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Dean Baker

Dean Baker is co-director of the Center for Economic and Policy Research

June 1st, 2011 9:23 AM

The Beatification of Senator Simpson

Former Wyoming Senator Alan Simpson has been a holy terror ever since he was appointed by President Obama to co-chair his deficit commission last year. With equal fervor he has attacked both his opponents and the basic facts surrounding the budget in general and Social Security in particular.

Ordinarily, either his rudeness or his lack of understanding of the facts on the issues where he is supposed to be an expert would be sufficient to have him exiled from the public limelight. Yet, because his views coincide with the editorial positions at elite news outlets like the Washington Post, his credibility as a spokesperson on the budget and Social Security is never tarnished.

The bill of particulars against Senator Simpson is getting quite lengthy at this point. In the rudeness category, Mr. Simpson sent a late-night e-mail to the head of a major national women's organization implying that she was too dumb to read a simple graph. More recently he directed an obscene gesture towards the AARP. This goes along with numerous insults directed against reporters in interviews and a tirade about Snoopy Snoopy Poop Dog.

One can debate how seriously these actions should be viewed. But the contrast with Van Jones, an advisor on environmental issues to President Obama, is striking. Most Washington insider types felt that Jones had to be quickly sent packing after a single off-color remark about Republicans was made public.

Senator Simpson has been at least as aggressive in assaulting the facts on the budget in general and especially Social Security. In numerous statements to reporters and his late night e-mails he has suggested that the baby boomers were a surprise that is just now coming to the attention of policymakers.

Of course we've known about the tens of millions of people born between 1946 and 1964 for quite some time. We had to build schools for them. It was hardly a surprise that these people would at some point turn 62 and become eligible for Social Security benefits. In fact, the actuaries at Social Security have long had a very good idea of when the baby boomers would be reaching retirement and how many would make it.

Senator Simpson also seems to think that the increase in life expectancies has caught policymakers by surprise. In fact, Social Security actuaries have long known that life expectancies have been increasing and they projected this trend to continue. They have not been too far from the mark in their projections, being somewhat overly optimistic about the gains for women and too pessimistic about the increase in life expectancy for men.

By contrast, Senator Simpson has repeatedly told stories about how when the program was first set up there were 16 workers for every retiree and life expectancy was just 63. Both these points are completely irrelevant to the finances of the program today. The decrease in the ratio of workers to retirees has been going on for many decades (it had dropped to 5 to 1 by 1960) and the program has been restructured accordingly.

Furthermore, the statistic on life expectancy cited by Senator Simpson has little to do with the finances of the program. This is a measure of life expectancy at birth. Most of the gains in life expectancy at birth have been due to a drop in the infant mortality rate. This means more people live to be supported in retirement, but it also means more babies survive to have a full working lifetime during which they contribute to the program.

More importantly, none of the items that are touted as revelations by Senator Simpson are news to anyone who has been involved in the policy debate over Social Security for the last four decades. The increases in life expectancy and declines in the ratio of workers to retirees that are so alarming to Mr. Simpson have been factored into the projections that show that the program can pay all scheduled benefits through the year 2036 with no changes and nearly 80 percent after that.

These projections show that even if Congress never made any changes to the program Social Security will always be able to pay a higher benefit (adjusted for inflation) than what the average retiree is getting today. There is simply no support in the Trustees projections or anyone where else for Simpson's picture of Social Security that is teetering on the edge of collapse.

The question that the public should be asking the pundits and press is how often does Senator Simpson have to be wrong, and how far from the mark does he have to go, before he loses credibility? The elite media might have a strong commitment to politicians who espouse views that it supports, but continuing to treat Senator Simpson as an expert on the budget and Social Security is a case of affirmative action gone wild.

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