October 30, 2014
The Washington Post has long used both its opinion and its news pages to push for cuts to Social Security. It has regularly exaggerated the problems with the program, for example once running a major front page story over the fact that 0.006 percent of Social Security benefits are paid out to dead people.
In keeping with this practice, the Post began a feature polling readers on how they would like to see the projected shortfall addressed with an article headlined, “Social Security Is a Mess. How to Fix It.” Today the paper is reporting on some of the results. The piece begins:
“One thing was clear from the first month’s responses to our question about how to fix Social Security: Readers want something to get done.
“Only 2 percent of responses were in favor of ‘doing nothing,’ which would mean that after 2033 –when the Social Security trust fund is expected to be depleted– retirement benefits would be cut by 23 percent. And only 3 percent of responses said it would be a good idea to put off raising taxes until after the trust fund is depleted, at which point a steep tax hike would be needed to pay benefits [emphasis added].”
While the fact that only 2 percent of responses are in favor of “doing nothing” might sound compelling, there is an obvious problem with the sample. The overwhelming majority of Washington Post readers did not respond to the WaPo piece. The 2 percent in favor of doing nothing represent 2 percent of a tiny minority of Washington Post readers who are themselves far from representative of the population as a whole. Furthermore, the bias is compounded by the fact that if readers do not see an urgency to address the projected shortfall in Social Security they are almost certainly less likely to answer the paper’s poll on the topic.
In effect, what the Post is telling us is that only 2 percent of their readers who took the time to answer its survey on Social Security felt that nothing should be done. Most of us might have guessed something like that without seeing the poll result.
The other part of this effort by the Post to push its policy agenda that is worth noting is the description of the prospective tax hike in 2033 as “steep.” According to the most recent Social Security trustees report, it would take a tax increase of roughly 3.5 percentage points in that year to maintain full benefits, assuming no other revenue (e.g. increasing the cap on taxable wages) is raised.
A tax hike of this magnitude is less than 10 percent of the projected rise in average real wages over the next two decades. In the last three decades, most workers have seen little or no real wage gains because the vast majority of wage growth has gone to those at the top of the income distribution. It will make far more difference to workers’ living standards in 2033 whether we continue the policies that have led to this upward redistribution (e.g. Federal Reserve Board policy that uses high interest rates to keep unemployment from falling, trade policy that uses international competition to lower the wages of most workers, and financial policy that subsidizes Wall Street) than if we raise Social Security taxes to maintain benefit levels. Yet the Post insists that the prospective tax increase in 2033 is “steep.”
In this respect it is worth noting that almost no one even noticed the 2.0 percentage point tax increase at the start of 2013. This tax increase was the result of the end of the payroll tax holiday that had been in effect for 2011 and 2012. Even though this tax increase took place at a time when unemployment was high and wages were stagnant, a Google poll indicated that less than 10 percent of the public recognized that their taxes had been increased. (Roughly 29 percent said their taxes had been increased in 2013, but 20 percent also said their taxes had been increased in 2014, indicating the percent of respondents that likely would have said their taxes had been increased regardless of what happened.)
In short, the Post is clearly pushing an agenda with this feature. It wants to see benefits cut and it wants them cut now. It is using this feature to wrongly imply that Congress is being irresponsible and unresponsive to the public by not following the paper’s preferred course on Social Security. In reality, there are many much more urgent problems (e.g. unemployment and global warming) that would by any objective standard be more deserving of congressional attention.
Furthermore, as anyone who has sat through an intro econ class should know, what matters to workers is their after-tax pay, not their tax rate. This will be determined primarily by the policies that Congress pursues that affect before tax wages rather than any changes Congress might make in the Social Security tax. As a paper that tends to favor the wealthy, it is understandable that the Post only wants its readers to think about taxes and not before-tax income.
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