The $600 Billion Man

The New York Times
March 15, 2005

The $600 Billion Man
By PAUL KRUGMAN

The argument over Social Security privatization isn't about rival views on how to secure the program's future - even the administration admits that private accounts would do nothing to help the system's finances. It's a debate about what kind of society America should be.

And it's a debate Republicans appear to be losing, because the public doesn't share their view that it's a good idea to expose middle-class families, whose lives have become steadily riskier over the past few decades, to even more risk. As soon as voters started to realize that private accounts would replace traditional Social Security benefits, not add to them, support for privatization collapsed.

But the Republicans' loss may not be the Democrats' gain, for two reasons. One is that some Democrats, in the name of centrism, echo Republican talking points. The other is that claims to be defending average families ring hollow when you defer to corporate interests on votes that matter.

Let's start with the case of the bogus $600 billion.

In his Jan. 15 radio address, President Bush made a startling claim: "According to the Social Security trustees, waiting just one year adds $600 billion to the cost of fixing Social Security." The $600 billion cost of each year's delay has become a standard administration talking point, repeated by countless conservative pundits - who have apparently not looked at what the trustees actually said.

In fact, the trustees never said that waiting a year to "fix" Social Security costs $600 billion. Mr. Bush was grossly misrepresenting the meaning of a technical discussion of accounting issues (it's on Page 58 of the 2004 trustees' report), which has nothing to do with the cost of delaying changes in the retirement program.

The same type of "infinite horizon" calculation applied to the Bush tax cuts says that their costs rise by $1 trillion a year. That's not a useful measure of the cost of not repealing those cuts immediately.

So anyone who repeats the $600 billion line is helping to spread a lie. That's why it was disturbing to read a news report about the deputy commissioner of the Social Security Administration, who must know better, doing just that at a pro-privatization rally.

But in his latest radio address, Mr. Bush - correctly, this time - attributed the $600 billion figure to a "Democrat leader." He was referring to Senator Joseph Lieberman, who, for some reason, repeated the party line - the Republican party line - the previous Sunday.

My guess is that Mr. Lieberman thought he was being centrist and bipartisan, reaching out to Republicans by showing that he shares their concerns. At a time when the Democrats can say, without exaggeration, that their opponents are making a dishonest case for policies that will increase the risks facing families, Mr. Lieberman gave the administration cover by endorsing its fake numbers.

The push to privatize Social Security will probably fail all the same - but such attempts at accommodation may limit the Democrats' political gain.

Meanwhile, the party missed a big opportunity to make its case against increasing families' risk by acquiescing to the credit card industry's demand for harsher bankruptcy laws.

As it happens, Mr. Lieberman stated clearly what was wrong with the bankruptcy bill: "It failed to close troubling loopholes that protect wealthy debtors, and yet it deals harshly with average Americans facing unforeseen medical expenses or a sudden military deployment," making it unfair to "working Americans who find themselves in dire financial straits through no fault of their own." A stand against the bill would have merged populism with patriotism, highlighting Democrats' differences with Republicans' vision of America.

But many Democrats chose not to take that stand. And Mr. Lieberman was among them: his vote against the bill was an empty gesture. On the only vote that opponents of the bill had a chance of winning - a motion to cut off further discussion - he sided with the credit card companies. To be fair, so did 13 other Democrats. But none of the others tried to have it both ways.

It isn't always bad politics to say things that aren't true and claim to support things you actually oppose: just look at who's running the country. But Democrats who engage in these tactics right now create big problems for a party that has been given a special chance - maybe its last chance - to remind the country of what Democrats stand for, and why.

E-mail: krugman@nytimes.com