Social Security

A rather shocking thing happened on Sunday's "Meet the Press": host David Gregory asked Alan Greenspan and Henry Paulson if it would be a mistake to let the Bush tax cuts expire.

Chatting with the former Federal Reserve Chairman and former Treasury Secretary, Gregory referenced Tuesday's Wall Street Journal article about what the impact of allowing these tax cuts to expire would be on the budget and the economy.

Gregory first asked Paulson and then Greenspan, "Is that a bad idea?" (video embedded below the fold with transcript, relevant section at 6:48):

On Wednesday's Countdown show on MSNBC, shortly before the beginning of the State of the Union address, as Keith Olbermann discussed the speech with Chris Matthews and Rachel Maddow, after Olbermann brought up the possibility that President Obama would give a divisive FDR-style speech, Matthews seemed to lament that such a speech would "spook" the middle class, and, as he credited the Democratic party with actually "creating" the middle class, he argued that Democrats are a victim of their own success.  After claiming that it would have been "unpatriotic" not to increase government spending in time of recession, he went on to describe President Obama's economic policies as "conservative": "Everybody who studies economics knows if you have no business spending, no consumer spending, the government has to spend. That is reasonable and I would argue conservative economics."

At about 8:57 p.m., after contending that President Herbert Hoover "proved to every single American that the Great Depression was Republican doing," Matthews made his extraordinary claim about Democrats "creating" the middle class:

UPDATE AT END OF POST: 2006 video of Sen. Barack Obama applauding the death of Social Security reform.

Contrary to what the Left and their media minions told Americans in 2005 when President George W. Bush wanted to reform Social Security, the nation's largest entitlement program is now projected to run deficits for at least the next two years.

In an article on the subject published Sunday, the Associated Press mysteriously hid the seriousness of this revelation while never once mentioning the Republican push to solve this problem four years ago, or that Democrats in January 2006 -- including Sen. Barack Obama (D-Ill.) -- actually applauded the death of the previous year's reform efforts.

The obfuscation began with the headline:

Thanks to info "steveegg" at No Runny Eggs linked me to earlier today, I had to add the word "Annual" before "Cash Flow" at this post (at NewsBusters; at BizzyBlog) that originally appeared Wednesday.

That's because the system is already running monthly deficits, and significant ones.

Back in February, the system also ran a deficit. It was bad news, but because February is an unusual month containing a full month of payments but only 20 business days of collections (actually 19, since Presidents Day is a federal holiday), I didn't think it was an indicator of a near-term problem when I noted it in early April. I was wrong.

The degree of the decay is obvious when you look at July's and August's results. The drastic decline in year-over-year collections noted in Wednesday's post indicate that September is almost certainly going to be no better, and will probably be worse.

Go to this link and you'll be able to replicate the tables that follow (simply type "7" or "8" at Item 3):

Ed Morrissey at Hot Air had the catch of the day yesterday when he revealed, based on Congressional Budget Office internal projections distributed to Congress during the summer, that the Social Security system will spend more cash than it takes in during the government's next fiscal year ending September 30, 2010. Read about it there, or here, because you won't see the establishment media acknowledge the existence of these revelations.

Morrissey isn't clear as to when the report was prepared, but if it dates back to July or even early- mid-August, it's possible that Social Security will show a measly positive cash flow of less than $10 billion when the dust settles on the current fiscal year that will end next week, compared to +$72 billion a year ago. That's because the decay in Treasury's cash collections during the current quarter has been that bad.

Here's the relevant portion of the spreadsheet Morrissey obtained:

ABC's Brian Ross on Wednesday investigated a subject that has been skipped by CBS and NBC's morning shows, the more than $1 million spent by the Social Security Administration for its employees to attend lavish retreats, complete with a motivational dance company performing for the government bureaucrats. Host Chris Cuomo asserted that Social Security may be "on the brink of financial ruin. But, you would never know it from a recent luxurious retreat paid for by your tax dollars."

Good Morning America's Ross, who has spend much of 2009 delving into whether or not Wall Street executives should fly on private jets or go on lavish retreats, provided some consistency by looking into a story that has, so far, been ignored by CBS's Early Show and NBC's Today. He explained that Social Security is "expected to be insolvent in less than 30 years, unless taxes are raised substantially. But, there was no sense of financial crisis when almost 700 Social Security executives gathered here last week at the Arizona Biltmore in Phoenix."

