the SOTU, in which Bush claimed that his upcoming budget “stays on track to cut the deficit in half by 2009”:

FISCAL SANITY? I’m having trouble believing this president on that particular issue. 2009? I thought the goal was 2008. And why not balance the budget? You know: like Clinton did.

He’s absolutely right, unlike Robert Samuelson and many others in the media who have completely forgotten the history of these “plans”.

To review: In July 2003, the Mid-Session Review was released by Bush’s Office of Management and Budget (2.6 MB PDF). It promised that that the deficit would be cut in half by 2008, a claim the administration touted intensively for months. But as we recounted at Spinsanity, the “plan” excluded a number of costs that the administration supported.

In early 2004, a second “plan” to cut the deficit in half was released that also excluded a number of costs supported by the administration. This new five year plan pushed the target date back to 2009. (Note: We recount all of this in Chapter 7 of All the President’s Spin if you want to read the full story.)

Now Bush is again touting the so-called plan, but once again it excludes a series of likely costs and makes implausible budgetary assumptions. In addition, the White House is using an inflated deficit projection as the original figure that is being cut in half (rather than the actual deficit for 2004) to make their goal easier to achieve.

Will reporters explain this pattern of deception and point out how the administration keeps shifting the goalposts? Do they even remember any of this?

Calvin Woodward explains the (misleading) free lunch implications of the SOTU:

The devil was in the missing details Wednesday night when President Bush showcased his Social Security plan and claimed advances on jobs and against terrorism that don’t tell the full story.

Bush explained in detail how, under his proposal, younger workers would be able to divert some of their Social Security payroll taxes into private accounts “so you can build a nest egg for your own future.”

Nowhere in his State of the Union speech did he give the other side of the equation — that Social Security benefits for those workers would be reduced as a result. He stated “your account will provide money for retirement over and above the check you will receive from Social Security,” without explaining that check would be smaller.

Moreover, he seemed to issue a guaranteed return on investment for people putting some of their retirement money in the market, saying: “Your money will grow, over time, at a greater rate than anything the current system can deliver.”

Although his plan promises checks and balances to ensure such money isn’t frittered away on risky investments, it does not come with a guarantee of performance exceeding benefits of the current system.

In case you missed it, Will Saletan’s take on Hillary Clinton’s abortion speech is an absolute must-read. I’m pro-choice, but the way most pro-choice politicians talk about the issue makes me nuts. It ends up sounding pro-abortion because of the way that the abortion rights lobby has pulled the party to the left on the issue. Finally, someone is trying to change that:

Abortion is “a sad, even tragic choice to many, many women,” said Clinton. Then she went further: “There is no reason why government cannot do more to educate and inform and provide assistance so that the choice guaranteed under our constitution either does not ever have to be exercised or only in very rare circumstances.”

Does not ever have to be exercised. I searched Google and Nexis for parts of that sentence tonight and got no hits. Is the press corps asleep? Hillary Clinton just endorsed a goal I’ve never heard a pro-choice leader endorse. Not safe, legal, and rare. Safe, legal, and never.

Once you embrace that truth—that the ideal number of abortions is zero—voters open their ears. They listen when you point out, as Clinton did, that the abortion rate fell drastically during her husband’s presidency but has risen in more states than it has fallen under George W. Bush. I’m sure these trends have more to do with economics than morals, but that’s the point. Once we agree that the goal is zero, we can stop asking which party yaps more about fighting abortion and start asking which party gets results.

The Center on Budget and Policy Priorities nails the phase-in scam I wrote about before, which was described by a “senior administration official” in a briefing today:

The senior official said the borrowing costs over the first ten years — 2006- 2015 — would be $664 billion without interest costs, and $754 billion when interest costs on the debt are included.

These figures are misleadingly low.  They are generated by using a ten-year budget window (2006- 2015) that includes only five years of the fully phased-in plan.  The plan would not be launched until 2009 and not be in full effect until 2011.

Over the first ten years that the plan actually was in effect (2009-18), it would add more than $1 trillion to the debt.  Over the next ten years (2019- 28), it would add over $3.5 trillion more to the debt.  All told, the plan would add more than $4.5 trillion to the debt over its first 20 years.

Sometimes Mickey Kaus’ more-cynical-than-thou attitude drives me nuts, but I have to agree with his take on John Kerry’s insufferable performance on “Meet the Press”:

Patriot of the Week Award goes to Sen. John Kerry for appearing on Meet the Press and being just as petty, negative, solipsistic (“I laid out four steps”), self-serving, inarticulate and semi-delusional as his many reluctant supporters feared he might be in office, thereby allowing millions of Democrats and independents to feel more comfortable with their president and putting in place the preconditions for a vast, bipartisan coming-together surge of national unity! … A deeply satisfying performance. … He could have been good! But no–he chose instead to sacrifice his own popularity for his country. … 1:27 P.M.

Call me crazy, but I don’t think heart surgeons should be saying things like

The central problem for Dr. Frist is that he needs the Democrats, or at least a few of them, but he also needs to hold together a sprawling, predominately conservative Republican caucus. So he promises more bipartisanship, but only to a point.

Thomas Lang of CJR Daily has posted a nice guide to Social Security buzzwords and spin for the State of the Union tonight. Reporters may never figure out how to cover this issue properly, but hope springs eternal. In any case, it’s well worth a read.