Tuesday, May 03, 2005

How to Talk About Social Security 

Listen to Bob Somerby--he has the aura of wisdom about him:
HOW TO CUT THE CRAP: Yes, this is the semantic dispute which actually makes a big difference. And yes, a semantic war is coming. Morton Kondracke peddled the piffle on Special Report just last night:
KONDRAKE (5/2/05): [Senator Leahy] talks about benefit cuts, and in fact, they are reductions of increases.
There are no "benefit cuts" in Bush’s plan. By contrast, Bush has proposed "increases." Moments later, a certain shrink reinforced Mort’s misleading claim:
KRAUTHAMMER: [Democrats] say the Republicans want a cut, as you had in the headlines. Disingenuous, but nonetheless, "want to cut your benefits."
Would Bush’s plan "cut" SS benefits? Or would everyone get an "increase?" This semantic dispute really counts. And Dems have to know how to play it.

Having said that, and with massive respect to Paul Krugman—the massive respect he has massively earned—we don’t think his Monday column used the most effective construction. The New York Times adopts his construction in today’s editorial:
NEW YORK TIMES EDITORIAL (5/3/05): Mr. Bush says these cuts would enable the system to continue paying benefits at the current level to the 30 percent of recipients who now make less than $20,000. But fully two-thirds of retirees rely on Social Security for more than half of their income. Moreover, the Bush plan gives the false impression that the wealthiest beneficiaries would bear the most pain. That's not the case. The wealthier one is, the lower the percentage of retirement income coming from Social Security, so even a big cut has little impact. By 2075, an average worker's benefit cut would equal 10 percent of pre-retirement income; a millionaire's reduction would be only 1 percent.
That may be true, but it’s tortured, and hard to follow—and therefore, it’s easy to argue against. "Replacement rate" is the construction Dems should use to explain how Bush’s proposal really works. Here’s what the Times editorial should have said:
REVISED EDITORIAL: Mr. Bush says these cuts would enable the system to continue paying benefits at the current level to the 30 percent of recipients who now make less than $20,000. But even if that turns out to be true, all other groups will have their benefits cut—by substantial amounts. At present, for example, a worker at the upper end of the middle class may get as much as 42 percent of his income replaced by his Social Security check. But this would change under Bush’s plan. By the year 2061, such a worker would only get 22 percent of his income replaced. By 2075, this worker is down to 12 percent. Simply put, this would change the face of middle-class retirement.
For the record, an average-income worker goes from 36 percent replacement now to 26 percent in 2075. Would Kondracke and Krauthammer describe these changes as "increases?" Whatever you call it, these are the data that help people see how the Bush plan actually works. (We have taken all our numbers from Times reports in the past week.)

"Replacement rate" is the way to go in showing what this proposal does. When the hacks say that everyone gets an "increase," this is the simple way to counter. Everything else just breeds confusion. Dems need to get on this plan.
Now go forth and use "Replacement Rate," please.
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