More Moynihan Malarkey
By Jonathan Chait
Whenever George W. Bush mentions privatized Social Security, he tends to mention the support of Pat Moynihan. And it's no wonder, because Bush could not have found a more effective ally if he had to invent one. The esteemed Democratic senator brings a comforting (and conveniently elderly) face, a reverence for New Deal liberalism, and above all, a reputation for deep intellect. Moynihan's role in providing political cover to Bush has given occasion for pundits to once more extol his brilliance. Moynihan is "singularly informed about Social Security," says George Will. Paul Gigot calls him "an idiosyncratic liberal."
But Moynihan's reputation for brilliance allows him to commit acts of breathtaking intellectual shoddiness grand pronouncements devoid of logic or consistency. In the latter years of his career this has become the chief characteristic of the Moynihan style. He flits erratically from position to position, never deigning to explain his reasoning, presuming at all times that we will believe him simply because he is Daniel Patrick Moynihan and we are not. His exhortations on Social Security--most notably his recent, magisterial New York Times op-ed--offer the purest example of the pattern.
Moynihan's main contribution to Social Security was a bipartisan overhaul he helped engineer in 1983. The reform he championed was to change Social Security from a mostly pay-as-you-go system--one in which today's workers pay for today's retirees, and tomorrow's workers pay for tomorrow's retirees--into a partly prefunded system, in which the Social Security system builds up surpluses in its trust fund to help pay for future benefits. Eight years later Moynihan declared the entire notion of a trust fund to be a sham and urged a reversal of the 1983 reform. Nonetheless Moynihan continues to tout his 1983 bipartisan heroism, without mentioning that he is now attempting to undo it.
This is characteristic of Moynihan. He can reverse his views completely without diminishing the unshakable moral assurance with which he holds them. In 1993, the Clinton administration floated a modest trial balloon about freezing the Social Security cost of living adjustment for one year. Moynihan went ballistic. "Proposing to take away cost of living allowances from retired persons--I mean that's a real blow," he declared, "You wonder how many more people you want in poverty." In 1998, Moynihan introduced his own Social Security plan, which cut the cost of living allowance by one percentage point every year--a cut that would dwarf the one he so hysterically denounced five years before. This time he insisted that "very powerful interest groups ... have prevented the subject of the cost-of-living index from ever being raised." No need to mention that the chief such group was Moynihan himself.
Moynihan's flip-flip on the cost of living was made necessary by another flip-flop: his sudden support for privatization. In 1997, Moynihan disdained the idea, writing in the Times, "Once the great majority of citizens found that they would do better in the private investment part of this new system, support for the redistributive aspects of Social Security would quickly erode." The next year, when reversing himself, Moynihan declared privatization a fait accompli. Liberals, he argued, had to support it or Social Security, like welfare, would disappear altogether. More recently he has downplayed this pragmatic argument, instead casting privatization as a moral imperative--"the logical completion of the Social Security system."
Moynihan is even more disingenuous about the benefit cuts he would impose in order to finance his privatization plan. Of course, it will probably be necessary to cut benefits anyway in order to keep Social Security solvent. But, since privatization drains money away from the Social Security trust fund, it requires larger cuts in the basic benefit than would otherwise be necessary. Honest supporters of privatization argue that beneficiaries will more than make up the difference by investing in the stock market. Moynihan takes a more sophisticated approach, alternating between vagueness and outright dishonesty. In his Times op-ed, he lists three of what he calls "changes in the existing program." He describes them in such a way as to make them sound like anything but benefit cuts. One of them actually isn't a benefit cut. The other two are.
For instance, he proposes to "increase the number of years counted in computing benefits from 35 to 38." If you are one of the few hundred Americans who has slogged through detailed tomes on the subject, you know what this means: Right now Social Security benefits are based on the average of the 35 highest-earning years of a worker's life. If you add three more years to the total, you water-down the average, and hence reduce benefits. This is a perfectly fine way to cut Social Security benefits. In fact, if I was president, I would try to enact it immediately. But Moynihan doesn't even hint that this is a cut at all. The way he phrases it, it probably strikes the lay reader as an increase.
He also proposes to "use an accurate" annual cost-of-living adjustment, which some experts believe currently overestimates the actual burden of inflation to seniors. This is probably true, but a correction would reduce everyone's Social Security benefit check. That is exactly why Moynihan proposes it as part of privatization--for the money it would save. Yet he presents it as a purely technical issue that lesser minds needn't worry their little heads about.
As an aside, Moynihan even refers obliquely to "some tricky details, including a far-off increase in retirement age" (a notion he denounced as "silliness" back in 1993). Once again, starting Social Security benefits at a later age may be a good idea or a bad one, but it is undeniably a benefit cut.
But Moynihan doesn't rely on obfuscation to do the whole job. He actually writes, in the same article, that his plan does not require benefit cuts. "The present progressive retirement benefit is fixed in our bill. There is no occasion to touch it." Last month he said the same thing on Fox News: "You're not risking anything like your retirement benefits. They're fixed. They're guaranteed. This [private account] is just an extra thing."
Moynihan is so highly regarded that he can get away with flagrant contradictions like this. Fortunately there is one person, equally highly regarded, who can be counted on to criticize any given Moynihan position. Just wait a few years.
[end]
Carl
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