Martha McSally “wants to raise the retirement age. And McSally supported a plan that the AARP says privatizes Social Security in the stock market. Martha McSally: She’s really not for you.”
– voiceover of new House Majority PAC ad attacking GOP congressional candidate Martha McSally of Arizona.
This ad by House Majority PAC, which supports Democrats, is designed to rebut an attack ad recently launched against Rep. Ron Barber (D-Ariz.) by a group affiliated with the conservative Koch brothers. The race between Martha McSally and Barber is expected to be very close, as Barber in 2012 only bested then political novice by a razor-thin margin.
For the purposes of this fact check, we are going to focus on the allegations concerning McSally’s “plan” for Social Security, which obviously is of concern to the many retirees who live in Arizona. It is no accident that the ad mentions the AARP, the venerable and powerful advocacy group for retirees.
For evidence of McSally’s position on Social Security, the ad cites a news article that appeared in the Arizona Daily Star on March 25, 2012. But the AARP reference depends on a policy document from seven years earlier— October 2005. The AARP never evaluated a particular plan by McSally.
Indeed, the Arizona Daily Star comment by McSally –which is part of one of those questionnaires that candidates answer — is so vague as to be almost opaque:
“We must keep the promises we’ve made to seniors and veterans. But a decade of irresponsible spending has left us some tough choices. We need to look at gradually increasing the retirement age for younger workers and giving individuals more options to invest part of their benefits for higher returns.”
First of all, she makes clear that for older workers, nothing would change. She does mention raising the retirement age for younger workers — something that even AARP had indicated it might support as part of a budget deal — but what does “invest part of their benefits for higher returns” mean? We consulted with an expert on Social Security who said it could refer to any one of different proposals, including one for add-on accounts proposed by Al Gore in the 2000 campaign.
We found two other references to Social Security by McSally, which only added to the mystery of her position.
In another questionnaire that appeared in the Green Valley News on April 4, 2012, she stated:
“We have to keep the promises we’ve made to our seniors and protect the retirement benefits they’ve earned. At the same time, we have take measures to strengthen and sustain it for future generations because it is currently unsustainable. For younger workers, we need to consider approaches such as gradually increasing the retirement age and allowing them to invest a portion of their Social Security payments in ways that will allow them to maximize their returns.”
In a debate in Green Valley on April 12, 2012, McSally said:
“As we look at options to protect and secure Social Security and Medicare for the future, we need to protect the promises we have made to seniors that are at or near retirement. We need to be innovative about ways to sustain those programs for the future, because otherwise they will go bankrupt and they will Pac Man out the rest of the budget. So how do we do that? Some innovation and ideas are on the table, which are worth looking at, for people to keep some money in their pockets when it comes to Social Security.”
Note that all of these comments are from the 2012 race. It’s unclear what her actual position is, given that at one point she refers to investing “benefits” and at another point refers to investing “payments,” which could refer to existing payroll taxes, but also to an add-on contribution, or Social Security trust fund assets. And “keep some money in their pockets” is even vaguer — it could mean something as general as dealing with the rising cost of Social Security, as the baby boom generation retires, so that taxpayers don’t get hit with higher general tax burdens.
McSally has come under fire in the local media for being vague on policy proposals during her current run, but one of her aides said her position on Social Security has not evolved since 2012.
“Martha’s position has not changed. She has not and does not support privatizing Social Security, and the idea that she does was and is a deliberate and blatant attempt by [House Democratic Leader] Nancy Pelosi to distort Martha’s position and scare voting seniors,” said Kristen Douglas, deputy campaign manager, in a statement. “Martha has consistently stated on the record that she is fully committed to ensuring promises made to seniors are kept.”
During the 2012 campaign, House Majority PAC hit McSally hard on the Social Security issue, with one portraying the former Air Force pilot as having a bad “recipe” for Social Security. With such a close race, it’s possible these ads made a difference. This new ad is essentially a reprise of that line of attack, as shown in two ads below, which McSally at the time decried as false. One television station stopped running the House majority PAC ads after McSally’s campaign said she has “never supported privatization of Social Security.”
