By Terry M. Neal
washingtonpost.com Staff Writer
Monday, May 16, 2005
7:18 AM
Black folks don't appear to be buying into President Bush's argument about the benefits of allowing workers to invest a portion of their Social Security in private accounts in exchange for a reduction in future benefits from the government.
About 75 percent of respondents in a recent poll of African Americans by Democratic pollster brilliant corners Research & Strategies said they generally oppose Bush's plan. (In comparison, a Washington Post/ABC-News national poll of all racial demographic groups in mid-April found 64 percent of respondents disapproved of the way Bush was handling Social Security.)
The poor poll numbers should not be taken as a reflection of Bush's lack of trying to push Social Security private accounts with African Americans, a constituency that disproportionately depends on the government program.
"African-American males die sooner than other males do, which means the system is inherently unfair to a certain group of people, and that needs to be fixed," Bush said at a forum in January.
Similarly, Republican National Committee Chairman Ken Mehlman has made pitching the concept of private accounts to black voters a top priority in recent months. Tara Wall, an RNC spokeswoman on issues of black outreach, said Mehlman has mentioned the benefits of private accounts in every outreach event he's done lately.
"If we want to close the gap between minorities and non-minorities in access to capital, in the ability to build wealth, in the ability to have a piece of the American dream, the only way to do it is a personal retirement account, because that's the only way for folks who live paycheck to paycheck to be able to build a nest egg for themselves or for the future," Mehlman said in a recent speech at historically black Howard University in Washington.
Republican National Committee officials downplayed the brilliant corners poll, noting that it was done for a group called "Americans United to Protect Social Security," which they described in a news release as a "liberal, fringe organization [whose] sole goal is to oppose Republican efforts to fix Social Security, and [which] is funded by millionaire elitists and unions."
AUPSS officials said the group is registered as an IRS 501c3, meaning it must be nonpartisan. A spokeswoman for the group, Cara Morris, acknowledged that some labor unions were active in the group, but said a broad coalition of "grass roots" activists were also involved. She refused to divulge the group's major funders. As an issue-advocacy group, it is allowed to advocate against Bush's Social Security plan
Republicans were happy to see their support among blacks creeping up, albeit incrementally, in the last presidential election. Bush increased his percentage of the black vote nationally from about 9 to 11 percent, and saw more significant increases in a few battleground states, such as Ohio and Florida.
The White House has made the calculation that it can broaden its appeal to minority voters, in part, by doing a better job of explaining why and how its policies benefit African Americans. Its Social Security argument is built on the premises that blacks die younger on average than whites (five or six years, depending on gender) and that blacks, who have built up less savings than whites, depend more on Social Security in retirement.
Thus, blacks would benefit disproportionately by being able to invest a portion of their retirement in private accounts, which almost assuredly would bear a greater return in the long haul, and can be passed along to heirs upon death.
Alphonso Jackson, a black, long-time adviser and friend of the president's, laid out the case in a recent Wall Street Journal op-ed: "While approximately 20 percent of white Americans depend entirely on Social Security for their retirement income, the figure doubles for blacks. . . . But blacks receive far less in return for their Social Security contributions. One in three will get no benefit at all because he will die before he is eligible to collect benefits. After a lifetime of paying into Social Security, nearly 30 percent of black seniors are left in poverty, compared to 7 percent of white seniors. And while the average black male lives to age 67.8 -- after collecting less than one year of Social Security -- the average white male will collect seven years of benefits. In effect, black workers are subsidizing the retirement of whites. The inevitable results of not reforming Social Security -- raising payroll taxes or reducing benefits -- would only worsen the situation for blacks."
The Flipside
Opponents of private accounts say such arguments ignore or gloss over other facts, among them the redistributive effect of Social Security. In other words, Social Security replaces a higher percentage of lower wages, and a smaller percentage of higher wages. Because African Americans make on average less than whites, they benefit disproportionately under the current system.
Jason Furman, a New York University economist and senior fellow at the left-leaning Center for Budget and Policy Priorities, said in an interview: "Retirement benefits have two features. The lower your income the more generous they are, and the longer you live the more generous they are.
"Several very careful quantitative studies show that the rate of return on Social Security retirement is slightly higher for African Americans. That's because the progressivity of the retirement benefits slightly outweighs the regressivity of the life expectancy issues."
That's a policy wonk's way of saying the story is more complicated than private account advocates would have you believe. Yes, it's true that blacks die on average a few years earlier than whites. But overall, that's balanced by the fact that blacks benefit compared to whites in their rates of return on Social Security.
Furman also argues that black mortality rates are distorted by higher infant mortality and homicide rates. The disparity in life expectancy, therefore, is based in part on younger people dying at a greater rate -- younger people who have not lived long enough to contribute anything or much to Social Security in the first place. The mortality gap decreases for blacks who live until their 40s or 50s, and the remaining difference can be explained by higher rates of cancer, strokes, heart disease and other medical problems -- problems that GOP critics say are rooted in income and health disparities that Republicans historically have ignored.
But even if the mortality argument were to stand, there are other reasons for African Americans to be skeptical of private accounts, critics say.
