Day after press conference, largest papers masked impact of Bush's proposed Social Security cuts

››› ››› ANDREW SEIFTER

One day after President Bush's April 28 press conference, the 10 largest U.S. newspapers obscured the full impact of Bush's proposed cuts in Social Security benefits. While some articles failed to note that the proposal would drastically cut benefits for lower-middle-income workers and not just for the wealthy, others neglected to describe the changes as cuts at all, instead repeating the Republican talking point that they would merely slow the rate of growth in benefits. The Wall Street Journal and the Associated Press even falsely reported that low-income workers would receive greater benefits under the Bush plan than under current law.

Bush's proposal, which the White House acknowleged is based upon a plan developed by Robert C. Pozen, would provide a tiered system of benefits based on income. This proposal would likely cut the level of benefits promised under the current Social Security system for all workers making more than $20,000 a year -- or just above the poverty threshold of $19,157 for a family of four, with two children -- while leaving benefit levels for those making under $20,000 unchanged.

Newspapers disguised benefit cuts by describing them as "slow[ing] future increases in benefits"

Several major newspapers adopted Bush's characterization of his proposal as a slowdown in the rate at which benefits increase for higher income workers, rather than stating what it would be -- a cut in promised benefits.

In an article titled "Bush Recasts Message on Social Security," the Los Angeles Times reported in the lead paragraph that Bush "favored changing the pension system so that benefits for low-income workers would grow faster than those for wealthy retirees." Similarly, USA Today reported that Bush endorsed a "plan that would slow future increases in benefits for middle- and upper-income workers," the Houston Chronicle's lead paragraph reported that he "proposed a slower increase in benefits for middle- and upper-income future retirees," and the Chicago Tribune reported that he proposed "curb[ing] the growth in benefits for middle-class and wealthy Americans while pledging that low-income workers would see their benefits rise faster than the well-to-do." Other major newspapers, such as The Philadelphia Inquirer, made comparable characterizations of the Bush proposal, and the New York Daily News merely quoted Bush's own explanation of the changes.

But such accounts fail to reveal that Bush's proposal for "progressive indexing," which the White House says is based upon the Pozen plan, would result in substantial cuts in the benefit levels promised under the current Social Security system.

According to a recent study by the Center on Budget and Policy Priorities, the "progressive price indexing" plan advanced by Pozen "would impose substantial benefit reductions" on average and wealthy workers "relative to the benefits that the worker would receive under the current benefit structure." The CBPP report also noted that "[t]hese are much larger benefit reductions than those included in alternative plans that achieve sustainable Social Security solvency through a mix of revenue increases and benefit reductions."

Although it failed to explicitly acknowledge the benefit cuts in its main article on the press conference, USA Today summarized the impact of the Bush proposal in a separate article on "progressive indexing":

The change sounds semantic, but the impact would be considerable. Wages historically rise faster than prices, which means the retirement benefits for better-paid workers would be significantly lower than under the current system.

Newspapers failed to reveal that benefits cuts would impact lower-middle and middle income workers

Many major newspapers acknowledged that Bush called for benefits cuts for "wealthier workers" or "higher-income" earners but failed to report that these cuts would also impact lower-middle and middle-class workers. For example, while the headline on a New York Times article accurately acknowledged that "Bush Cites Plan That Would Cut Social Security Benefits," staff writers Richard W. Stevenson and Elisabeth Bumiller reported that "he proposed doing so in a way that would demand the most sacrifice from higher-income people while insulating low-income workers." The Times story was also picked up by The Denver Post. The Daily News simply quoted Bush's own claim that "benefits for low-income workers will grow faster than benefits for people who are better off."

The Washington Post did report that Bush's plan would "curtail future Social Security benefits for all but low-income retirees," although it did not make clear who "all but low-income retirees" would be under the proposal. The Inquirer was somewhat more descriptive about who would be affected, but, again, repeated Bush's claim about cuts simply being a slowdown in benefit increases, reporting that Bush's proposal "would let benefits grow as already promised for the poorest Americans but would cut the rate of increase in benefits for the rest."

In addition to failing to report that Bush had actually proposed "cuts," the Los Angeles Times article also failed to note the impact of those cuts on the middle class by describing only the impact on "low-income workers" and "wealthy retirees."

Whether or not they mentioned the impact on middle-income workers, none of the major newspapers attempted to define precisely what income levels they were attributing to "low-income" and "wealthy" workers. For the articles that didn't mention the middle class, anyone who is not "wealthy" was, by implication, unaffected by Bush's plan. But the proposal is projected to result in significant benefit reductions for lower- middle and middle income workers, not just the wealthy. As the CBPP report noted, "Full 'price indexing' would make a change in the Social Security benefit formula so that initial Social Security benefits would keep pace only with prices, rather than wages, from one generation to the next. Because prices increase more slowly than wages, this would result in progressively larger benefit reductions over time." The CBPP then documented that the Pozen proposal for price indexing would result in benefit cuts for all workers making more than $20,000 a year:

The Pozen proposal would use price indexing to determine the benefits for "maximum earners," people who currently make $90,000 or more annually. Lower-earners -- specifically the bottom 30 percent of earners, or those who make less than about $20,000 currently -- would continue to have their benefits calculated under the current formula. Anyone whose annual earnings over his or her career averaged between $20,000 and $90,000 would get a benefit somewhere between the currently promised benefit and the benefit that would be provided under price indexing. For example, a worker making about $35,000 annually would be subject to about half of the price-indexing benefit reduction, while a worker making about $55,000 annually would be subject to more than 80 percent of the price-indexing benefit reduction.

Wall Street Journal, Associated Press falsely reported that low-income workers will receive greater benefits than under the current system

In its report on Bush's Social Security proposal, The Wall Street Journal falsely reported that the plan "actually would leave low-income workers better off than they are under current law." Similarly, the Associated Press reported that Bush urged Congress to "tilt the system to benefit low-income retirees." In fact, as the CBPP noted, "low earners ... would continue to have their benefits calculated under the current formula."

Posted In
Economy, Social Security
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