A Media Matters for America analysis of guests who have appeared on cable or network news since the November 2, 2004, election to discuss Social Security failed to find one independent expert with a graduate degree in economics who supported allowing workers to divert Social Security payroll taxes into private accounts.
Media Matters found eight guests who held graduate degrees in economics; three supported privatizing Social Security, and five opposed it. While all five opponents of privatization are supported by independent universities and organizations, all three privatization proponents are funded by right-wing organizations and foundations.
Following are the three pro-privatization economists, their economic credentials, and the organizations and foundations that support them:
David John, who received his master's degree in economics from the University of Georgia in Athens, is a research fellow at The Heritage Foundation's Thomas A. Roe Institute for Economic Policy Studies.
The Heritage Foundation has called for the creation of private accounts, according to the policy recommendations outlined in the 2004 Issues in Brief.
The Heritage Foundation has received funding from right-wing foundations, including the Sarah Scaife, John M. Olin, and Lynde and Harry Bradley foundations.
John appeared on CNN's Wolf Blitzer Reports on November 4, 2004, and CNN's In the Money on January 15, as well as NBC's Nightly News on December 9, 2004 and January 11.
- On Wolf Blitzer Reports, John claimed that private accounts "would improve" retirement benefits. But as Media Matters has previously noted, privatization results in increased financial risk to individuals by shifting money out of Social Security and into the stock market. And, if the money in an individual's private account earned less than 3 percent above the rate of inflation, the worker would actually receive less than he or she would have had all their payroll taxes remained within the system.
- On the January 15 edition of In the Money, John stated that one of the biggest misconceptions about Bush's plans to privatize Social Security is that we are not facing a crisis and, according to John, "the fact is that yes, we are facing a crisis." However, the Social Security board of trustees projected in its 2004 report that the trust fund will be able to pay all promised benefits for another 37 years, or until 2042. According to a projection by the nonpartisan Congressional Budget Office, the trust fund will be able to pay all promised benefits until 2052.
William W. Beach, who holds a master's degree in history and economics from the University of Missouri-Columbia, is director of The Heritage Foundation's Center for Data Analysis and John M. Olin Senior Fellow in Economics.
Beach appeared on NBC's Nightly News on December 18, 2004, and on FOX News' The O'Reilly Factor on January 27.
- On the December 18 edition of NBC's Nightly News, Beach stated that if younger workers "start saving today, they can actually have quite a bit of money built up in these savings accounts by the time they get to retirement." Beach failed to note the increased risk that individuals would shoulder in diverting a portion of their payroll taxes out of Social Security and into private accounts.
Stephen Moore, who holds an master's degree in economics from George Mason University, is the former president of Club for Growth and current president of the Free Enterprise Fund, which according to a January 5 New York Times report is a new "Republican lobby group" that "hopes to raise about $15 million for television advertising and other lobbying to bolster President Bush's domestic agenda in Congress." Moore is also a senior fellow at the Cato Institute and a financial columnist at National Review Online.
Club for Growth, Free Enterprise Fund, and the Cato Institute all advocate Social Security privatization. Cato operates the pro-privatization Project on Social Security Choice, and its plan for privatization states: "Individuals would be able to privately invest their half (6.2 percentage points) of their payroll tax through individual accounts." Club for Growth recently launched a blog called Social Security Choice to promote private accounts. The Free Enterprise Fund lists "personal investment accounts for Social Security" as "as an issue of great concern" that it "will establish local and state chapters around the nation to advance."
Club for Growth has received funding from conservative donors, including National Review president Thomas Rhodes and Hudson Institute trustee emeritus Daniel C. Searle, as well as small donations from members of the Club. Cato funders include the Sarah Scaife, John M. Olin, and Lynde and Harry Bradley foundations.
Moore appeared on CNN's Crossfire on December 16, 2004; on MSNBC's Hardball with Chris Matthews on December 15, 2004; and on NBC's Nightly News on January 2.