The Republican argument is based "on a faulty premise [that] Social Security is strictly a retirement program," said Maya Rockeymoore, vice president of research and programs at the Congressional Black Caucus Foundation. Rockeymoore and others point out that Social Security is also a disability program and a survivor inheritance program, again areas where blacks benefit disproportionately.
In a widely distributed article she wrote for The Black Commentator magazine, she argues:
"Combined with the high risk associated with individual account investments, the outlook for African Americans, especially those on a low or fixed income, is dire.
"The inheritance argument is similarly misleading, Currently, Social Security provides benefits for the surviving dependents of a worker who passes away in the prime of his or her working years. Because blacks have lower life expectancies, African American widow(er)s and young surviving children have a higher reliance on these benefits when compared to whites. Indeed, Social Security Administration figures show that 48 percent of African Americans receiving survivor benefits are children.
"However, under a system of individual accounts, an African American male dying at a young age is unlikely to have enough funds accumulated in his account to offset the deep cuts in Social Security benefits that are likely to accompany these accounts. As a result, young child survivors, who are the least able to fend for themselves, are likely to face the possibility of extreme poverty"
The Politics
One of the interesting findings in the brilliant corners poll was that the already high opposition among African Americans to Bush's Social Security proposal increased as people were given more details about it. The question about whether people "generally" supported Bush's plan drew 75 percent opposition.
But when asked this way, opposition jumped to 84 percent: "Well, as you know, Bush's plan calls for allowing individuals to invest a portion of their Social Security taxes on their own in the stock market, which could mean higher benefits if the market goes up or lower benefits if the market goes down.
"It would also mean that the amount of guaranteed benefits that people receive would be cut for all Social Security recipients -- including retirees, the disabled, and the children of the deceased and disabled. Now that you have heard a little more about it, generally speaking do you favor or oppose Bush's Social Security plan?"
In the Post/ABC poll, opposition to partial privatization was 51 percent. Or, to compare numbers to another nonpartisan poll, the Pew Research Center in February found 82 percent of African Americans opposed the president's handling of Social Security. Also, 36 percent of Pew respondents said they supported private accounts, while 49 percent said they opposed them.
Either way, the percentage of African Americans opposed to Bush's plan is higher than that of the general population, suggesting that the administration has a tough hurdle to jump. This debate is important, however, because the GOP recognizes the need to expand its base in order to solidify its majority.
But for now, black voters' opposition appears based on a basic mistrust of the GOP, which they believe has historically not had their best interests at heart.
Rockeymoore put it this way: "After all, these are the people who have spent the last four years providing tax relief for the wealthiest Americans while laying the groundwork for dismantling the very programs that have helped blacks mitigate the effects of centuries of deprivation.
"Among the health and wealth creation vehicles on the President's chopping block are Affirmative Action, Perkins loans, Community Development Block Grants, empowerment and enterprise zones, Section 8 and Hope VI federal housing subsidies, minority health disparities research, and Medicaid. Each of these policies have been important for elevating the socio-economic condition of African Americans in the post-Civil Rights era, yet they have been challenged, seriously curtailed, or eliminated under the Bush Administration."
Wall and others see this as pure liberal demagoguery. Wall says not doing anything and leaving the status quo in place is akin to a benefit cut -- by as much as 30 percent in years to come -- as the proportion of retirees to people paying into the system continues to decrease. At least Bush is making an effort to address the problems in the system, according to Wall, while the Democrats sit around and just say "no."
"Yes we still have a challenge in delivering our [Social Security] message, and that's because the Democrats have done a good job of misinforming black people on this subject," she said.
Addendum
One interesting side note: Conservatives have been critical of the media for reporting opposition to Bush's Social Security plan based on overly broad poll questions that ask whether people "approve of the president's handling" of the issue. Most of those polls have shown clear majorities opposed to the president's handling of Social Security.
"The major media outlets have based most of their headlines and stories on their own polling data," wrote Herman Cain, a prominent black Georgia businessman and conservative who served as co-chairman of Steve Forbes's 2000 presidential campaign. "The skunk in the polls is that most media outlets are predetermining the results of their polls by asking the wrong questions," Cain says. "They then distort their stories to indicate that the public opposes personal retirement accounts. The question pollsters ask to determine support for personal retirement accounts rarely focuses on the accounts, but rather on the president himself and his handling of Social Security."
Cain argues that the Fox News/Opinion Dynamics poll of April 26, which asks "do you think people under age 55 should have the right to choose between keeping all of their contributions in the current system and investing a portion of their contributions?" is more appropriate to the question of support. And nearly four of five respondents in that survey (79 percent) answered "Yes, people should have the right to choose."
But in fact, other media outlets have asked specific questions. For instance an April 19 CBS poll posed this question: "Some people have suggested allowing individuals to invest portions of their Social Security taxes on their own, which might allow them to make more money for their retirement, but would involve greater risk. Do you think allowing individuals to invest a portion of their Social Security taxes on their own is a good idea or a bad idea?"
In that poll, 45 percent said it was a good idea and 49 percent a bad idea.