Oct 1 2011

Samuelson vs. The Elderly

One columnist’s war on retirement programs

Robert Samuelson--Photo Credit: Washington Post

Robert Samuelson–Photo Credit: Washington Post

Nationally syndicated Washington Post columnist Robert Samuelson began a book event in 2009 (1/13/09) with a comment that could be interpreted as either self-deprecating humor or defensiveness:

I am not an economist. I’m a journalist. And so that anything I say that seems contradictory to what a freshman in college would learn in your basic Principles of Economics course, I should be absolved of any sin for that, because as I say I am not a card-carrying member of the fraternity.

Despite having a name that’s fortuitously easy to confuse with prominent economic textbook writer Paul Samuelson, and despite his preoccupation with financial issues, it’s true that Robert Samuelson’s work will not teach you much about economics. His commentary represents a strain of sour, grumpy conservatism dressed up in green eyeshade concern about the nation’s fiscal distress. The themes are remarkably consistent over his career: the Social Security/Medicare/entitlement “crisis,” regular warnings about the destructive influence of the AARP and the need to slash spending to rein in budget deficits. Scanning the headlines of his columns gives one a Groundhog Day feeling, from “Social Security Is Middle-Class Welfare” (3/6/11) to “The Medicare Monster” (9/14/06) back to “Pam-pering the Elderly” (10/29/90).

Despite the obvious political tilt of his work, Samuelson often presents himself in his columns as a weary advocate for common sense—the only man in Washington willing to speak the hard truths. Samuelson (Newsweek, 9/27/10) recently lamented that in election seasons we “descend into soundbite economics” that only serve to remind us of the “dreary state of economic discourse.” Moments later, Samuelson explained that Barack Obama “constantly subverts confidence” since “the moratorium on deepwater drilling kills jobs,” and that potential tax increases on the wealthy were evidence of Obama’s “delusional approach.” Soundbite economics might be a step up.

Samuelson’s not an intensely partisan pundit; instead, his advocacy is a consistent, mostly colorless attack on safety net programs like Social Security and Medicare. (Though he does occasionally stray into other debates—see sidebar, p. 6.) Samuelson’s fiscal hawkishness is so extreme that a Washington Post headline like “It’s the Elderly, Stupid” (7/29/11) is a fairly accurate summary of the column that appeared below it.

“Older Americans do not intend to ruin America,” Samuelson explained, “but as a group, that’s what they’re about.” He explained that “it’s hard to discuss the budget realistically if you ignore most of what the budget does.” And since much of what the budget does is pay for benefits and healthcare coverage for older Americans, those programs must be cut. The fact that Social Security benefits represent dedicated funds workers paid to the government that are now being redeemed is of no apparent relevance; Samuelson’s real point is that, well, those seniors are doing just fine without those Big Government handouts. “True, some elderly live hand-to-mouth,” Samuelson admitted, but “many more are comfortable, and some are wealthy.”

Samuelson cherry-picked figures from the Kaiser Family Foundation to show that the golden years are largely affluent ones. Among Medicare recipients, 25 percent had savings accounts “averaging $207,000 or more.” Hence, poverty among senior citizens is mostly a “myth.”

Looking at the same Kaiser report (6/9/11), though, you find that half of Medicare beneficiaries had annual incomes below $22,000, and less than $2,100 in retirement accounts. But in the world according to Robert Samuelson, public spending on healthcare and support for the elderly by definition “represent middle-class welfare.”

Which just so happens to have been theme of his Newsweek column (3/6/11) a few months earlier, “Social Security Is Middle-Class Welfare.” That piece was actually a response to critics of an earlier Samuelson attack on Social Security. Angry letters poured in pointing out that the substantial Social Security surplus is hard to square with Samuelson’s Social-Security-is-bankrupting-the-country diatribe. To which Samuel-son declared, “Wrong.”

But good luck finding a coherent explanation. Social Security, Medicare and Medicaid cost a lot of money, he explained, while “the trust fund’s $2.6 trillion would provide only 3.5 years of benefits.”

This would be a relevant retort if there were some plan to stop collecting Social Security taxes and sustain the program solely through the trust fund. Samuelson emphasizes that Congress has “repeatedly altered benefits”—which is not something anyone seems to deny. The argument is over whether benefits cuts are necessary. And for Samuelson, it seems, facts won’t get in the way of his entitlement-slashing mania.

One favored technique of Social Security critics is to lump the program in with Medicare, which faces an actual fiscal problem due to fast-rising healthcare costs. This has the advantage of turning a relatively stable program into a ticking fiscal time bomb.

“It makes no sense to separate Social Security from Medicare,” Samuelson wrote (1/14/05), because “most Social Security retirees receive Medicare.” Samuelson accurately noted that “Social Security is almost irrelevant” on its own, since Medicare’s problems are so much more significant. But it strangely becomes very relevant when he needs to write a column about the imminent collapse of SocialSecurityMedicare.