In a report meant to cover Uncle Sam's release of June's Monthly Treasury Statement, Associated Press reporter Martin Crutsinger went well beyond the wire service's normally lazy, slanted reporting in this area.

In his report's apparent final incarnation early Tuesday morning, the AP writer:

• Told us the amount of June's deficit ($94.3 billion), but didn't disclose the figures for June's receipts ($215.4 billion) or "outlays" ($309.7 billion), or how they compared to June of last year. In doing so, he "succeeded" in concealing the accelerating decline in tax collections.
• Didn't tell us that the past month's deficit is by far the worst June ever.
• "Forgot," as he did in May, to tell readers that the deficit would be hundreds of billions of dollars higher if it weren't for an "accounting change" retroactively put into place by Treasury in April that changed the definition of "outlays."
• Cited the Iraq and Afghanistan wars as contributors to the deficit situation, while not identifying several other expenditure categories that have been worse offenders by far.
• Found an economist, without dissent, to support the claim that what the Obama administration has done had to be done.

And that doesn't even count Crutsinger's Krugmanesque rewrites of the history of the 1930s Depression era and 1990s Japan, or the apparatchik-like tone present in a few of his paragraphs.

Yesterday, in the process of passing on news that bloggers such as Ed Morrissey at Hot Air and outfits like the Heritage Foundation were onto earlier, Bloomberg's Kevin Hassett delivered a stinging indictment of the establishment media for being asleep at the switch (the sole exception appears to be a video report at PBS). But while he does a good job identifying the problem and indicting journalists for ignoring the news, his prescription for a solution is badly wanting.

The news? The days of Social Security surpluses are over, six to possibly eight years earlier than was thought to be the case just a year ago.

Here are excerpts from Hassett's commentary ("Recession Bites Into Social Security’s Surplus"). His first word reveals what he thinks of the nation's political elites, and of the media that are supposed to be watching them:

Although an admitted Barack Obama supporter during last year's campaign, CNBC's Jim Cramer has certainly changed his view concerning our 44th president.

On Tuesday's "Today" show, the outspoken "Mad Money" host said: we have "an agenda in this country now that I would regard as being a radical agenda";  Obama's just announced budget "put a level of fear in this country that I have not seen ever in my life," and; "This is the most, greatest wealth destruction I've seen by a president."

He also called Timothy Geithner "an invisible treasury secretary," and expressed hope that the next time he goes to Capitol Hill "he doesn't throw the drowning man the anvil like he did the last time he spoke" (video and transcript below the fold, file photo):

The self-aggrandizing denizens of Hollywood constantly scold Americans over a lack of national healthcare. It is the biggest failure of American society ever that there is no cradle to the grave program for free health care, they constantly tell us. And now, in keeping with these nearly universal Hollywood "principles," to prove how Hollywood is far more moral than we lowly citizens of flyover country, and to show that they are better than the great unwashed in the backwaters of America... Hollywood is closing its nearly 90-year-old Motion Picture Fund hospital and accompanying long-term living facilities for aging actors.

Yep, dumping it. Walking away from the facilities for free healthcare for actors. Fuggedaboutit.

The Associated Press's record of running interference for Treasury Secretary nominee Timothy Geithner continues mostly unabated.

My chronicle of AP's largely weak coverage, most of which has been previously detailed at NewsBusters (here, here, and here), is at the end of this post.

No AP report I have seen has noted that Geithner applied for and merely pocketed partial "reimbursements" from the International Monetary Fund for payroll/"self-employment" taxes. He signed IMF forms saying that he had paid or would pay those taxes. He didn't pay up for 2003 and 2004 until his returns were audited. He more than likely never would have paid up for 2001 and 2002 if he had not been nominated, even though a strong case could be made that he engaged in tax evasion.

These aspects of Geithner's tax situation, if widely known, would, I believe, cause the average taxpayer to object strongly to the very idea of his nomination. AP's alleged journalists appear to believe that this cannot be allowed to happen.

