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Home Publications Blogs Beat the Press WAPO Ombudsman Defends Hit Job on Social Security

WAPO Ombudsman Defends Hit Job on Social Security

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Friday, 04 November 2011 22:23

If there were ever any doubts that "Fox on 15th Street" was a fitting label for the Washington Post, Patrick Pexton, the paper's ombudsman removed them with his defense of the Post's front page piece on Social Security last Sunday. Just to remind readers, the whole premise of that piece, as expressed in its headline, is that Social Security has crossed some "treacherous milestone" because it had gone "cash negative earlier than expected."

While this assertion was presented in a sensationalistic manner in the Post, as both the headline and the lead, it is actually not true. Social Security has not gone "cash negative" in the sense that the trust fund is still growing. While current benefit payments exceed designated Social Security tax revenue, the income to the system, which includes interest on its holdings of government bonds, still exceeds benefit payments.

In this sense it is simply wrong to say that the system is cash negative. More money is still coming into the system than is going out. Obviously the Post meant to say that benefit payments exceed tax revenue, but tax revenue is only part of the income for the program. It is a serious failure by the Post to ignore the income stream from interest payments, which is compounded by the failure of the ombudsman to recognize this failure.

This is really not something that is arguable -- Social Security has a stream of income from the interest on its bonds. The Post and its ombudsman may not like this fact, but it is nonetheless true.

The ombudsman also chose to ignore several misleading or false claims that the Post used to advance its Social Security crisis story. For example, the original piece told readers that "the payroll tax holiday is depriving the system of revenue." This is not true. Under the law, the Social Security system is fully reimbursed for the money not collected as a result of the payroll tax holiday.

The piece also claimed that Senate Majority Leader Harry Reid was wrong when he claimed that Social Security was not contributing to the budget deficit. In fact, under the law Social Security has a separate budget that is not part of the on-budget budget. The program can only spend money from its own trust fund, which is money raised through designated taxes or the bonds purchased with this tax revenue. For this reason, it cannot legally contribute to the budget deficit. Presumably the Post and its budget reporter (and its ombudsman) are aware of this fact, but rather than clarifying the issue it chose to take a swipe at Senator Reid for defending Social Security. (The payroll tax holiday put in place for 2010 is arguable an exception to this.)

If the purpose of the piece was to inform readers rather than to raise fears, it might have been useful to put the projected Social Security shortfall in some context so that readers could evaluate the size of the problem. The most recent projections from the Congressional Budget Office put the shortfall over the program's 75-year planning period at 0.58 percent of GDP (exhibit 5). This is just over one-third of the increase in the size of the annual defense budget since the pre-September 11th period.

Alternatively, the Post could have told readers that the projected shortfall is approximately equal to one-tenth the size of the upward redistribution from the bottom 99 percent to the top 1 percent over the last three decades. These or other comparisons would have been made readers better able to assess the size and implications of Social Security's long-run problems.

There are many other problems with the article that are not worth repeating here. (Here is the original blogpost.) Clearly the ombudsman was intent on exoneration rather than a serious examination of the issues raised by the piece and its critics.

However what is perhaps most disturbing is how the ombudsman seeks to settle the issue. He tells readers:

"I spent a couple of days last week talking to Social Security experts across the ideological spectrum. Some, mainly those on the left, didn’t like the story, while those on the right did. But some in the middle, like Jonathan Cowan of the Third Way, declared it realistic and on point."

It is not clear what standing Jonathan Cowan (an English major at Dartmouth college) has to settle this issue other than fitting the Post's definition of being in the middle. One need not have a PhD in a policy field to take part in public debate, but being in the middle of the political spectrum (by the Post's standards) does not make one an expert on an issue.

And in fact, there are many situations where the truth most definitely does not lie in the middle (e.g. the Civil War). The Post's ombudsman has substituted finding the middle ground for finding the truth. This might be the way the Post conducts itself, but it is not the way a serious newspaper carries through its business.

Comments (10)Add Comment
You missed something
written by Drew Kime, November 05, 2011 3:40
Some experts "liked" the story. Some experts "didn't like" the story.

