04/11/2012 03:49 pm ET Updated Apr 11, 2012

Washington Post Misleads Readers On Deficits And Entitlements Twice In One Week

As a habitual reader of the Washington Post, I've long become inured to some of the fun editorial quirks of that paper. For instance, it is more or less institutionally opposed to the preservation of the New Deal-era entitlements that keep the elderly from sputtering completely into poor health and impoverishment. Or, as Dean Baker puts it more succinctly, "In the view of ... the Post, a dollar that it is in the pocket of low or middle class people is a dollar that could be in the pocket of the rich." This is a very bad outcome, to the Post's reckoning.

Additionally, the Post apparently decided long ago to take a stab at being the nation's leading screechy voice wailing endlessly about "TEH DEFICITZ." And over the course of the past few years, Post writers have torn many a garter lamenting the fact that the American people would, for some reason, prefer to have their short term, massive unemployment crisis ameliorated rather than focus on longer term deficit problems -- especially when all the "deemed to be serious" deficit solutions endorsed by the paper would add to the burdens of an already unemployed and uninsured populace, who were last seen saving Wall Street with nine trillion of their dollars.

As you might suspect, these two obsessions often go hand-in-hand with one another, and they are often pitched with a generous soupcon of editorial dishonesty. But that's the standard, and if this week is any indication, then the Post is having a banner week, having already published two crap-suffused pieces on the matter. And the week is just barely half over!

We begin on Monday, with Robert Samuelson's lamentation that Franklin Delano Roosevelt would have totally hated what Social Security has become. It's not entirely certain how Samuelson knows this -- he extrapolates from past comments made by FDR that do not take into consideration how his poltergeist might feel about the world we live in now.

Nevertheless, Samuelson brings up some things that I can live with. He laments that "millions of Americans" are under the impression that they are paying, through Social Security withholdings, into their own retirement, rather than paying into a trust fund that prevents their grandparents from living in squalor and hopelessness. This is a perennial misconception that the "Social Security privatization" movement has done much to spread. Samuelson goes on to note that there are fewer payees in the current cohort of contributors than there have been in the past, which is something that most people have noticed. But, as Dean Baker points out, there's a lot here that Samuelson isn't telling readers:

On average we were much richer in the 90s than in the sixties, in spite of the fall in the ratio of workers to retirees. The same will be true in 2030, even assuming that we see the projected decline in the ratio of workers to retirees.

A small fact that Samuelson never mentions in this piece is that the Congressional Budget Office projects the program to be fully funded through 2038, with no changes whatsoever (i.e. no new taxes, contra Samuelson). If we want to make the program fully solvent for the rest of the century, a tax increase that is equal to 5 percent of projected wage growth over the next three decades should be roughly sufficient to do the trick. Are you scared yet?

There is an issue that most workers have not shared in the economy's growth over the last three decades. This is indeed a problem. If recent trends in inequality persist then any increase in Social Security taxes will be a burden, but the problem here are the policies that have brought about this upward redistribution of income, not Social Security.

As Baker notes here, solving the problem of Social Security solvency is a matter of simple arithmetic. Baker proposes a tax increase. We could also remove the contribution caps on FICA withholding. We could raise the retirement age. Or, if we just had to pass on a simple arithmetic solution in favor of a more complicated policy solution, we could means-test Social Security disbursement. Samuelson, I believe, is predisposed toward the latter two options. But what he's really all about is preventing anyone from having a discussion on the simpler arithmetic solutions -- or from talking about the bare fact that the system is solvent until 2038. And he gets there with a staggering little bit of mendacity:

Although new recipients have paid payroll taxes higher and longer than their predecessors, their benefits still exceed taxes paid even assuming (again, fictitiously) that they had been invested. A two-earner couple with average wages retiring in 2010 would receive lifetime Social Security and Medicare benefits worth $906,000 compared with taxes of $704,000, estimate Steuerle and Rennane.

By all rights, we should ask: Who among the elderly need benefits? How much? At what age? If Social Security and Medicare were considered “welfare” — something the nation does for its collective good — these questions would be easier. We would tailor programs to meet national needs. But entitlements are viewed as a higher-order moral claim, owed individuals based on past performance. So a huge part of government spending moves off-limits to intelligent discussion.

See what he did there? Suddenly and without warning, what was a discussion about Social Security becomes a discussion about Medicare -- a program that is more problematic, less solvent, more subject to rising external costs, and more resistant to a simple arithmetic solution. Now, the waters are muddied. Back to Baker:

It wasn't an accident that he brought Medicare into this discussion. That is because Steuerle and Rennane's calculations show that this average earning couple would get back less in Social Security benefits than what they paid in taxes. That would not fit well with Samuelson's story, so he brings in Medicare (remember this is the Washington Post).

