Chris Matthews Blatantly Misrepresents Bush's Social Security Reform Plan
Chris Matthews on Friday blatantly misrepresented former President George W. Bush's plan to reform Social Security in 2005.
"If George W. Bush had gotten his way and privatized Social Security and tied it to the stock market, your constituents would be 100 percent Democrats now -- 100 percent! -- because they`d be looking at their Social Security checks shrivel to nothing because they`d be based on the Dow Jones," the "Hardball" host falsely told Rep. Debbie Wasserman Schultz (D-Fla.).
As quotes directly from the actual reform plan Bush submitted in February 2005 will demonstrate, Matthews is either completely ignorant of the facts or intentionally lied to his audience.
You decide whether the following is just a foolish mistake or a willful misrepresentation of the truth by a so-called journalist on national television (video follows with transcript, commentary, and quotes from Bush's 2005 reform plan):
CHRIS MATTHEWS: You know what`s weird, Congresswoman? If George W. Bush had gotten his way and privatized Social Security and tied it to the stock market, your constituents would be 100 percent Democrats now -- 100 percent! -- because they`d be looking at their 401(k) shrivel to nothing. I`m sorry -- they`d be looking at their Social Security checks shrivel to nothing because they`d be based on --
REP. DEBBIE WASSERMAN SCHULTZ (D-FLORIDA): That`s right.
MATTHEWS: -- the Dow Jones. I watch that Dow every day because I got some money in the market. Imagine if that`s the only money you have and it ties to your Social Security. If Bush had won, the Democrats would have, ironically, be better off politically now because the voter right now, the older voter and the voter about to be old would say, Wait a minute, I can`t trust the Republicans with my money.
Now, let's look at the facts. First, from page 2 of Bush's "Strengthening Social Security for the 21st Century":
Social Security will not be changed for those 55 or older (born before 1950). Today, more than 45 million Americans receive Social Security benefits and millions more are nearing retirement. For these Americans, Social Security benefits are secure and will not change in any way.
That's right! Bush's plan would not have impacted anyone currently receiving benefits OR anyone born before the year 1950.
As such, the stock market's recent plummet would not have impacted current Social Security recipients one bit!
None! Nada! Nip! Zero! Zilch!
The idea that a nationally televised host misrepresented this to his viewers whether willfully or ignorantly should not be acceptable, especially as he's doing it while actually campaigning for 100 percent of seniors to vote for Democrats!
But let's take this a bit further, for even Americans born after 1950 wouldn't have been negatively impacted by the 2008-2009 stock market crash if Bush's plan had been enacted:
Under the President's plan, personal retirement accounts would start gradually. Yearly contribution limits would be raised over time, eventually permitting all workers to set aside 4 percentage points of their payroll taxes in their accounts. Annual contributions to personal retirement accounts initially would be capped, at $1,000 per year in 2009. The cap would rise gradually over time, growing $100 per year, plus growth in average wages.
What this means is that whatever folks born after 1950 have contributed to Social Security wouldn't change under Bush's plan. It would still have been in the original Social Security trust.
However, beginning 2009, such folks could initially contribute up to $1,000 per year into private accounts. This would rise over time to a maximum of four percent of their yearly Social Security contributions to be so invested.
What that means is that 96 percent of their contributions would still be invested in the traditional Social Security trust and have absolutely no risk to fluctuations in stock and bond prices.
None! Nada! Zip! Zero! Zilch!
As such, not only wouldn't have existing recipients and those soon to be receiving Social Security benefits have been negatively impacted by the stock market's recent crash, younger Americans also would not have been harmed by it.
In fact, younger Americans would have benefitted from the plummet because they would have been investing - if they so desired - in stocks at much lower prices. Any investments made by them in 2009 would likely be higher today.
One last thought:
Personal retirement account options and management would be similar to that of the Federal employee retirement program, known as the Thrift Savings Plan (TSP). [...]
Personal retirement accounts would be invested in a mix of conservative bonds and stock funds. Guidelines and restrictions would be put in place to provide sound investment choices and prevent individuals from spending the money in these accounts on the lottery or at the race track. Workers would be permitted to allocate their personal retirement account contributions among a small number of very broadly diversified index funds patterned after the current TSP funds.
• Like TSP, personal retirement accounts could be invested in a safe government securities fund; an investment-grade corporate bond index fund; a small-cap stock index fund; a large-cap stock index fund; and an international stock index fund.
• In addition to these TSP-type funds, workers could choose a government bond fund with a guaranteed rate of return above inflation.
• Workers could also choose a "life cycle portfolio" that would automatically adjust the level of risk of the investments as the worker aged. The life cycle fund would automatically and gradually shift the allocation of investment funds as the individual neared retirement age so that it was weighted more heavily toward secure bonds.
Personal retirement accounts would be protected from sudden market swings on the eve of retirement. To protect near-retirees from sudden market swings on the eve of
retirement, personal retirement accounts would be automatically invested in the "life cycle portfolio" when a worker reaches age 47, unless the worker and his or her spouse specifically opted out by signing a waiver form stating they are aware of the risks involved.
The waiver form would explain in clear, easily understandable terms the benefits of the life
cycle portfolio and the risks of opting out. By shifting investment allocations from high
growth funds to secure bonds as the individual nears retirement, the life cycle portfolio
would provide greater protections from sudden market swings.
As such, younger Americans would be able to invest some of their Social Security in virtually the same retirement program Wasserman Schultz, all members of Congress, and all federal employees get to invest in.
If this program is good enough for such people whose salaries are paid by the taxpayer, shouldn't the taxpayer have access to something similar?
Sadly, Matthews and his guests ignored this as they bashed Republican ideas to reform a program currently paying out more in benefits than it's taking in.
Of course, dishonesty from these folks is not at all surprising, for here's what Wasserman Schultz said earlier in this segment without any contest from the host:
MATTHEWS: How does it look right now for your party, Congresswoman?
SCHULTZ: Well, obviously, we`re facing a challenging environment both because of the economy, but also, traditionally, a mid-term election like this one, the party in power loses seats. But race by race -- I mean, the generic ballot is one thing, but when you go head to head with their extreme right-wing nominees versus our moderate -- you know, moderate to conservative incumbents --
SCHULTZ: -- our members are really doing very well both in terms of their average cash on hand being astronomically larger than their opponents` --
SCHULTZ: -- and also, you know --
MATTHEWS: OK --
SCHULTZ: -- really in the midst of what their -- their constituents want them to be doing.
Imagine that. "[O]ur moderate -- you know, moderate to conservative incumbents."
This woman is actually willing to go on national television and call House Democrats "moderate to conservative."
And the host didn't challenge her.
The idea that this kind of propaganda is broadcast on a nationally televised cable news network should be offensive to all Americans.
More importantly, that Matthews is either too stupid to know the facts of Bush's Social Security reform plan or is willing to intentionally misrepresent the truth on a nationally televised cable new network should not be acceptable by his employers at General Electric and NBC.
If the folks at GE and NBC actually want their news divisions to be at all taken seriously, Matthews should be required to make a retraction and correction on Monday.