Wisconsin Senior Scare

A Wisconsin Democrat’s ad falsely accuses his opponent of proposing to cut Social Security benefits for two-thirds of seniors. Actually, benefits would go up for the poorest one-third of current beneficiaries, and would be unchanged for most others.

Tom Nelson, who’s running for an open seat in Wisconsin’s 8th Congressional District, started running the ad in Green Bay Sept. 1. It says Mike Gallagher, the Republican candidate, “supports a plan to reduce all Social Security benefits to the poverty line,” and that this “would cut Social Security benefits for two-thirds of seniors.” On screen appear several worried people, including some who seem to be of retirement age.

We find the ad false because it leaves the impression that current beneficiaries would see benefits go down to “the poverty line,” which is far from true. That incorrect claim is stated even more strongly in a Nelson news release announcing the ad. It says of Gallagher, “his plan would cut Social Security benefits by nearly $ 5,000 a year – or about 30% per year.”

But in reality, the seniors shown in this ad would have little to worry about. At worst, the highest-income beneficiaries would see slightly smaller cost-of-living increases in future years.

In the ad, Gallagher is heard discussing a proposal by Andrew Biggs, a Republican Social Security expert who proposes to increase benefit levels for seniors whose benefits fall below the poverty line, while gradually phasing in — over 40 years or so — a reduction in benefit levels for higher-income beneficiaries.

Eventually, that would provide the same flat benefit for all and restore the financially unstable program to long-term solvency. Biggs figures it would reduce the percentage of those over 65 living in poverty to near zero, from the current level of about 10 percent.

It indeed calls for benefits lower than current law provides for the highest earning two-thirds of future beneficiaries, many currently in their 20s and 30s. But the effect on today’s seniors would be gradual, or nonexistent.

Note that the ad takes liberties even when it calls the proposal “Mike Gallagher’s plan.” Gallagher hasn’t endorsed every detail of the Biggs proposal. Rather, he said of Biggs in a recent conservative forum, “I think [he] has the right answer.”

The Republican candidate’s official position, stated on his website, is couched only in generalities. Gallagher says that he will “oppose efforts to privatize the system” and “push Congress to stop ignoring this critical issue [of looming insolvency] before it’s too late.”

The issue Gallagher vows to address is that current payroll tax levels aren’t sufficient to pay all the benefits promised in current law. The system’s trustees warned once again, in their most recent report, that the reserves built up in the two Social Security trust funds will be exhausted in the not-too-distant future. That is projected to happen in 2034, when benefits would need to be cut 21 percent, or taxes on workers increased by nearly 3.6 percent of payrolls.

To prevent that, the Biggs plan calls for phasing in a single, flat-dollar benefit pegged to the poverty threshold for single people over age 65, which is currently about $ 950 per month.

Biggs would also cut payroll taxes immediately, by excusing all workers from paying Social Security taxes at age 62. That’s an added benefit to seniors not mentioned in Nelson’s 30-second attack ad.

Biggs has written that his plan would phase in over decades, by granting higher annual cost-of-living adjustments to those whose benefits are currently below the $ 950 level, and by giving lower increases to the highest-income beneficiaries, those with monthly benefits over $ 1,350. Those in between would continue to get the same COLA increases provided by current law. His proposed COLA changes “benefit more people than they hurt,” Biggs told us when we contacted him.

The average monthly benefit is currently $ 1,237, well below the level at which a lower COLA would apply.

To compensate higher-income workers for the reduction in their future government benefits, Biggs would encourage more private savings through tax-advantaged 401(k) retirement plans. For example, he would require employers to automatically enroll all eligible workers (who could still opt out) in such plans, and would reduce regulatory and legal costs for small businesses to encourage more of them to offer such plans to their workers.

It’s a common tactic on both sides to use misleading ads that try to scare seniors into thinking the other party would cut their benefits. We’ve seen similar attacks in every election since our founding in 2003, and we doubt this Wisconsin ad will be the last of 2016.

But as this latest example should confirm, such 30-second attack ads are a poor source of accurate information.

FactCheck.org

Leave a Reply

Your email address will not be published. Required fields are marked *