And, the high cost of Medicare benefits is not due to their great generosity. The high cost is due to the fact that we pay our doctors, our drug companies, and our medical equipment suppliers way more than do people in any other country, and we have no better outcomes. If our per person costs for health care were comparable to costs in Germany, Canada, the UK or any other wealthy country, then workers would be paying far more for their Medicare benefits than the cost of what they are getting in care.

Baker calls this "a nice trick." Should the Washington Post be in the business of "tricking" their readers? Apparently, so. But, hey, while we're on the subject of health care, let's smash cut to Tuesday, and this blockbuster story about how the Affordable Care Act actually adds to the deficit, according to an explosive new study from an Obama-administration-approved policy analyst, OMGZ:

President Obama’s landmark health-care initiative, long touted as a means to control costs, will actually add more than $340 billion to the nation’s budget woes over the next decade, according to a new study by a Republican member of the board that oversees Medicare financing.

The study is set to be released Tuesday by Charles Blahous, a conservative policy analyst whom Obama approved in 2010 as the GOP trustee for Medicare and Social Security. His analysis challenges the conventional wisdom that the health-care law, which calls for an expensive expansion of coverage for the uninsured beginning in 2014, will nonetheless reduce deficits by raising taxes and cutting payments to Medicare providers.

What's glossed over here is that Blahous isn't acting in his duties as a Medicare trustee. Rather, he's carrying water for the Koch-funded Mercatus Center. That's the origin of this "study."

Of course, there's nothing wrong with reporting on it. But it is the equivalent of a study produced by Heath Care For America Now (HCAN) that found that beneficiaries of health care reform would all get a white pony that crapped magical wishing beans, if HCAN were to ever produce such a thing, which it apparently has the good sense not to do. The point is, Post readers should be better armed against a "study" based in disingenuousness. And as Jonathan Chait notes, the disingenuousness on display in this study is painfully obvious:

You may wonder what methods Blahous used to obtain a more accurate measure of the bill’s cost. The answer is that he relies on a simple conceptual trick.

There's that word "trick" again! Chait continues:

Medicare Part A has a trust fund. By law, the trust fund can’t spend more than it takes in. So Blahous assumes that, when the trust fund reaches its expiration, it would automatically cut benefits.

The assumption is important because it forms the baseline against which he measures Obama’s health-care law. He’s assuming that Medicare’s deficits will automatically go away. Therefore, the roughly $500 billion in Medicare savings that Obama used to help cover the uninsured is money that Blahous assumes the government wouldn’t have spent anyway. Without the health-care law, in other words, we would have had Medicare cuts but no new spending on the uninsured. Now we have the Medicare cuts and new spending on the uninsured. Therefore, the new spending in the law counts toward increasing the deficit, but the spending cuts don’t count toward reducing it.

"That is a completely bizarre assumption," Chait says, adding that "If Blahous’s assumptions are right, then we don’t really have an entitlement problem at all."

Remarkably, the Post does feature a post from Ezra Klein, following on Chait by rightly pointing out that there is no way that Blahous even believes his own conclusions:

Blahous hasn’t discovered some heretofore unknown fact about the Affordable Care Act. He’s just showing that if you change the budgetary rules to specifically disadvantage Obamacare, you can make the law look worse.

But to get that answer, you have to abandon the idea that the right way to score a bill is to see if more money is coming in then going out. That’s what Blahous has done here. But no one is interested in actually moving to that kind of a baseline. That baseline would mean neither Medicare nor Social Security’s looming fiscal challenges actually add to the deficit. That baseline would mean the “Obama deficits” are quite small. That baseline would mean Paul Ryan’s budget is “double counting.”

Lots of the Affordable Care Act’s skeptics are trumpeting the Blahous study. But none of them actually use that baseline. Nor do they plan to switch over to it. And that means they don’t really believe the study.

At this point, you're probably wondering why I think the Post is so bad, seeing as it has let Klein respond to this directly. Hey, we're having a great debate, right? No, we're not. One side of the debate is being willfully disingenuous. That should be a disqualifier. What Klein is pointing out is that his paper made an obvious and appalling mistake. But as we saw that time the Post published a willfully misleading editorial from George Will, the paper's stance is that a "falsehood" is just one more interesting point of view, and it's totally okay for readers to be led to false inferences on important topics.

But, hey, as I said, the week is only half over. So let's get excited about what the Post will do for their next "trick."

Robert Samuelson Shows that the Post Has no Fact Checkers on Its Opinion Pages [Dean Baker @ CEPR]
The Bogus Obamacare-Deficit Study [Jonathan Chait @ NY Mag]

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