Fox News falsely claimed California workers would be forced to participate in a proposed retirement savings program, ignoring the fact that workers would be able to opt out of the program at any time and that it is only open to workers who are not offered a retirement plan from their employers.
On the July 26 edition of Fox & Friends First, co-host Patti Ann Browne hyped criticisms that California is becoming a "nanny state," because of a proposal that she claimed would "force private sector workers to lose 3 percent from each paycheck," which would be deposited in a state fund and become available to workers at retirement, plus interest earnings.
But in reality no one will be forced to contribute to California's proposed Secure Choice Retirement Savings Plan. The program would only be for workers whose employers don't already sponsor a pension plan or a 401(k) for their retirement, allowing them to pay into an account that would pay benefits based on account contributions and investment returns. Any workers who don't want to participate can opt out.
Ben Harris, a former senior economist with the President's Council of Economic Advisers, wrote at the Tax Policy Center's TaxVox blog that the program is "entirely voluntary," and the use of automatic enrollment which workers can opt out of has the potential to "bring more than 6 million workers into the retirement saving universe":
California's plan shows exceptional promise. By utilizing automatic enrollment, which has been proven to bolster enrollment in private 401(k) plans, the plan could bring more than 6 million workers into the retirement saving universe. It takes advantage of a pooled investment strategy to lower administrative costs and ensure a balanced investment portfolio. The benefits would be progressively distributed. Workers take the accounts with them if they switch jobs. The plan is entirely self-funded with no extra cost to taxpayers. And it's entirely voluntary; workers who do not want to contribute may opt out.
Furthermore, the plan is reportedly likely to cost the California state government nothing, as it is designed to be privately run and managed. As the National Journal reported, most workers who will be eligible for the program make less than $46,420 a year, and rely heavily on Social Security in retirement. The program would offer this "underserved population" added security in retirement.
Economists and financial experts have praised the plan, such as Shlomo Benartzi, a behavioral finance expert and professor at UCLA, and Richard Thaler, a behavioral economist at the University of Chicago, who told NPR that automatic enrollment in the plan was "key" to its success.
Print media coverage of Social Security finances overwhelmingly favors reporting figures in raw numbers that lack relevant context, a trend that reflects cable and broadcast news coverage's push for reducing the cost of the program over strengthening benefits for recipients.
A Media Matters analysis finds that three major print sources -The Wall Street Journal, The New York Times, and The Washington Post - are more likely to report figures on Social Security revenue, spending, and funding gaps in terms of raw numbers that lack relevant context, such as previous years' figures. Fifty-nine percent of total mentions of Social Security's finances throughout the first half of 2013 relied strictly on raw numbers:
According to economist and co-director of the Center for Economic and Policy Research Dean Baker, the overreliance on reporting economic figures in raw numbers only serves to confuse and mislead readers:
It is understandable that people who want to promote confusion about the budget -- for example convincing people that all their tax dollars went to food stamps -- would support the current method of budget reporting. It is impossible to understand why people who want a well-informed public would not push for changing this archaic and absurd practice.
Throughout the first half of 2013, coverage on the finances of Social Security in the three major print outlets relied on reporting figures in raw numbers devoid of relevant context, such as previous years' figures, that could provide a more accurate picture of the program.
Media coverage of economic news has declined sharply over the past three months.
Media Matters research reveals a roughly 80 percent cumulative decline in segments dedicated to economic issues from April 1 through June 30. The week of the Boston Marathon bombings yielded zero news segments dedicated to economic coverage. Media diverted from its traditional lineup to cover the attack and ensuing manhunt. Even after accounting for this outlier in the data, economic coverage across the three major cable and broadcast networks displayed a strong negative trend.
According to a Gallup survey released June 28, Americans are most concerned about the economy when thinking about this nation's future. Economic issues remain at the forefront of American public interest polling, while media focus elsewhere.
American's concerns about the economy are not unfounded. Through the first quarter of 2013, the United States economy is on pace to produce $843 billion less than its ideal economic potential. This "output gap" is estimated to have cost the economy more than $4.6 trillion since the onset of the recession.
One major story consistently overlooked in the media is the pervasive negative effect of a weak economic recovery. Television pundits are often quick to pronounce that individual monthly job growth is insufficient but rarely discuss why those numbers are insufficient or what policy changes might be enacted to spur growth.
The primary factor holding back economic growth has been so-called "fiscal drag," or the economic policies out of Washington that emphasize austerity and deficit reduction ahead of stimulus and growth. Economists agree that fiscal austerity harms growth and has slowed economic recovery, but television news has largely ignored these expert opinions.
Despite the emergence of internet-based alternatives, television remains the primary news source for most Americans. According to a recent Gallup survey, 55 percent of Americans rely on television for current events. With finite time and resources to report developments, and with an industry-wide focus on alleged Washington "scandals," huge portions of the American public are not exposed to valuable economic coverage.
