CNN economics correspondent Kathleen Hays and CNN anchor Kyra Phillips continued CNN's pattern (see here and here) of reporting false and misleading information on Social Security. Hays repeated her false claim that under the current system, the family of a would-be beneficiary who dies before retirement is not entitled to the decedent's benefits; Phillips wrongly equated President Clinton's 1999 plan to invest a portion of the Social Security trust fund in the stock market with President Bush's plan to divert a portion of Social Security payroll taxes into private accounts and cut the program's guaranteed benefits.
On the February 6 edition of CNN's On the Story, Hays reported: "Right now, if you die, and you are -- you have adult survivors, they don't get your Social Security -- your dependent kids, your spouse." In fact, upon reaching retirement age, surviving spouses are entitled to receive the full benefits to which the deceased would have been entitled, as the Social Security Administration website explains. Hays repeated this error in a February 3 article on cnn.com, and she made the same false claim on the February 3 edition of CNN's Wolf Blitzer Reports.
On the February 3 edition of CNN's Live From..., Phillips played a clip from Clinton's 1999 State of the Union address in which Clinton proposed "to invest the surplus to save Social Security," then wrongly asserted that his "idea is the same" as Bush's proposal. In fact, the proposals were very different. Clinton did not propose encouraging workers to divert payroll taxes into private accounts or cutting guaranteed benefits (though he did not rule out the latter). Instead, Clinton's proposal to invest some trust fund assets in the stock market was a specific attempt to avoid "drastic cuts in [guaranteed] benefits" -- like those Bush will likely propose -- by allowing the trust fund to earn a slightly higher rate of return in the stock market. Clinton also rejected proposals that would "drain resources from Social Security," thus avoiding trillions of dollars in transition costs.
From the February 3 edition of CNN's Live From ...:
PHILLIPS: Democrats in Congress say the White House is crunching Social Security numbers just a little too hard and much too loud. You don't need a poll to hear the groans and the boos when the president peers into the future.
Well, let's look into the not-so-distant past, however, to a certain State of the Union speech given by a Democrat.
[start video clip]
CLINTON: Today, Social Security is strong. But by 2013, payroll taxes will no longer be sufficient to cover current payment. By 2032 the trust fund will be exhausted, and Social Security will be unable to pay the benefits older Americans have been promised.
The best way to keep Social Security a rock-solid guarantee is not to make drastic cuts in benefits, not to raise payroll tax rate, not to drain resources from Social Security in the name of saving it. Instead, I propose that we make the historic decision to invest the surplus to save Social Security. Thank you. Specifically, I propose that we commit 60 percent of the budget surplus for the next 15 years to Social Security, investing a small portion in the private sector, just as any private or state government pension would do. This will earn a higher return and keep Social Security sound for 55 years.
[end video clip]
PHILLIPS: Now in 1999, of course, there was a surplus instead of mountainous deficits. But the private investment idea is the same.