Closing the Whopper Gap

Barack Obama in Colorado last week.
Barack Obama in Colorado last week. (By John Moore -- Getty Images)
  Enlarge Photo    
By Ruth Marcus
Monday, September 22, 2008

The symmetry of sin is suddenly looking more equal. Last week, I flayed John McCain for dishonesty -- flagrant and repeated dishonesty -- about Barack Obama's proposals. Obama was by no means blameless, I argued, but his lapses were nowhere near as egregious as his opponent's. I stand by everything I wrote.

But a series of new Obama attacks requires a rebalancing of the scales: Obama has descended to similarly scurrilous tactics on the stump and on the air. On immigration, Obama is running a Spanish-language ad that unfairly lumps McCain together with Rush Limbaugh -- and quotes Limbaugh out of context. On health care, Obama misleadingly accuses McCain of wanting to impose a $3.6 trillion tax hike on employer-provided insurance.

Obama has been furthest out of line, however, on Social Security, stooping to the kind of scare tactics he once derided.

"If my opponent had his way, the millions of Floridians who rely on it would have had their Social Security tied up in the stock market this week," Obama said Saturday as he campaigned in that retiree-heavy state. "Millions of families would've been scrambling to figure out how to give their mothers and fathers, their grandmothers and grandfathers, the secure retirement that every American deserves."

This is simply false -- even leaving aside the incendiary language about "privatizing" Social Security. As the invaluable noted, the private account plan suggested by President Bush and backed by McCain would not have applied to anyone born before 1950. It would not have changed benefits by a single penny for current retirees like the nice Florida folks that Obama was trying to rile up. The sensible notion was that workers at or near retirement age should be able to rely on promised benefits and should not be subject to the vicissitudes of short-term market fluctuations.

There is a fair argument to be had about the wisdom of having workers invest part of their Social Security taxes in private accounts. This year's plunge buttresses the contention that such accounts are too risky to comprise even part of what was conceived, after all, to serve as a safety net.

But Obama's cartoon version of private accounts is not what Bush suggested, and it certainly is not something being peddled by McCain now. Under Bush's plan, workers would have been able to invest less than a third of their Social Security taxes in private accounts. Unless they specifically chose a riskier course, workers, beginning at age 47, would have had their investments put in "life-cycle portfolios" that shifted from high-growth funds to more secure bonds as retirement approached.

Obama's ads on Social Security are equally misleading. "Cutting benefits in half, risking Social Security on the stock market," it warns. "The Bush-McCain privatization plan. Can you really afford more of the same?"

Cutting benefits in half? As FactCheck notes, "this is a rank misrepresentation." No one at or near retirement age would have been affected. Those retiring in the future would not have received benefits as big as what they have been promised under current law -- but those promises cannot be paid for under the current system or even through the payroll tax increase on the wealthy that Obama has proposed.

The Bush plan would have limited benefits for some workers to growing at the rate of inflation rather than at the generally faster pace of wages. In other words, these workers would be getting benefits equal in real dollar value to those received by current retirees. But under the "progressive price indexing" approach endorsed by the president, lower-income workers would continue to receive all their promised benefits; medium-income workers would have their benefits reduced somewhat; and high-income workers would take the biggest hit.

The Obama campaign stretches the truth beyond recognition when it says that this would cut benefits in half. Under progressive price indexing, the average-earning worker would see a 28 percent cut in promised benefits -- in 2075. In other words, trims of that magnitude would affect workers not yet born. Today's average-earning 25-year-old would experience much smaller reductions in promised benefits upon reaching retirement age -- more like 16 percent.

And the only way the Obama campaign can inflate the supposed benefit cut to "half" is by assuming that the change in calculating benefit growth would be applied to all workers, not just the top tier. In that case, workers not yet born would get 49 percent of the benefits not yet promised to them by 2075. Doubt these numbers? They come from Jason Furman, now the Obama campaign's chief economic adviser.

To Democrats who worry about whether their nominee is willing to do whatever it takes to win: You can calm down.

Read more from Ruth Marcus at's new opinion blog, PostPartisan.

© 2008 The Washington Post Company