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Cavuto Social Security Segment Based on Big Lie

Reported by Judy - January 27, 2007 -

Neil Cavuto revived the issue of changes in social security Saturday (January 27, 2007) with a segment based on a big lie -- that the social security system is unsustainable.

In his "Cavuto on Business" show, Cavuto offered the premise that George Bush and Democrats will strike a compromise: Raise the cap on Social Security payroll taxes in exchange for extending Bush's tax cuts for the rich beyond 2010.

In a banner at the bottom of the screen, Fox News phrased it this way: "Bigge$t Tax Hike in Hi$tory to $ave $ocial $ecurity?"

Of course, Cavuto (who cleverly scheduled the segment for a week when the show's token Democrat, Greg Hymowitz, was absent) never offered any numbers to back up that chyron, let alone any effort to subtract the value of the tax cuts from the tax hikes. He merely said that lifting the cap on earnings subject to payroll taxes would force "11 million Americans to pay a lot more."

Cavuto might have mentioned that the cap on earnings, now at $90,000 a year, covers only about 85 percent of all wages in the U.S. It used to cover 90 percent of all wages, but higher-paid workers have been receiving raises that are so out-of-whack with the rest of Americans, that the percentage of all wages subject to the payroll tax has declined, according to the Social Security Network. As I said, Cavuto might have mentioned that information, but it would have undermined his agenda, so he didn't.

Even with his biased lead-in, Cavuto's panel of guests was split on whether Bush should agree to such a deal, with Adam Lashinsky of Fortune magazine and Ben Stein, best-selling author, former Nixon staffer, and investor, saying he should. Criticizing the hypothetical deal were Charles Payne, wallstreet.com; Patricia Powell, the Powell Financial Group; Jim Rogers, investor and author; and Ben Ferguson, host of "The Ben Ferguson Show."

Rogers wanted to revive Bush's doomed privatization scheme, which the public hated. Ferguson, one of those snot-nosed right-wingers who has memorized talking points that the GOP loves so much, also plunked for privatization, saying young people have "about zero" faith that social security will be around for them. "And the reason why is we know that the system is going to go broke for us," he said.

Actually, that is a big lie. Projections from the Social Security Administration are that the system can pay full benefits until 2041. But the administration uses conservative assumptions about economic growth to make that projections. Slightly more optimistic assumptions about economic growth used by the non-partisan Congressional Budget Office say that the system can pay full benefits until 2052. After that, it can pay about 75 percent of benefits.

Using the assumptions of the non-partisan group instead of Bush's lackeys in the Social Security Administration, the system could pay full benefits until 2052. Assuming little Ben is about 30 years old, and he retires at age 67, he would be guaranteed eight years of full benefits. And that's if the nation did absolutely nothing between now and then.

But as Al Franken pointed out in his book, The Truth (with Jokes), even the CBO may be too cautious in its assumptions of economic growth. Citing the work of David Langer, an independent actuary who has studied the projections for ten years, Franken notes that Langer has found the optimistic projections made in the past (but not relied on) have really been the most accurate. And using the optimistic projections, social security would have a surplus in 2042.

That's right a surplus. Or as Fox News' graphics department would put it, a "$urplu$." Which means Benny-boy would still get all his benefits, or benefit$.

But that information (found on pp. 189-190 of Franken's book) was not in the GOP talking points, so Benny didn't have it at his fingertips. What he did have was some out of date information on the system. He said supporters of the system are "going to say we need to change the age from 65 to 67.”

They're not going to say that, I guarantee you, for one very big reason. That change was made years ago, and the world has not ended. That's right Benny-boy. For anyone born in 1960 or later, the age of retirement at which full social security benefits can be received is age 67. It's been that way since 1983.

Benji also claimed that social security has "no return on our investment," which also is a load of crap. As independent actuary David Langer has pointed out, young people whose parents are receiving social security are freed from having to support their parents to the tune of several thousands of dollars a year. The rate of return on not having to spend that money is infinity.

But Little Ben's final lie came when he said Democrats "need social security to pander to their base."

Actually, the nation needs social security to prevent old people from living in dire poverty -- old people like our parents and grandparents. According to the Social Security Administration, 10 percent of senior citizens now live in poverty. Without social security, 50 percent would.

That's one statistic that will never make its way onto any Fox News program. Taking care of parents and grandparents is not part of their family values agenda.