Broadcast and cable evening news coverage touched upon a variety of economic topics, including deficit reduction, economic growth, and entitlement reform throughout the second quarter of 2013. A Media Matters analysis shows that many segments lacked proper context or input from economists, while some topics went largely underreported.
Cable and television news outlets have overwhelmingly presented Social Security as a program that should be cut, giving little to no airtime for proposals that would instead strengthen the program for beneficiaries.
Media Matters research revealed significant media selection bias in the Social Security debate. Through the first six months of 2013, the three largest broadcast and cable news networks dedicated nearly 300 segments to discussions of Social Security. More than two-thirds of those segments framed the entire Social Security debate as a problem of long-term solvency and the national debt, which can only be solved through drastic cuts to beneficiaries.
Media's heavy focus on "fixing" the solvency of the program belies the fact that Social Security is funded for at least the next two decades.
On May 31, the Social Security Board of Trustees submitted its annual report to members of Congress and the White House, which concluded that Social Security "does not face an immediate crisis," as noted by the Center on Budget and Policy Priorities' summary of the report. The report recommends that lawmakers prudently address long-term solvency concerns, but need not immediately adopt deep benefit cuts.
The Economic Policy Institute argued, contrary to most news coverage, that the challenges facing Social Security are "modest and manageable." Nobel Prize-winning economist Paul Krugman had a similar reaction to the latest Social Security report, noting "the system will be able to pay most of its scheduled benefits as far as the eye can see." Krugman also recognized the irrationality of arguments made by those who claim to want to save Social Security from eventual collapse:
The risk is that we might, at some point in the future, have to cut benefits; to avoid this risk of future benefit cuts, we are supposed to act pre-emptively by...cutting future benefits. What problem, exactly, are we solving here?
While media coverage of Social Security paints the debate of the program as one-sided, members of Congress have put forth plans that would expand the program through need-based benefit increases and tax reform.
The most prominent Social Security expansion proposal involves raising the payroll tax cap from its current $113,700 annual limit. The payroll tax is the primary source of revenue for Social Security. A report from the Center for Economic and Policy Research revealed that placing a cap on taxable income causes low wage workers to pay higher effective rates than high wage workers. Eliminating the payroll tax cap would more evenly distribute payroll taxes to all workers while extending the life of the Social Security trust fund indefinitely.
In January 2013, the National Academy of Social Insurance conducted a comprehensive survey of American attitudes toward various Social Security reform proposals. The data revealed overwhelming support for lifting or raising the payroll tax cap, while respondents reported significant opposition to benefit cuts, including raising the retirement age and decreasing cost of living adjustments through chained CPI.
The Center for American Progress has also argued in favor of expanding Social Security through tax reform and increasing outlays to those beneficiaries who most rely on the program.
News segments devoted to the alleged demise of Social Security and other benefit programs consistently overlook these alternative proposals aimed at strengthening -- rather than cutting -- the program for beneficiaries.
Throughout the first half of 2013, broadcast and cable nightly news overwhelmingly discussed Social Security in an unbalanced and negative light by repeatedly insisting that the program is insolvent, must be cut, or poses a risk to long-term fiscal security.
Right-wing media misleadingly hyped a congressional hearing to falsely claim that disability fraud is leading to increased claims and depleting the Social Security Disability Trust Fund. However, testimony from a Social Security Administration official at the hearing revealed that fraud is not a major problem in the disability program and demographic changes explain increased disability claims.
From the June 26 edition of Fox Business' Varney & Company:
The Las Vegas Review-Journal hyped the need for entitlement reform, calling for an increase in eligibility ages for Social Security and Medicare, means-testing or tying benefits to a beneficiary's income, and competition for Medicare. However, the Review-Journal neglected to mention that health care cost growth has been slowing down and that enacting these policy prescriptions would hurt seniors and low-income Americans.
A Wall Street Journal article debunked the myth that federal disability benefits are to blame for the shrinking labor force, "exaggerated" claims that have previously been pushed by the paper itself.
An April 29 Journal article headlined "Real Culprit Behind Smaller Workforce: Age" explained that the recent decrease in the labor force -- the number of employed and unemployed Americans who are currently seeking work -- "has more to do with retiring baby boomers than frustrated job seekers abandoning their searches." The article noted that claims that Americans are voluntarily leaving the workforce to receive Disability Insurance instead of working, for example, "may be exaggerated," and explained that retirees and students made up a far more significant portion of those leaving the labor force. The article included the following graph, showing disability was the least common reason for individuals leaving the workforce in March 2013:
However, the Journal has previously pushed the myth that Disability Insurance accounted for much of the dropping labor force participation rate. An April 10 article headlined "Workers Stuck in Disability Stunt Economic Recovery" claimed that workers receiving disability benefits were costing the economy billions by not instead participating in the labor force, and quoted economist Michael Feroli's claim that "worker flight to the Social Security Disability Insurance program accounts for as much as a quarter of the puzzling drop in participation rates, a labor exodus with far-reaching economic consequences." These claims are in direct contradiction to the Journal's most recent reporting.
