March 14, 2014, 9:21 a.m.
Abby Huntsman is really, really upset about Social Security. We know this because the television presenter, a daughter of former GOP Presidential contender Jon Huntsman, went on an extended rant about it Thursday on MSNBC's "The Cycle." The show is aimed at a younger audience of news consumers and Huntsman, 27, is one of the four youthful co-hosts.
She thinks Social Security is going bankrupt, leaving her and her generation with nothing. "This is infuriating," she said, bouncing up and down in her chair like a petulant toddler, "because none of our elected officials seem to care enough to do anything about it."
Unfortunately, almost everything she said about Social Security in the name of making it "sustainable" for her generation was wrong.
Huntsman wants to tell it like it is, but she fails due to lack of information. And if her generation believes what she said, it's going to be in deep trouble.
A lot of her spiel resembles the rants issuing from the mouth of former GOP Sen. Alan Simpson, 82, a veteran font of Social Social Security misinformation--which shows, one supposes, that error and ignorance is no respecter of age. Most of it has been debunked so thoroughly and repeatedly that one is tempted to believe that the misrepresentations are deliberate.
But as a favor to Huntsman and her generation, we'll set her straight. Again.
The core of Huntsman's plaint is that life expectancies in the U.S. have risen so sharply since 1935, when Social Security was enacted, that its current financial structure can't handle the change. Her figures are that average life expectancies for men have risen from 58 in 1935 to 76 in 2014, and for women from 62 to 80 in the same period.
"While we're living about two decades longer, we haven't made any real change," she said.
Huntsman makes the familiar error of confusing life expectancies from birth with the figures that actually matter to Social Security--life expectancies from age 65, when retirements have traditionally begun. (Under the law, the normal retirement age is rising; it will be 67 when Huntsman retires.)
Life expectancies from birth have indeed risen as she says, though the latest statistics available are from 2009, not 2014. But the difference there is almost entirely due to improvements in infant mortality since 1935. The change in life expectancies from age 65 is much lower--in 1935, a 65-year-old male was expected to live, on average, to about 77 and a female to about 78. In 2009 the figures were about 83 for males and 85 for females. That's an extension of six to seven years, not two decades.
And as economist Dean Baker observes, Social Security's fiscal structure accommodates that--the payroll tax has increased from 2% (shared between employer and employee) at its inception to 12.4% today. That additional revenue covers not only the great expansion of the program's benefits over the decades but also America's changing demographics. However, to exaggerate those demographics, Ms. Huntsman, is to do a serious disservice to your audience.
One other thing: life expectancies are very sensitive to social and economic status. Average life expectancies from age 65 for black males, for instance, have increased by less than five years since 1935. If you raise the normal retirement age to 75, as Huntsman advocates, you are condemning some of these workers to barely any retirement at all.
"Here's the reality," Huntsman declares (to Social Security advocates, this is usually a sign that a real bloomer is on its way, and she doesn't disappoint): "At the rate we are spending, the system will be bankrupt by the time you and I are actually eligible to get these benefits.... Would you rather have 80% of what you have today, or nothing at all?"
She concludes: "We might disagree about the prescription for the ailing patient, but doing nothing about it--that will lead to none for all, rather than at least some for us."
Where Huntsman got this idea is a mystery, because no one who understands the program--from progressive supporters of Social Security to its conservative critics--says anything like that.
The most dire projections of the program's future say that "doing nothing about it"--no benefit cuts, no tax increases--will leave the program still able to pay 75%-80% of scheduled benefits. Not "nothing at all." And that 75% to 80% would still be much more per month 75 years from now than retirees get today.
By the way, it's also untrue that President Obama's budget plan makes "no mention of entitlement reform. None," as Huntsman claims. His budget proposes a very damaging cutback in Social Security disability, as we documented here, as well as changes to Medicare payment formulas to save money.
Huntsman has stitched her spiel together out of scraps and tatters of misinformation, of a sort we've heard from the older generation for years. They're no more accurate coming out the mouths of a "millennial." But it's tragic to see that what she's learned from her elders is how to mislead her public.
Watch Huntsman's appearance here: