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Michele Bachmann’s deceptions on Social Security

The DFL put out a memo Monday reviewing Michele Bachmann’s past support for Social Security privatization.

The DFL put out a memo Monday reviewing Michele Bachmann’s past support for Social Security privatization. As I mentioned in a recent post, I had a goodly bit of experience with Bachmann in 2006-07, during her transition from legislator to U.S. Rep. and gained some insights into both her Social Security position and her problems being straightforward about it, which I’ll describe but first two politically incorrect observations.

1. Playing the Social Security privatization card has become a standard Dem scare tactic, and it seems fairly outlandish in the current moment. As Bush leaves office and the congressional Repubs worry about facing a 60-40 Dem majority in both houses of Congress, Social Security privatization will not be given serious consideration any time soon.

2. I don’t favor the Bush plan for privatizing Social Security, but it’s not as bad an idea as the typical demonization of it suggests. It’s true (as Al Franken has suggested in several recent talks and debates) that if that if Social Security had been a system of private accounts over the past 40 years or so, a lot of people would have just taken a 20 or 30 percent hit in their retirement nest eggs. But if they had been steadily investing some of their FICA contributions into an S&P index fund for the past 40 years, most people would be in pretty good shape, even with the recent unpleasantness in the stock market. The main problem with partial privatization is that you can’t get there from here without borrowing trillions more dollars to keep the system going during the transition. I do think those who trash the idea should put forward their own ideas for addressing the long-term solvency issues. (And Franken did embrace one of those ideas in the last debate.)

But back to Bachmann. When I started covering her 2006 race for Congress I knew she was ultra-conservative, but I had the impression she was refreshingly straightforward about it. I found out otherwise on the latter impression.

Bachmann and the ‘Fair Tax’
Take, for example, Bachmann’s enthusiasm for the so-called “Fair Tax.” Rep. Bachmann seems to think tax is a four-letter word. She favors cutting all of them except for those she favors eliminating. She says the federal tax system is “totally broken” and in need of a “complete overhaul.” She speaks enthusiastically of the so-called “fair tax” idea.

This radical proposal would scrap the IRS and replace the entire tax code with a national sales tax (some say it would have to be 27 percent, some say more like 30) on pretty much everything (cars, houses, the works). In fairness to the fair tax, the proposal includes a so-called “prebate” provision that would give every household a monthly payment big enough so that families living at the poverty line would get all their tax money refunded.

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Fair tax proponents (I’m not one, but I’m open-minded enough to enjoy such radical proposals) say this last bit saves it from being regressive (which is the first big objection of fair tax critics). Anyway, I’ve heard Bachmann wax poetic about how great this would be, so I write that she “favors” the idea. She calls to complain, and ask for a correction. Says she thinks the flat tax is an idea “worthy of debate.” But she isn’t quite “for” it. My notes aren’t clear about whether she used the word “for” so I write a clarification (smuggled into a hard-hitting fact-check of one of her opponents misleading attacks on her. (Although I seriously question whether I mischaracterized Bachmann’s position on the “Fair Tax,” I can’t prove I’m right and I’m trying very hard to be fair to her in my coverage of this race.)

Then I locate an op-ed, signed by Bachmann and a co-author, advocating the fair tax approach for Minnesota, to replace the state income tax. What, your humble ink-stained wretch inquires of the candidate, is up with that? Bachmann says she was working on the piece with the co-author but never authorized its submission and it ran without her approval. You getting the idea? I no longer believe I am dealing with a straightforward person and start taping the interviews whenever possible.

OK, on partial privatization of Social Security (I always make a point of saying “partial,” which Bush’s proposal was. I try very hard to be fair to this idea, which I do not favor but consider “worthy of debate.”) On this one, Bachmann was clear as a bell. She explicitly embraced the Bush plan, which would have given younger workers an option to invest a portion of their FICA taxes through a personal investment account in exchange for accepting a reduced benefit from the conventional Social Security formula. (And frankly, whether you hate it or not, that’s how it should be described, although the long version of the argument gets much more complicated.)

The AARP (the powerful lobby for Americans over 50) hates privatization, partial, voluntary or otherwise. It’s the life or death issue when seeking their endorsement. They ask all candidates seeking endorsement to fill out a questionnaire asking whether the candidate favors “using Social Security taxes for private accounts.” This is exactly what Bachmann does favor. But she leaves the question blank (through the miracle of the web, you can still see it here) and then writes, lower on the form: “Social Security must be protected. At the same time, I believe Social Security must be strengthened so that it remains able to pay retirement benefits for years to come.… Whatever reforms we adopt, we must find a way to strengthen and protect Social Security without raising payroll taxes, without reducing benefits, without raising the retirement age and without privatizing the system.”

Half-truths and deceptions
In those days, I argued that journalists should be very reluctant to use the word “lie” to describe half-truths, deceptions and other prevarications by politicians, and I managed to write about this without using those words. I was aware that several politicians who favored the idea long known as “privatization” (or partial privatization) of Social Security had decided to abandon that word in favor of words like “private accounts” or even “individual investment accounts.”

(Norm Coleman, by the way, has also attempted this dodge during his 2002 Senate race. He aired an ad asserting that “I don’t support privatizing Social Security and I’ll fight against anybody who would do that.” He actually favored, and still favors, the idea that has, for decades, been called Social Security privatization. His denial was based on his argument that “privatization” was not a proper word choice.)

Anyway, back then, when Bachmann would still take my questions, I asked her how she could square her clear position in favor of the idea that had been for decades called Social Security privatization with her responses to the AARP questionnaire. (AARP, you may have noticed, was also aware of the dodge and didn’t ask whether people favored privatization, but whether they favored “private accounts,” which should have robbed Bachmann of even the Coleman dodge.)

In response to my questions, Bachmann ran a merry race. She said that for younger workers “we should look at the idea of who will own our retirement.” She said that “the idea of allowing young people to invest their own funds is something worth debating.” And “we need to look at those options” but “that’s not privatization.” If the AARP (and other groups, like the Cato Institute Project on Social Security Privatization, that actually favored the idea) choose to call the idea privatization, “that’s their problem.”

My interviews with Bachmann were at this point no longer as polite as they had once been. As far as I can tell from reviewing my old Strib blog, this may have been the last time she actually took one of my calls. I accused her of giving me the run-around. I asked her: “Without use of the word ‘privatization,’ do you support allowing younger workers the option of using a portion of their FICA contributions to invest in stocks and bonds?”

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She replied: “To invest. Put the period after invest.”

I asked her what investment she might have in mind other than stocks and bonds. But she had to go.