According to Center for Economic and Policy Research co-director Dean Baker, research shows if more individuals who receive disability benefits worked, it would have a relatively minor effect on employment figures. Harold Pollack, an expert on disability policy at the University of Chicago's School of Social Service Administration, dismissed the idea that disability benefits might be "luring away people who could work." Despite these facts, media continue to attack federal disability benefits by pushing the false claim that disability programs harm the economy.
Media outlets including NPR and Fox News are targeting federal disability benefits programs through a campaign deceptively portraying these programs as wasteful and unsustainable. In reality, these programs have low fraud rates and help the rising number of Americans with severe disabilities survive when they are unable to work.
Fox News inflated the threat of fraud in the Utah disability benefits program, stoking fears that fraud is rampant even though it amounts to less than 1 percent of the entire benefits program in the state.
On April 10, the Social Security Administration announced that Utah's attorney general and the Social Security inspector general's office identified 368 cases of alleged fraud in the state, and 157 of the people accused of fraud were denied their Social Security Disability Insurance (SSDI) benefit claims as a result.
Fox & Friends trumpeted this finding on April 11, with co-host Gretchen Carlson saying that "you've got to wonder if every state did this and had somebody look into the alleged fraud that's going on in our social security disability system, that there would be a lot of money to come up that might be helpful when we're discussing the budget." Fox displayed the following graphic during the segment:
On April 11, Fox Nation similarly stoked the fear of SSDI fraud based on the findings of the Utah attorney general and the Social Security inspector general's office:
In fact the Utah attorney general's finding proved that fraud is not a major problem with SSDI in Utah. According to the latest available data, there are 48,777 SSDI recipients in Utah. 157 cases of fraud only amounts to only .3 percent of all recipients.
Indeed the Utah attorney general's finding that there are only a few cases of SSDI fraud in Utah confirmed that fraud in SSDI is a very small problem. A March 2012 Government Accountability Office report found that the improper payments from the Social Security Administration program that includes disability insurance totaled 0.6 percent in fiscal year 2011.
The Washington Post quoted the research director of the anti-immigrant Center for Immigration Studies (CIS) arguing that immigrants are a drain on public services without noting that the center's analysis on the issue has been criticized as flawed. A study by the libertarian Cato Institute found that immigrants are actually less likely to rely on public benefits than native-born Americans.
In an article examining the effect immigrants have on Social Security, the Post noted that many undocumented immigrants file tax returns and thus pay into the Social Security trust fund, even though they may never be able to access it themselves because they are legally unable to do so. As a counterpoint, the article then included the views of CIS' Steven Camarota:
But Steven Camarota, director of research at the Center for Immigration Studies, which supports limits on immigration, said that America's immigrants are not young or fecund enough to shore up the system.
"If the immigrants all came at 20 and had seven or eight kids, you would see more of a difference," he said. The average immigrant arrives at age 30, and immigrant women have, on average, 2.1 children, according to the Pew Research Center.
Camarota added that immigrants tend to be poorer than native-born Americans and are therefore more reliant on a wide range of public services. "If you bring in a lot of immigrants who are paying into Social Security but then need all these other social programs -- well, then you're not helping the situation."
Analysts on both sides agree that increasing the number of highly skilled immigrants would shore up the system more than the Social Security Administration report accounts for, since high-skilled immigrants pay more taxes and spend more than low-skilled ones.
However, in a study released in February, the Cato Institute found that immigrants are less likely than native-born Americans to use public services:
[L]ow-income non-citizen immigrants, including adults and children, are generally less likely to receive public benefits than those who are native-born. Moreover, when non-citizen immigrants receive benefits, the value of benefits they receive is usually lower than the value of benefits received by those born in the United States. The combination of lower average utilization and smaller average benefits indicates that the overall cost of public benefits is substantially less for low-income non-citizen immigrants than for comparable native-born adults and children.
Cato also noted that while immigrants' earnings tend to be lower than Americans' when beginning their careers, that changes over time as they invest more in education and training: "[W]hile immigrants begin with lower earnings, their incomes improve as they remain in the United States for longer periods. As immigrants remain longer in the United States, their English proficiency and other job skills improve, which heightens their earning potential."
Fox News figures claimed the U.S. should emulate the United Kingdom by slashing funding to federal disability programs and changing eligibility requirements, despite the fact that U.S. eligibility requirements are already stringent, that the new U.K. benefits tests were largely overturned on appeal, and that research shows changes to disability programs in the U.K. will force thousands of individuals with disabilities into poverty.