For the sake of argument, let’s assume McSally advocates a concept similar to what Sen. John McCain (who is an Arizona Republican) once supported in 2005—when it was proposed by then President George W. Bush. That plan would have been voluntary, for workers younger than 55, and would have permitted a diversion no more than a third of payroll taxes into investments other than Treasury bonds (which Social Security is now invested in). The system would still be government-managed; it would not be “in the stock market” or “privatized.”
The House Majority PAC cites AARP because the advocacy group labels the private-account concept as “privatization.” But the AARP document referenced by the ad actually does not say Social Security would be put in the stock market, as the ad claims.
The AARP report mainly tries to assess whether private accounts would yield better returns for workers and concludes that claims that many workers can expect better returns is an overstatement. “There is a fairly substantial probability that some cohorts of retirees would be worse off under a privatized Social Security system than they are under the current system,” the report says. That’s basically Stock Market 101: The performance of private accounts depends on the investments that are chosen. As we said, the Bush plan was voluntary, meaning workers could avoid the stock market entirely if they desired.
“Privatization,” incidentally, is one of those pejorative political labels used by opponents, akin to the bogus Republican claim that the Affordable Care Act is a “government takeover” of health care. Just as the health-care law preserves the private health-care system, private accounts in Social Security would have been established as part of the current system.
During the 2008 presidential campaign, both The Fact Checker and FactCheck.org were highly critical of the Obama campaign for asserting that McCain supported a plan that would put Social Security in the stock market. FactCheck.org said the claim was “deceptive” and The Fact Checker (then written by Michael Dobbs) said it was worthy of Three Pinocchios.
Yet here it is, six years later, and Democrats are still using the same old playbook of scaring seniors. Polling must show that such false attacks work.
Andy Stone, a spokesman for House Majority PAC, defended the ad. “McSally has repeatedly expressed support for the idea of privatization, in multiple different ways and in many different venues,” he said. “They [the AARP] call the McSally plan privatization, which is what the ad claims.”
Stone also pointed to an Associated Press fact check from 2008, which assessed political spin by both sides on Social Security and declared that the terms “privatization” and “personal accounts” means “the same thing.” The same fact check said of Democrats: “They speak darkly and flatly of Republicans plunging Social Security into privatization, subjecting the venerable system to the mercies of the market, and they ignore the voluntary and partial nature of the proposal.”
The Pinocchio Test
McSally certainly could be more specific about her proposal. She has spoken of improving the solvency of Social Security by raising the retirement age, but only for younger workers, presumably in exchange for different investment options that she has only vaguely described. (Note: The private-account plan advanced by Bush would have require a massive bridge loan to finance the transition and at least initially would have done little to address solvency. See The Fact Checker’s popular Guide to Social Security for more information.)
But, in the meantime, her position on private accounts is virtually irrelevant to the voters of her congressional district. Even if she is supporting a private-account plan similar to Bush’s proposal, that’s a dead letter.
The concept has absolutely no chance if a Democrat is in the White House. Bush could not even get a committee vote on his idea when Republicans controlled both houses of Congress; Peter Baker’s magisterial history of the Bush administration, “Days of Fire,” makes it clear that the Republican Speaker of the House killed Bush’s proposal. Even the most recent GOP presidential nominee, Mitt Romney, backed away from the idea in 2012, saying the 2008 stock market collapse showed “we can’t always count on positive returns from these investments.” He instead supported private accounts as an add-on to Social Security, similar to the Gore concept of “Social Security Plus.”
The bottom line: This ad has rather flimsy evidence to justify the use of such politically-charged code words (“privatizes Social Security in the stock market”). We might have given this ad Four Pinocchios if we had a better sense of McSally’s policy proposals, but in any case it’s time for Democrats to stop playing this particular scare-seniors card.
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