Try as they might, conservatives cannot rescue Fiscal Commission Co-Chair Alan Simpson from self-marginalization. But while Simpson’s revealing gaffes remain a welcome political gift for opponents of Social Security and Medicare cuts, his staying power in elite policymaking circles only attests to the sad and distorted state of our nation’s fiscal debate—and the powerlessness of mainstream America within that discussion. That Simpson was probably the most prominent Republican President Obama could find to chair the Commission, is just the latest sign of how Democrats have had to define “moderate” down to slightly-left-of-nutjob.
Charles Blahous, a conservative Social Security expert, and public trustee of the Social Security trust funds, tries to undo the damage done to the Fiscal Commission’s credibility by Ryan Grim’s conversation with Fiscal Commission Co-Chair Alan Simpson. While some of the points he makes are valid, all fail to restore confidence in Simpson as a prominent voice on Social Security policy, or the fairness of the process by which the Fiscal Commission developed its recommendations.
Here’s the rundown. Grim found Simpson cursing out AARP, calling Social Security a “Ponzi scheme,” and claiming that life expectancy was 63 when Social Security was created at an event hosted by the Investment Company Institute, a financial industry trade group.
Grim caught up with Simpson and challenged him on the life expectancy statistics. It turns out, Grim noted, that according to the Social Security Trustees, life expectancy if you reached age 65 was 79.7 years for women and 77.7 years from men. Overall life expectancy was lower because of high infant and childhood mortality rates that medical advances have since been largely eliminated. Contrary to Simpson’s implied argument that Social Security was intended to cover very few people, the life expectancy statistics at age 65 confirmed that it served a very real segment of the population.
Simpson responded with confident disbelief, saying, “Just because a guy gets to be 65, he’s gonna live to be 77? Hell, that’s my genre. That’s not true.”
Chuck Blahous defends Simpson, claiming that Simpson was clearly confusing life expectancy at any age with life expectancy at age 65. In any event, Blahous argues, Simpson’s point stands that overall increases in life expectancy have made Social Security’s finances unsustainable. Simpson’s statement does not discredit the Bowles-Simpson [Fiscal Commission] recommendations, because the “Commission” used SSA’s estimates of both kinds of life expectancy, regardless of what Simpson said. Finally, the ongoing 1983 increase in the normal retirement age from 65 to 67, Blahous says, does not account for the full increases in life expectancy
But Blahous’s argument doesn’t hold water. In the first place, He gives Simpson far too much of the benefit of the doubt. What Simpson intended is not 100 percent clear; what he said is. And even then, what he intended is probably 99.9 percent clear. Simpson was evidently not familiar with the distinction between life expectancy at birth and life expectancy at age 65, and displayed a stubborn aversion to confirming the facts when he was presented with an account that did not square with his own.
It is really the latter aspect of the interaction, in which Simpson showed a total lack of intellectual curiosity, or openness to the possibility that he might be mistaken, that is most damning. If it were an aberration for Simpson that would be one thing, but unfortunately, Simpson has a long record of hostility to facts and people that challenge his grave pronouncements on Social Security. As head of the Fiscal Commission, he repeatedly derided critics who presented him with inconvenient information about the program’s finances (see Lawson, Alex), and was dismissive of Americans who rely on Social Security (see Carson, Ashley, and “cow with 310 million tits”).
More recently, Zach Carter heard Simpson parroting the oft-repeated myth that because Social Security had 16.5 workers for every 1 retiree in 1950, and only 3 workers for every retiree today, it is now de-facto unsustainable. In fact, the program had a 16-to-1 worker-retiree ratio in 1950 because of the addition of millions of farm, domestic and self-employed workers that year, who had not yet begun receiving benefits. Ten years later it was 5-to-1, and by 1975 it was at the 3-to-1 ratio it has now. More importantly, since 1961, as the number of workers supporting beneficiaries got smaller, Social Security’s tax rates and base have both more than doubled, going from 3% to 6.2% (on the employee side), and $30,000 to $106,800 (both current dollars), respectively.
As for Blahous’s argument that increases in the retirement age have failed to accommodate the financial impact of growth in life expectancy, he is comparing apples and oranges. As he concedes, growth in life expectancy is not the largest contributor to Social Security’s projected long-term shortfall (the decline in fertility and increase in income not covered by the cap are the biggest causes). What Blahous doesn’t mention is that life expectancy’s financial impact is so insignificant that it could be entirely balanced by miniscule revenue increases. As Monique Morrissey of EPI explains, in her excellent paper, Beyond Normal: Raising the Retirement Age is the Wrong Approach for Social Security, longevity gains could be offset by a 0.01% increase in the payroll tax, phased in over 60 years from 2025 to 2084.
I disagree with Blahous that the Commission’s proposal must be considered independently of Alan Simpson. The Commission has been irrevocably discredited by Simpson’s record of ignorant and insensitive remarks. Blahous is correct that the Commission staff, who no doubt did the bricks-and-mortar work of running the numbers for the recommendations, know the correct numbers on life expectancy. But the Commission’s—or, more accurately, Erskine Bowles and Alan Simpson’s—proposal, has earned gravitas in the media and in Congress (where a group of Senators is using its proposal as the basis for a bipartisan deficit deal), at least in part by virtue of the distinction enjoyed by the two men who headed it. As evidenced by the location of his very encounter with Grim, Simpson continues to be an active spokesman for a center-right brand of deficit reduction, and use his perch to mischaracterize Social Security and other programs.
The practical implications of Alan Simpson’s leadership are two-fold. First, his constant repetition of exaggerations and myths about Social Security has no doubt contributed to the constant drumbeat of fear that has characterized debate over the deficit in general, and Social Security in particular. When the President’s Republican appointee as chair of the Fiscal Commission can spew such misinformation about Social Security and is received as “brave” and “honest” on all of the major television networks, is it any wonder that the public believes Social Security is “broke,” “not gonna be there,” and responsible for our debt?
More importantly, Simpson represents just what it means to meet Republicans on their terms in the current political climate in Washington. When President Obama, a Democratic president, appointed Simpson to be the Republican face of a blue-ribbon Fiscal Commission, Simpson was hailed for his spunk and wit, and willingness to “tell it like it is.” Without a Republican figure like Simpson who was willing to agree to cutting tax loopholes, which angered Grover Norquist, it is likely that a bipartisan Commission would not have been able to exist. But beyond ticking Norquist off, and not embracing the Ryan budget wholesale, Simpson is not especially “moderate.” And neither was the Commission he headed, for that matter. The composition of the Commission’s proposal was two-thirds cuts and one-third revenue increases at a time when tax rates on the wealthiest Americans have reached their lowest levels since the 1950s. Is it really worth courting moderates like Alan Simpson who are liberal only when compared to Grover Norquist and Paul Ryan?
In denouncing Simpson, we must also reject the logic of bipartisan appeasement that empowered him. Rather than work with Republicans to reduce the deficit on their unfair and ultra-conservative terms, we should stand our ground, knowing that the public stands with us.