Republicans Blasted for 'Confusing The Public' on Social Security

By Jeff Johnson | July 7, 2008 | 8:28 PM EDT

Capitol Hill ( - A California Democrat says Republicans are playing word games when they should be working with Democrats to save Social Security.

At issue is the use of the word "privatization" to describe Republican Social Security proposals.

Congressman Robert Matsui says Republicans are planning to introduce a resolution, before the Memorial Day congressional recess, claiming that they oppose the privatization of Social Security. But he claims privatization is, in fact, the only thing that Republicans seem to universally support.

"It's unfortunate, when we have such a complex issue as Social Security - an issue that we all have to deal with - that my Republican colleagues are trying to change definitions to try to rewrite Webster's Dictionary," Matsui charged in a press conference Monday.

"They're basically taking the position that they want to confuse the American public," he added.

"The American public is entitled in a democracy to know where members of Congress, House and Senate members stand on such a vital issue that touches every American before an election, not after an election," Matsui argued.

Economist Peter Orszag, a senior fellow in economic studies with the liberal Brookings Institution, appeared with Matsui at a press conference in the office of House Minority Leader Richard Gephardt (D-Mo.), although Gephardt did not attend.

Orszag argues that no matter what terminology is used to describe investing taxpayer's Social Security funds outside of government, the proposal is a bad idea.

"Even if you could finance an individual account system," he theorized, "there's a bigger question of whether you'd want to, because individual accounts do not - sort of, in their most straight-forward form - redistribute income in a way that the Social Security system does."

But Dan Mitchell, senior fellow and economist with the Heritage Foundation, a conservative think tank, believes Orszag is missing the point of the proposal.

"You're not going to have that redistribution going on with Social Security but everybody's still going to get a [higher] rate of return of probably at least five percent," he explained. "Every single demographic group benefits from a system of individual accounts."

The semantic debate originated after an editorial decision to replace the words "work product" with the words "privatization bill" in a statement by House Ways and Means Committee Chairman Bill Thomas (R-Calif.) quoted in the April 27 edition of National Journal.

"I will be working with Clay Shaw on making his work product better, and on other approaches," Thomas told National Journal. But the publication changed the quote to read "I will be working with Clay Shaw on making his [privatization bill] better, and on other approaches."

In its May 4 edition, the magazine's editors defended their decision.

"The words 'work product' were replaced with 'privatization bill' in brackets in an attempt to clarify Thomas's quote," the editors wrote. "By putting the words in brackets, National Journal intended to signal that the word's were National Journal's, not Thomas's."

Thomas is not persuaded.

"Characterizing Rep. Shaw's bill or the Republican position as "privatization" is a demagogic falsehood," he wrote in a letter to the editor. "Worse, it is irresponsible, unethical, and dishonest journalism to reconstruct and distort a statement made by me to make it appear as though I uttered this demagogic falsehood.

"National Journal should be ashamed," Thomas concluded.

But Matsui claims Republicans are intentionally trying to distance themselves from the word, and he believes he knows why. Matsui distributed a document to reporters entitled "Hill Briefing April 25, 2002" allegedly published by the polling firm Public Opinion Strategies.

"Don't say 'privatization,'" the document's "Key Observations" section suggests. "Instead say 'personal retirement accounts.'"

Matsui believes he also knows why Republicans don't want to admit that they plan to "privatize" Social Security.

"They do have a secret plan to cut benefits. There's no question that the movement toward privatization will result in a cut in benefits for current recipients," he argued.

Thomas calls that claim a "distortion."

"I can assure you that no Republican plan privatizes Social Security," he said. "The Social Security Administration will remain intact. Seniors will still receive government checks. Americans will receive their promised benefits both today and tomorrow."

When asked about Democrats' past attempts to reframe debates by changing terminology -- such as referring to homosexuals as "gay" or to abortion as "choice" -- Matsui seemed to change the thrust of his attack.

"They can frame it any way they want. But for them to write a letter to a respected journalist saying that what their proposal is, is not privatization, I think goes beyond the line," he argued.

"I wouldn't ever suggest that my Republican colleagues should not use whatever terminology they want," Matsui continued. "But they shouldn't criticize others for using the correct terminology."

Mitchell says Matsui is "technically" incorrect.

"Privatization would imply that you're actually going to have total freedom; you no longer would have to pay a Social Security payroll tax, and you could choose to save or you could choose not to save, it's up to you," he explained. "That's not what Republicans are talking about."

The Republican plans, he added, would continue to collect the full Social Security payroll tax, continuing to direct a portion of the income to the existing Social Security program, to pay current beneficiaries. The remaining amount, which varies from one proposal to the next, would be directed in tightly limited and controlled private investments.

"That's certainly not a private system," Mitchell concluded.

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