AP Personal Finance writer Dave Carpenter, in a mostly Q&A piece with a really weak title ("Meltdown 101: US tax laws can even foil the pros"), continued the silence on pocketed reimbursements yesterday afternoon (stored here for future reference). He also seems to have found every excuse for Geither except "the dog ate my W-2":

 This is a timely op-ed from Dan Gainor of BMI.

Christmastime is the time of giving. So we can thank Bernie Madoff for giving Americans some special gifts this holiday season.

Yes, I said thank him. OK, maybe not a lot. But the one-time financial wizard's downfall is a morality tale that provides so many lessons it's almost impossible to know where to start.

If you've been living under a rock, the former chairman of the Nasdaq has been charged with securities fraud. Not just ordinary securities fraud, either. Reportedly, Madoff's sons turned in their father, and who could blame them. He had allegedly confessed to them "that his investment business was a giant Ponzi scheme' that cost clients $50 billion, a lawyer for the brothers" told Bloomberg.

In the interview for Wednesday’s Barbara Walters Special on ABC with Barack and Michelle Obama, excerpts of which were also shown on Wednesday’s World News with Charles Gibson, Walters asked few questions that put the Obamas on the defensive, in contrast with her January 2001 interview, aired on 20/20, with then-President-elect Bush in which she challenged him on a number of fronts. Most notably, she seemed to chide Bush for choosing John Ashcroft as Attorney General because he "openly opposes abortion," and claimed that Ashcroft was "not considered a friend to civil rights." She asked Bush about reports that, as governor of Texas, he "spent relatively little time studying specific issues," and "only does a few hours of work" a day. The ABC host also challenged Bush from the left on the trade embargo against Cuba, and even asked Laura Bush if her more "traditional" plans for her time as First Lady would be a "setback for women." It is also noteworthy that Walters asked Bush about his plans for dealing with Saddam Hussein and cited "people in the know" who contended that the Iraqi dictator was "stronger than ever."

If the Republicans had a few more spokesmen like Haley Barbour, the political landscape might look a lot different.  The Mississippi governor's down-home good humor and razor-sharp wit are a formidable combination. Barbour's killer combo of skills was on display on this evening's Hardball.  When Chris Matthews challenged his criticism of Obama's tax credit plan, Barbour good-naturedly backed him down with an impressive disquisition on New Deal history.  When he was through, Matthews had to admit that Haley was right.

I'd encourage people to view the video, not only for the entertainment value, but as a case study of how to defeat a member of the liberal media.

Sometimes government tries to fix the problem; then it makes the problem worse.

In 2004, economists at the University of California, Los Angeles (UCLA), studied the policies of President Franklin Roosevelt's New Deal and determined it actually prolonged the Depression by seven years.

Harold L. Cole and Lee E. Ohanian blamed anti-free market measures for the slow recovery in an article published in the August 2004 issue of the Journal of Political Economy.

Cole and Ohanian asserted that Roosevelt thought excessive business competition led to low prices and wages, adding to the severity of the Depression.

"[Roosevelt] came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies," Cole said in a press release dated Aug. 10, 2004.

NewsBusters is, of course, a site dedicated to exposing liberal bias in the press. But, once in a while the liberal press gets something right and this is one of those cases. On Spetember 20, Newsweek hosted an article by FactCheck.org that exposed the outright lies contained in the claims Barack Obama made against John McCain's record on Social Security in order to scare as many elder citizens as he can. Obama may have expected every Old Media outlet out there to cover for him, but Newsweek didn't oblige this time. So, I thought I'd highlight this piece and give Newsweek the thumbs up for hosting the FactCheck.org article.

Over the weekend, Barack Obama appeared in the battleground state of Florida and made to scare citizens over McCain's votes on Social Security. Obama claimed that McCain voted for a plan that would have seen the Social Security benefits of "elderly women" at risk in the stock market during the recent wildly fluctuating market. Telling his audience, "if my opponent had his way, the millions of Floridians who rely on it would've had their Social Security tied up in the stock market this week," Obama tried to claim that the elderly would have lost their money because of John McCain. FactCheck.org called these claims "not true."

Shocking media honesty alert!!!

