Susan Molinari lies about SS on Hardball and Matthews says nothing

[papau]

http://mediamatters.org/static/video/hardball-200502250007.wmv
http://mediamatters.org/items/200502250008
On Hardball, Ketchum executive falsely defended Bush's Social Security plan

On the February 24 edition of MSNBC's Hardball with Chris Matthews, former Representative Susan Molinari (R-NY), president of the public affairs unit of public relations firm Ketchum Inc., falsely asserted that President Bush's plan to allow workers to divert payroll taxes from Social Security into private accounts "doesn't change anything for people in terms of that guarantee from today. If anything, it strengthens it for younger people." Molinari also erroneously suggested that, for those who opt not to adopt private accounts, Bush's plan will not "change the way you currently participate in Social Security." In fact, under the model that is widely expected (as reported n these media reports http://www.usnews.com/usnews/biztech/articles/050117/17social_2.htm http://www.usatoday.com/news/washington/2005-01-23-social-security-gop_x.htm http://www.washingtonpost.com/wp-dyn/articles/A41581-2005Jan1.html http://www.boston.com/news/globe/editorial_opinion/oped/articles/2004/12/31/risk_and_privatized_social_security/) to form the basis of the reform plan Bush will propose, beneficiaries will face substantial cuts in guaranteed benefits compared to what current law promises, and those who choose to set up private accounts will face additional cuts in guaranteed benefits beyond that.

As Media Matters for America has noted http://mediamatters.org/items/itembody/200501250005 , "Model 2" from Bush's 2001 Commission to Strengthen Social Security calls for a reduction in benefits for all future beneficiaries. Initial benefit levels would be set according to the rate of inflation, instead of the rate of wage growth during a worker's lifetime (as it is now), which would result in lower benefits than promised under current law. More recently, a leaked memo about Bush's plans for Social Security from Peter H. Wehner, head of the White House Office of Strategic Initiatives, also endorsed this concept.

Further, the Bush administration has explained that those who opt for private accounts will face additional cuts. The Washington Post reported on February 4: "The White House offered further explanation of President Bush's Social Security proposal yesterday, detailing how contributions to new personal investment accounts would be offset by dollar-for-dollar reductions in Social Security's guaranteed benefits."

And while Molinari's suggested that Bush's plan will "strengthen" Social Security for younger workers, private accounts would result in increased financial risk to individuals by shifting money out of Social Security and into the stock market. As the Post noted, if the money in an individual's private account earned less than 3 percent above the rate of inflation, the worker would receive less than he or she would have if all their payroll taxes remained within the system.

<snip>CHRIS MATTHEWS (host): We got a poll here, an NBC poll last week that came out, that nobody has paid much attention to. It says that by 2 to 1, the American people are more insistent on the guaranteed part of Social Security, the insurance part, we're going to get the money, than they are on this option of going to a personal account.

MOLINARI: Sure, I actually think that the reverend is right, that that is what the people are concerned about right now. I think the Republicans have failed to answer that question as articulately as they can, it's the plan that has taken place, but I think it is something they will overcome. But it has definitely put members of congress at a disadvantage as they go home and try to sell the personal savings account while they are failing to give people the kind of comfort and confidence that they should have, because the Bush plan does guarantee that. It doesn't change anything for people in terms of that guarantee from today. If anything, it strengthens it for younger people.

<...>

MOLINARI: Nobody is going to force you to take up a personal savings account and change the way you currently participate in Social Security.

[sickinohio]

1. I heard all of that and I am sick of that slobbering wimp

of a "fake" new journalist!!

[papau]

3. He wonders why folks think he is a conservative media whore - well

Chris certainly does not do much whoring for the liberal or even the Democratic Party point of view!

[iswitched]

2. Somethings not clear

"beneficiaries will face substantial cuts in guaranteed benefits compared to what current law promises, and those who choose to set up private accounts will face additional cuts in guaranteed benefits beyond that."


This really confuses me. Will the actual benefit be reduced in real dollar terms or is this a reduction in what it would have been if left untouched and assuming the whole system doesn't sink? If those who choose the private investment accounts will lose money then why would anyone choose them?

[OKNancy]

4. I think it is something like this

If a person puts part of their money in the private system, then their part that is left in the "regular" Social Security system will be cut back. One problem is that there is no actual legislation to look at. It's all speculation right now.

My opinion is, if we keep up the pressure, this will be one of Bushes biggest defeats. I am hearing too much displeasure from both Democrats and Republicans.

And....Welcome to DU.

[papau]

5. I'll try to answer below

"Will the actual benefit be reduced in real dollar terms"

Under option 2 which the Whitehouse has said is the basis for its eventual plan, the benefit cuts - for everyone - are very real - for example the change from wage index to CPI index in obtaining the average covered salary from which your benefits are calculated is a 50% reduction over 50 years. Any increase in the full benefit retirement age from the current Reagan Law mandated age 67 (fully in effect in 2027) means that early retires at 62 are no longer 5 years early - getting a 5 year reduction of near 60%, but then they are even more "early" if they retire at 62 - and will get a greater than 60% reduction.

"or is this a reduction in what it would have been if left untouched and assuming the whole system doesn't sink?"

Since under project 3 Social Security never sinks, we can call projected benefits THE BENEFITS - so yes the reductions are compared to the current promised and most likely to be given benefits under SS.


If those who choose the private investment accounts will lose money then why would anyone choose them?

They would not choose them - except the GOP has a sales pitch of "ownership society" - meaning you give up todays very large Soc Sec provided survivors and disability benefits, and in return for accepting a smaller guaranteed benefit under those programs, your heirs get to keep your account balance if you die before retirement. If you die after retirement, the effect of the forced annuity purchase is to either give you less in total than current benefits, or if you got lucky and for 40 years averaged 7%, why you'd have the option to get either a bit more than current benefits, or about 20% of the account as an inheritable asset for the kids - BUT OH BY THE WAY - IF YOU GET LUCKY, AND HAVE AN ASSET LEFT OVER AT YOUR RETIREMENT, YOU SHOULD DEDUCT FROM THAT ASSET ALL THE TAXES YOU HAVE PAID OVER THE YEARS TO FINANCE THE PERHAPS $5 TRILLION OF "TRANSITION COSTS" THAT BUSH WANTS TO BEGIN INCURRING IN THE FEDERAL BUDGET IN THE NEXT FEW YEARS!!!!