In one piece, Samuelson (1/27/11) attacked the notion that workers have paid for the benefits they will receive. This is a “myth,” according to Samuelson, since

most retirees receive benefits that far exceed their payroll taxes. Consider a man who turned 65 in 2010 and earned an average wage ($43,100). Over his expected lifetime, he will receive an inflation-adjusted $417,000 in Social Security and Medicare benefits, compared with taxes paid of $345,000, estimates an Urban Institute study.

As economist Dean Baker pointed out (1/27/11), that study actually found that such workers pay more in Social Security taxes than they receive in benefits. Samuelson gets around this inconvenient fact by combining Social Security with Medicare—whose inflated costs do outstrip taxes—in order to tell a single scare story about runaway “entitlements.”

And why haven’t politicians done something about the fiscal train wreck Social Security and Medicare are about to cause? In Samuelson’s world, they’ve been held hostage by those greedy elderly. “The great question haunting Washington’s budget debate is whether our elected politicians will take back government from AARP,” Samuelson explained (2/21/11), adding that it’s the lobby group for older Americans that “runs government budgetary policy, not presidents or congressional leaders.” He elaborated:

Its power derives from the fear it inspires in senators, representatives, presidents and political candidates. They worry that they’ll be assaulted and rejected by hordes of angry seniors infuriated by any possible loss of benefits and mobilized by AARP.

This was, like much of Samuelson’s rhetoric, nothing new. In a 2005 column (11/16/05) he declared: “AARP has become America’s most dangerous lobby. If left unchecked, its agenda will plunder our children and grandchildren.”

The only thing to hope for is a swift collapse of Social Security in order to force action, Samuelson argues (5/25/09):

It’s increasingly obvious that Congress and the president (regardless of the party in power) will deal with the political stink bomb of an aging society only if forced. And the most plausible means of compulsion would be for Social Security and Medicare to go bankrupt: Trust funds run dry; promised benefits exceed dedicated payroll taxes. The sooner this happens, the better.

It’s one thing to warn that a fiscal crisis is imminent. It’s quite another to hope that it happens in order to see a political outcome you favor. But for Robert Samuelson, the collapse of the U.S.’s entitlement programs is a feature, not a bug. He’s spent a couple decades saying so.

Sidebar: Do the Math: It’s the Immigrants

by Peter Hart

When he tires of taking on the elderly, Washington Post columnist Robert Samuelson occasionally strays into other political debates. He’s weighed in on climate change, for instance, suggesting that the danger it could pose was less certain than the Y2K computer bug (12/14/98): “Unlike many techno-controversies (say, global warming), the legitimacy of the Y2K problem was never in doubt.” The dawn of the Clinton administration was a sign to Samuelson (11/7/94) of a “regulatory juggernaut” that would be restricting smoking and “compelling banks to expand loans to minority borrowers.”

One of his more frequent targets in recent years, however, has been immigrants. In one column, Samuelson urged (3/8/06) that it was “time to build a real fence or a wall along every foot of the 1,989 miles of the U.S./Mexican border.” He did allow that this solution was not comfortable: “I do not like advocating a fence. It looks and feels bad. It’s easily stigmatized as racist.”

About a year later (9/5/07), Samuelson caused a stir when he alleged that new Census figures showed troubling news about poverty and Hispanic immigration that only Samuelson was brave enough to document. “As more poor Hispanics enter the country, poverty goes up,” Samuelson explained. “This is not complicated, but it is widely ignored.”

According to the columnist, while the poverty rate isn’t changing, the number of people in poverty has risen: “The increase from 1990 to 2006 was 2.9 million people (36.5 million minus 33.6 million). Hispanics accounted for all of the gain. Consider: From 1990 to 2006, the number of poor Hispanics increased 3.2 million, from 6 million to 9.2 million.” In other words, about 3 million extra poor people, and roughly the same number of poor Hispanics.

“Only an act of willful denial can separate immigration and poverty,” he wrote, adding that while “any sensible debate requires accurate information…among many analysts, journalists and politicians, it’s politically or psychologically discomforting to discuss these issues candidly.”

When Samuelson took part in a briefing on the new report by the Center on Budget and Policy Priorities, he was indeed the only one to ask the “discomforting” question about immigrants. That led to a response from Robert Greenstein of the CBPP (9/18/07), who wrote that the Census report actually told the opposite story: “Hispanic poverty fell, and the median income of Hispanic households rose. Non-Hispanic whites and African Americans, by contrast, experienced no such improvement.”

Greenstein pointed out that Samuelson’s use of raw numbers was misleading:

Samuelson complained that there were 3.2 million more poor Hispanics in 2006 than in 1990. He did not mention that the number of non-poor Hispanics—including doctors, teachers, small-business owners, waiters and members of the armed forces—grew by 20 million over the same period.

The Economist’s Free Exchange blog (9/5/05) was less charitable, writing that “it’s very difficult to read his column as anything other than dreadful incompetence with statistics, or worse.” For a columnist who once advised (2/23/05), “It’s always necessary to do the math,” Samuelson’s creative accounting would suggest that the math is of less importance than the politics.