Time for another installment in an irregular series. I thought this email said a lot about the media’s truly poor job in covering the privatization debate:
In regards to Bush’s privorization plan for Social Security, I caught the tail end of a speech that a U.S. Senator was giving in Congress. He stated that contrary to the popular perception, the portion of the Social Security that would be diverted into private accounts would be considered a loan from the Social Security Administration which would have to be paid back with a 6 percent interest.
Do you know anything about this?
Here we have a citizen who actually listens to speeches by senators, which probably puts him in the top 10% of the population in terms of being attuned to political goings-on (Certainly, I rarely listen to speeches by senators). And yet if he hadn’t been listening to speeches by senators, he still would not know about the clawback! How could this happen?
Curious, I searched a few papers for “bush & social & security & privatization” First up, the NYT’s most recent story on the Bush’s social security plan: Bush Committed to Private Accounts Plan — you guessed it, no mention of the clawback or anything like it.
Next up, the Washington Post, where I learn that, “washingtonpost.com is undergoing maintenance and some sections of the site are temporarily unavailable.” That’s okay. I have a pretty good guess of what I would find, and would not find, were the site working.
Over to the West Coast, where the top hit is noted liberal Michael Kinsley’s 5/1/05 paean to Bush, “Bush Gets B+ for Honesty, Even Courage, on Social Security.” I pretty much knew from the title that there was no description of the clawback, but I read it again anyway, just to make sure. No mention.
Now to the heartland. The Chicago Tribune’s latest is actually an interesting article, reprinted from The Nation and titled “How Bush Makes Sure They Agree,” on how the Bush team screens and selects those who get to attend his taxpayer-funded privatization advocacy trips. Yet still no description of the clawback!
Let’s try the WSJ. Their latest is an article (behind a paywall) pointing out that even Bob Pozen, author of the plan Bush recently cited as a model for privatization, does not support Bush’s privatization plan! But no clawback mention or explanation.
Finally, on to that font of knowledge, USA Today. The top hit there is “Bush: Rein in Social Security.” Yet again, no clawback.
In each instance, I was not simply looking for the word “clawback.” Instead, I was looking for either the word “clawback,” or some description of the fact that accounts would have to earn at least 3% + inflation, probably more for 70% of workers, before workers would be better off under Bush’s latest semi-plan (it’s not really a plan since Bush still has not laid out any real details). Searching to no avail.
In any case, here’s my very lightly edited response to my reader:
Yes, that’s always been the plan — search, e.g., Google for “social security” + “clawback”, with “clawback” being the fairly accurate term for the repayment of the loan. Under most plans I’ve seen, you are basically loaned money at about 3% and have to implicitly pay it back. Your account has to grow at a rate greater than (3% + inflation) before you would be close to better off under Bush’s apparent plan. I say “apparent” because he still has not really detailed a plan.
For more on the clawback issue, see this from the Center for American Progress.