That's nice. So did any experts offer any evidence or pointers to legislation to demonstrate whether the story was true or not?
Goldilocks America: Stuck in the Middle With You, Low-rated comment [Show]
Simplified
written by PeakVT, November 05, 2011 8:06
Here's a simple example for any Test Prep Daily ombudpersons reading: If one side says the world is round, and the other says it's flat, finding somebody who says the world is a cube doesn't mean you've identified the truth.
Shape of the earth, opinions differ
written by lambert strether, November 05, 2011 10:50
Gee, Warren Buffet owns a big chuck of Kaplan Test Prep News. I'm sure he's shocked by Pexton's toe-curlingly noxious apologia, and will shake up the masthead. Not.

* * *

Where the heck goes izzato get the idea that WaPo is liberal? From the good work they did on the Lewinsky Matter in the 90s? Cheerleading for Iraq? Sheer tribalism. That's the stupidity.
"Third Way" fallacy
written by Michael, November 05, 2011 11:37
The idea that Third Way - a "centrist" organization (quotations mandatory) that uncannily adopts right-leaning economic policy at every opportunity and has repeatedly called for benefit cuts to SS - qualifies as "the middle" to Pexton is all the proof one needs that the WaPo has abandoned the journalism business and has focused on advocacy.

Weaselly, dishonest advocacy.
WAPO
written by VikingRN, November 05, 2011 3:29
Illustrates the Washington punditocracy at its worst. George Will is a serial disinformer. (from the historical history of the Democratic Party to global warming.)

If the post editorial board was honest they would put SS in context with 401 system. The trust fund has lost no value while the private dc pensions have lost 30% in value.
Jon Cowan
written by VikingRN, November 05, 2011 3:33
has ties to Pete Peterson. That in and of itself places his commentary as suspect.
...
written by Robert Waldmann, November 05, 2011 9:46
I agree that the most disturbing fact is the last fact you note. Arguments made by people on the left and people on the right aren't counted at all. The conclusions of those arguments are not surprising and the ombudsman does not think it is necessary to pay any attention to facts and logic.

the key point is that the article balances on some fulcrum and not that it contains numerous false claims of fact. The news pages of an alleged newspaper are evaluated on strictly ideological grounds -- for balance not accuracy.

With this approach, they might as well stop killing trees. However, for what it's worth (nothing) the center can be defined in many ways. For example consider the opinion of the median citizen. This would fit the view which the Ombudsman considers far left (fringe left even) since the vast majority of US citizens oppose any cuts to social security benefits and any increase to revenues other than higher taxes on the rich.

It seems that the center is defined as people whose positions on different issues are, on average centrist. So the views on war of ultrahawks like Lieberman are centrist, because Lieberman votes with Democrats on many issues. Similarly, the views on social security of the social security hating third way are centrist because they don't agree with the Republicans on everything (and claim to be centrist).

The above paragraph is much more moderate than my beliefs. I don't have any evidence but I believe that Pexton defines a "centrist" as someone who agrees with Pexton. This would mean that his approach is to decide that a news analysis article is fine so long as it supports his prejudices. If I am write, no one could be further from being a journalist than Pexton.

I stress again that I have no evidence and admit that I have no doubt either.
...
written by Marcel, November 06, 2011 9:46
"(The payroll tax holiday put in place for 2010 is arguably an exception to this.)" ??? The payroll tax reduction certainly contributes to the deficit, but it isn't a contribution of Social Security to the deficit. Stimulus payments to workers from the general government fund (in the form of a rebate on payroll taxes) went up, and so did the non-Social-Security deficit. The payroll tax mechanism is just being used as a vehicle for the rebate. Cash payments to the trust funds are exactly what they would have been without the rebate.
...
written by eric, November 08, 2011 6:07
Jon Cowan has been advocating cutting and privatizing social security for over 15 years, according to wikipedia. To think of him as a moderate in this debate is absurd--like writing a piece about invading iraq and going for a "moderate" view to a guy who for decades had been advocating invasion and occupation.

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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