Dec 1 1992

Voters Fail Pundits’ Test on Entitlements

Back last summer, when the editors of the Atlantic put Bill Clinton through an oral exam, they awarded him an over-all pass, but flunked him on one subject: entitlements. “Every ‘A’ student who has thought about the federal budget knows that if you don’t find some way to limit Social Security and Medicare, you will never, ever reduce the budget deficit,” they wrote.

On the same subject, a true “A” student would have to give the Atlantic an “F” (if not a “Z,” for publisher Mortimer Zuckerman, the real estate tycoon).

Unlike Atlantic editors and most mainstream journalists, “A” students would know that Social Security is by far the most profitable activity of the government, yielding a net of more than $1 billion a week. That is because the snake-oil peddlers who now attack Social Security put across legislation in 1978 and again in 1983 that reduced benefits and raised payroll taxes unconscionably–in effect, transferring the tax burden from those who can afford it to those who cannot. (See Extra!, 1-2/88 and 7-8/91)

In April, the Atlantic ran a savage attack on Social Security by Neil Howe and Phillip Longman, two professional propagandists for tax relief for the rich, who have for years raised the specter of “war between the generations.” Their article was presented as an expose of how the rich hog government benefits. To make entitlements look even bigger, they included farm supports, the mortgage interest deduction and other tax loopholes with Social Security and Medicare, while excluding the savings-and-loan bailout and the interest on the national debt from total federal spending. Interestingly, they ignored the huge profit that the Treasury makes on Social Security and the huge loss that it takes on I.R.A.’s and other private pension plans, which overwhelmingly benefit the rich.

Well down in their piece, Howe and Longman dismissed in three words the obvious thought that if the rich are getting too much, the simple answer would be to raise income taxes on the wealthy. “It won’t happen,” they explained. That is, the People wouldn’t stand for a tax increase on the rich, but they would stand and cheer for a cut in welfare for the rich (and anybody else). So all we need, Howe and Longman concluded, is means-testing. That, of course, would turn Social Security and Medicare into welfare programs, to suffer the fate that welfare has suffered these past 20 years.

Even liberal commentators have recently joined the media pack that swallowed this pseudo-populist bait. Newsday‘s Gail Collins (9/22/92) chided the Republican campaigners for not mentioning “the federal deficit or the soaring price tag for Social Security,” and Jim Dwyer, also of Newsday, berated local Democrats for opposing cuts in benefits for the rich, quoting the Atlantic as reporting that Social Security pays out $55 billion a year to families with incomes above $50,000.

It is an actuarial fact that people who work for low wages die earlier than people who are well paid, and draw smaller pensions–although Social Security benefits are weighted in favor of the low-paid. Such as they are, however, those benefits are the main sustenance of a majority of elderly Americans, and are all that keep some 35 percent of them (barely) above the poverty line. But Jim Dwyer, echoing the welfare-queen-in-the-Cadillac motif, came up with somebody whose rich grandmother-in-law “is screaming about the politicians threatening to cut off her Social Security.”

Actually, few politicians are making such threats. In this election year it has been the pundits who have been chanting the threats, time and again. When an interviewer asked Bill Clinton why he did not favor a hit on Social Security, he replied engagingly that a Senator had warned him that it was “a third rail”–touch it and the voters would electrocute you.

The media cannot forgive the voters for that. A contributor to the New York Times (8/15/92), whose op-ed page has been a platform for extreme and continual geezer-bashing, bemoaned the “gray muzzle silence extorted from political leaders by older citizens on the issue of Social Security reform,” and went on to denounce heartless “elderoids.” In fairness, it should be noted that the writer also took swipes at spending for public schools and public transit. There’s an idea for cutting the deficit: all those rich subway riders and their children in the public schools getting a free ride from the taxpayers.

John Hess is a former reporter for the New York Times and a contributor to the New York Observer.