Here's something you don't see every day: a major American press outlet speaking ill of a campaign proposal from presumptive Democrat presidential nominee Barack Obama.

Yet, there it was moments ago in an Associated Press piece amazingly titled "Obama's 'No income Taxes On Seniors' Draws Critics."

Maybe even more surprising than the AP actually reporting critical assessments of the junior senator's plan to exempt from federal income taxes seniors who make less than $50,000 a year was the authors not citing anyone that supports Obama's proposal...not one single person.

Now, I know what you're thinking: this was either a Wall Street Journal or Investor's Business Daily article. Think again (emphasis added, photo courtesy AP):

If you believe that there's a 50-50 chance that your take-home pay will be cut by almost one-fifth beginning in as little as five months from now, would that belief affect your current spending habits?

Of course it would. But that idea apparently never occurred to the Associated Press's Mark Jewell.

In the course of a 950-word article Monday about how the rich are getting more stingy, he focused on how "the economic slump" and "downturn" are affecting their spending, while ignoring the massive tax hits high-income earners will likely be forced to absorb (illustrated in detail below the fold) if Barack Obama wins the presidency and Democrats retain control of Congress.

Here is some of what the AP's Jewell wrote (bolds are mine):

If, as shown yesterday (at NewsBusters; at BizzyBlog), media reporters can't even get basic things like the fact that $1.74 x 3.5 doesn't equal anything close to $4 right, you would think that it's way too much to expect them to understand the difference between income and net worth.

You would be correct.

The coverage of last week's Social Security tax-increase proposal by Democrat Barack Obama included this representation by the candidate:

To extend the life of Social Security, Obama proposed applying a payroll tax to annual incomes above $250,000, affecting the wealthiest 3 percent of Americans. The Democrat also proposed eliminating income tax for any retiree making less than $50,000.

Press coverage of Barack Obama's Social Security proposal in Columbus, Ohio last week made many of the usual mistakes any time there's a story about the government's "third rail" program. But in this case it missed what would be a historic de-linkage of payments made into the system from benefits paid out.

First, here are the key paragraphs from the Cincinnati Enquirer's coverage of Obama's speech (bolds are mine):

Sen. Barack Obama promised senior citizens Friday that as president, he would protect Social Security benefits and provide universal health care.

To extend the life of Social Security, Obama proposed applying a payroll tax to annual incomes above $250,000, affecting the wealthiest 3 percent of Americans. The Democrat also proposed eliminating income tax for any retiree making less than $50,000.

..... Obama said it is unfair for middle-class earners to pay the Social Security tax "on every dime they make," while millionaires and billionaires pay it on only "a very small percentage of their income."

One man's pork spending is another's "relative bargain" according to the "Follow the Money" segment on the April 15 "CBS Evening News."

The newscast commemorated Tax Day by featuring what federal tax dollars are spent on, but what they chose to highlight was peculiar.

"The biggest tab for taxpayers is defense," CBS correspondent Bob Orr reported. "The average American household is paying $2,761 in 2007 - or put another way, enough to cover 12 car payments for a new Honda Accord. Social security is nearly as expensive, $2,663 - enough to heat and cool a home for a year. In total, the average tax bill this year tops $13,000 and most taxpayers have no idea what the government is doing with their cash."

The Associated Press's out-of-whack news priorities and seemingly boundless determination to distort never cease to amaze. Hope Yen's Sunday report on VA credit-card charges is yet more evidence that the wire service has lost its way.

The beginning of Yen's report is so typical, and so misleading:

Investigators Review VA Credit Charges

WASHINGTON (AP) — Veterans Affairs employees last year racked up hundreds of thousands of dollars in government credit-card bills at casino and luxury hotels, movie theaters and high-end retailers such as Sharper Image and Franklin Covey — and government auditors are investigating, citing past spending abuses.

All told, VA staff charged $2.6 billion to their government credit cards.

Yen must "hope" that disgusted readers will stop there, because, thanks to "clever" writing, many readers will believe that $2.6 billion in spending is under investigation, and that the "hundreds of thousands" represents the small tip of a very big iceberg.

Uh, not exactly.

The Treasury Department released its Monthly Treasury Statement for December this afternoon.