- In his December 15 Hardball and December 16 Crossfire appearances, Moore stated that Social Security "is the Titanic headed to iceberg," echoing the misleading crisis rhetoric used by Johns and others, as noted above. On Hardball, Moore also claimed that, according to Cato studies, "the average young worker is only going to get a 1 or 2 percent return on their Social Security money," but private accounts would provide a "4 or 5 percent rate of return." Many other economists have argued that Bush's proposal will increase retirees' exposure to risk without producing a better rate of return than the current system. Princeton University economist and New York Times columnist Paul Krugman argued on February 1 that White House projections being used to promote privatization are contradictory, as they rely on a low long-term economic growth rate occurring in conjunction with a high rate of return on equities -- a combination that Krugman calls "mathematically impossible."
Following are the five anti-privatization economists, their economic credentials, and the independent organizations that support them:
Paul Krugman, who received a Ph.D. in economics from the Massachusetts Institute of Technology (MIT), is a professor of economics at Princeton University and a columnist for The New York Times. Krugman served on the Council of Economic Advisers in the Reagan White House from 1982 to 1983.
Krugman appeared on CBS's Evening News on January 16; CNN programs Lou Dobbs Tonight on February 3, In the Money on February 5 and Newsnight with Aaron Brown on February 8; and MSNBC's Hardball with Chris Matthews on December 27, 2004, and February 7.
- In his appearances, Krugman asserted that Social Security is not in crisis, but will experience a "mild long-run shortfall" which is smaller, at 0.4 percent of GDP over 75 years, than that created by the Bush tax cuts, which will result in a 2 percent shortfall. Krugman also stated that private accounts would not reduce the Social Security shortfall, as the Bush administration has conceded. According to Krugman, Social Security is not in need of immediate reform.
Robert S. Chirinko, who holds a Ph.D. in economics from Northwestern University, is a professor of economics at Emory University.
- Chirinko appeared on CBS's Evening News on February 3, referring to the partial privatization of Social Security as "a shell game," in which changes are made, but "at the end of the day, you actually have less than what you started with."
Robert B. Reich, who holds a master's degree in economics from Oxford University, is currently University Professor and Maurice B. Hexter Professor of Social and Economic Policy at Brandeis University and at Brandeis' Heller School of Social Policy and Management. He served as Secretary of Labor in the Clinton administration. Reich appeared on CNN's Late Edition with Wolf Blitzer on January 23; MSNBC's Hardball with Chris Matthews on December 15, 2004, MSNBC Reports on January 17, Scarborough Country on January 19, and MSNBC's post-State of the Union address coverage on February 3; and FOX News' The Big Story with John Gibson on November 5, 2004.
- In his appearances, Reich rejected Social Security crisis rhetoric, stating "there's absolutely no crisis here." According to Reich, "over the long term, Social Security does need to be reformed." Reich advocated raising the retirement age and opposed private accounts.
Alicia H. Munnell, who holds a Ph.D. in economics from Harvard University, is currently Peter F. Drucker Professor of Management Sciences at Boston College and director of the college's Center for Retirement Research. Munnell served under Clinton as assistant secretary of the treasury for economic policy from 1993 to 1995 and as a member of the President's Council of Economic Advisers from 1995 to 1997.
- On ABC's World News Tonight on January 14, Munnel noted: "Even if we do nothing after 2042, we will have enough money coming in to pay about three quarters of promised benefits." As the Social Security trustees noted in their 2004 report, the date for Social Security's projected insolvency is 2042, at which point the system would continue to be able to pay out a projected 73 percent of currently promised benefits.
Robert M. Ball, who earned a master's degree in economics from Wesleyan University, is currently a self-employed writer, lecturer and consultant. Ball served as Social Security commissioner from 1962 to 1973 under former presidents Kennedy, Johnson and Nixon. From 1973 to 1980, Ball held the post of Senior Scholar at the National Academy of Science's Institute of Medicine.
- On the CBS Evening News on February 14 and the CBS Morning News on February 15, Ball stated that there "isn't anything serious wrong" with Social Security and "there is no crisis." Ball also stated that Bush's plan to privatize Social Security would do nothing to close the Social Security shortfall. According to Ball: "In the very long run, there is a shortfall. It can be fixed. It can be met with very little pain."