Though Uncle Sam did run a surplus last month, the year-to-date figures are alarming:

It should be pretty clear that the big news in the above figures is that federal spending during the first quarter of the fiscal year was almost 9% higher than during the first quarter a year ago. If the spending increase had been held to only 5%, this fiscal year's quarterly deficit would have come in virtually the same as last year's.

Yet it took these publications the following number of paragraphs to get to the year-to-date spending news:

Instead of focusing on Hillary Clinton’s third-place finish in Iowa, her struggling poll numbers, or the typical horse-race questions, CNN’s John Roberts asked the former first lady about a number of issues, including the Iraq war, Social Security, and the principles that she would "stand on in good times and bad times." In his last question, Roberts asked Clinton, "What will be the underpinning of your decisions?" Her answer: "The United States Constitution first and foremost."

The first segment of the Roberts/Clinton interview aired 22 minutes into the 6 am hour of Tuesday’s "American Morning." Roberts first asked Clinton about her choice to go back to the "aggressive style of compare and contrast" that she last used before the Iowa Caucuses. She highlighted the apparent need that the Democratic candidates be compared and contrasted.

Video (0:57): Windows Media (1.76 MB) and MP3 audio (257 kB)

There are quite a few people already running for president, but one author recently suggested others might jump in: like CNN's own Lou Dobbs.

Michael Barone, a senior writer for U.S. News & World Report and the principal co-author of "The Almanac of American Politics," told an audience in Alexandria, Va. on December 13 that a Lou Dobbs presidential candidacy is a possibility.

(Click here for audio)

For years one of the great unanswered questions along Main and Wall streets has been why, in the midst of 24 consecutive quarters of uninterrupted growth, polls have regularly found Americans sour about the economy.

On Tuesday, a battle between the New York Times liberal economics columnist Paul Krugman and WOR radio's Steve Malzberg offered a clue.

In fact, after 16 minutes of sparring on subjects from healthcare to the Iraq war, a truly inconvenient truth became evident concerning the left's continued bearishness since the economy emerged from recession in the fourth quarter of 2001: too many folks listen to people like Krugman.

As a perfect illustration of just how separated this man, and anybody who reads him, are from reality, when Malzberg asked Krugman where he'd seek medical treatment if he was really ill, the Times columnist said (16 minute long audio link available here):

Which prominent pundit has called Barack Obama a "sucker" and a "fool"?

A. Rush Limbaugh
B. Ann Coulter
C. Michelle Malkin
D. Mark Levin
E. Laura Ingraham

Jeopardy theme-music playing . . .

Chris Matthews can't get enough of John Edwards' brutal-but-funny anti-Hillary ad, playing it twice during this evening's "Hardball." Set to the Blue Danube Waltz and based on clips from last week's debate, the theme is Hillary's double-talk on Iraq, Social Security and immigration [her triple-toe loop on driver's licenses for illegal immigrants].

But in the three-cushion game that is presidential billiards, two of Chris's guests surmised that the ad, in taking down Hillary, would likely redound to Barack Obama's benefit.

View video here [includes the Edwards' ad].

The lefties won’t be pleased. The October 15 CBS “Evening News” and ABC “World News Tonight with Charles Gibson” had a different take on Social Security contrary to liberal Democratic presidential hopeful Hillary Clinton’s position.

On October 11, Clinton told CNBC’s John Harwood she wasn’t going to jump the gun and scare people by addressing their Social Security concerns. “I think what I owe the American people is to tell them I will not spook them and sound the alarm over Social Security because that’s not merited,” Clinton said. “We have time to deal with this problem. I will deal with it in a responsible fashion.”

But, ABC correspondent David Wright reported data that would make you think otherwise.

Hillary could have saved CNBC “Street Signs” viewers about 10 minutes of their lives by just saying “Trust me,” when CNBC Washington correspondent John Harwood pressed her on economic issues.

Clinton appeared on the October 11 show with Harwood and “Street Signs” anchor Erin Burnett.

Harwood asked Clinton to respond to a comment made by GOP presidential nominee frontrunner Rudy Giuliani: “Hillary Clinton … wants to put a lid on us. She wants to put a lid on our growth. We want to give people freedom.”