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Hack WatchNewsletter | January 5, 2024

Shame on WSJ for Distorting Seniors’ Economic Well-Being to Push Social Security Cuts

Economic PolicyMedia Accountability
Shame on WSJ for Distorting Seniors’ Economic Well-Being to Push Social Security Cuts

Just days after House Speaker Mike Johnson reiterated his desire to slash crucial benefits, the newspaper allowed a pair of Hoover fellows to embellish the material circumstances of elderly Americans.

This article first appeared in Hack Watch, our weekly newsletter on media accountability. Subscribe here to get them delivered straight to your inbox every week, and check out our Hack Watch website.

A couple of months ago, freshly elected House Speaker Mike Johnson (R-La.) announced his plans to “immediately’” establish a “bipartisan debt commission” designed to do behind closed doors what voters staunchly oppose: Gut popular social insurance programs. Mere days later, a pair of GOP lackeys took to the pages of the Wall Street Journal opinion section to tell us that older Americans are doing quite well—so well, they argued, that now is the opportune time to slash Social Security, Medicare, and other entitlements. The authors’ thinly veiled ploy was unconvincing and yielded a letter to the editor that stated “I see where this is going.”

Even if the op-ed didn’t fool many readers, it’s still worth setting the record straight about the scourge of old-age poverty in the United States, which has actually worsened in recent years. And make no mistake, John Cogan and Daniel Heil—the two Hoover Institution fellows behind the WSJ piece—are far from alone in advocating for austerity as a “solution” to the nation’s supposed debt “problem.” Earlier this week, for instance, the New York Times’ German Lopez did deficit hawks a huge favor by completely ignoring how right-wing budget brinkmanship is (and always has been) explicitly aimed at imposing benefit cuts.

For more on that, check out this piece from my colleague Julian Scoffield, who takes Lopez to task over assigning equal blame to Democrats and Republicans for the growing federal debt even as the latter seek to extend Trump-era tax cuts for the top 1% and have fought every attempt to raise revenue (whether through hiking taxes on corporations and the rich or fully funding the government to enable the IRS and other agencies to crack down on wealthy tax cheats and other white-collar criminals).

Now to Cogan and Heil’s misleading argument. The authors’ key contention is that “the good life for senior citizens has never been better.” To support this claim, they cite their analysis of Federal Reserve data, which showed that “the inflation-adjusted income of the median household headed by someone 65 or older rose by 94% from 1982 to 2021,” compared with a “35% increase among younger households.” Moreover, “the growth in seniors’ household income is matched by an increase in their wealth,” Cogan and Heil tell us, noting that “the typical senior household’s inflation-adjusted net wealth in mid-2022 was nearly 200% higher than it was in 1983.”

Why are today’s seniors ostensibly affluent? Cogan and Heil give two main reasons: First, the baby boomer generation benefitted from investing a greater portion of household savings in individual retirement accounts and 401(k)s (introduced in 1974 and 1978, respectively). Second, many boomers are still working “later in life.” 

On the second point, it’s hardly inspiring that instead of retiring, a growing number of older Americans have continued to toil away at their jobs, no doubt often out of necessity. Workers in the United States already work more hours per year than their counterparts in other high-income countries, and these Hoover fellows see no issue with prolonging economic exploitation past the age of 67. The authors completely abandon the principle of ensuring that everyone has sufficient resources to enjoy their final decade-plus in leisure, which could be accomplished by expanding Social Security and Medicare benefits.

This is not exactly surprising given the neoliberal bona fides of Cogan, the recipient of a 2018 book prize named after Friedrich Hayek, one of the intellectual architects of neoliberalism. Previously, Cogan served in the Reagan administration and was also a member of former U.S. President George W. Bush’s so-called “Commission to Strengthen Social Security.” Heil’s résumé is shorter but also problematic, buoyed by his goal of “replacing failed policies with state and federal initiatives that alleviate poverty by encouraging workforce participation and human capital development” (translation: ditching welfare in favor of workfare). Besides his role as a policy fellow at Hoover, Heil served as Jeb Bush’s economic policy adviser during his ill-fated 2016 presidential campaign. (It’s worth noting that one reason why Trump crushed Jeb in that year’s primaries is because he ran as the purported protector of Social Security, even if his subsequent White House budget proposals sought cuts to the program).

The most concerning thing about Cogan and Heil’s argument is that it oversimplifies the economic status of elderly Americans (this is a common problem with generational analyses that aggregate millions of variegated households into a single abstract category or even subcategories like “the poorest 25% of senior households,” which still contains a wide range of circumstances). The whole reason for their disingenuous exercise is to justify these two sentences: “Since Social Security, Medicare and other programs that assist seniors account for about 40% of non-interest federal spending, the growth in the national debt can’t be curtailed without reforming these programs. The high level of financial well-being enjoyed by most seniors provides Congress and the next president with an opportunity for reform.” 

Millions of older Americans may be relatively well-off. But according to the U.S. Census Bureau, the share of people 65 and over living in poverty increased from 8.9% in 2020 to 10.2% in 2022. Meanwhile, the OECD estimates that 23% of Americans 65 and older were impoverished as of 2020 (down 3% since 2000, but still well above the wealthy bloc’s 14% average). That’s the latest year OECD data is available, but the problem definitely hasn’t been solved in the past three years; in fact, some Social Security recipients saw their benefits inadvertently reduced during the Covid-19 pandemic because stimulus checks were mistakenly counted as income.

Thus, for millions of other seniors in the U.S., the situation is far less rosy than Cogan and Heil assert and any reductions in benefits would be devastating if not deadly. If you think I’m exaggerating, consider that cost-related nonadherence to drug therapy (i.e., skipping doses because one can’t afford the sky-high price of prescription medications) is projected to kill more than 1.1 million U.S. seniors this decade—making it a leading cause of death nationwide. Any claim that seniors as a whole are prosperous enough to withstand benefit cuts falls apart based on this fact alone. 

Proposals to slash Social Security and Medicare are fundamentally matters of life and death. And yet, the Journal’s op-ed pages would have us believe that they are merely attempts to tackle the national debt—a manufactured “crisis” that supposed “deficit hawks” (a category encompassing most Republicans, including Trump and other GOP presidential hopefuls, along with a few corporate Democrats) have repeatedly weaponized to extract reactionary concessions but have no interest in actually addressing. Notably, as Social Security Works president Nancy Altman has explained, Social Security is funded largely through payroll taxes and “doesn’t add even a penny” to the federal debt. Adding insult to injury, Cogan and Heil insist that seniors can handle benefit cuts because “they” (all of them?) are thriving. Again, this elides questions of inequality within the boomer generation (and to be clear, the severe intragenerational inequality plaguing the U.S. won’t dissipate as an age cohort gets older without sustained downward redistribution).

Did Cogan and Heil not expect people to notice their piece was published just days after Speaker Johnson urged the creation of another fiscal commission intended to fast-track trillions of dollars in cuts that he and other right-wing lawmakers have long called for? The entire essay is an affront to their readers’ intelligence.

For their part, the Journal’s opinion editors do a disservice peddling the myth that Social Security is inescapably doomed. This aura of inevitability is essential to the right’s entire “entitlement reform” schtick, wherein they tell us that it’s necessary to decimate beloved benefit programs in order to “save” them. Fear-mongering about so-called Social Security “insolvency” makes the situation sound worse than it is; “insolvency” does not refer to the program’s collapse, but to when a 20% reduction in benefits would kick in due to a revenue shortfall. And that is far less of a certain outcome than the Heils and Cogans of the world would like us to believe. 

As People’s Policy Project founder Matt Bruenig has explained, policymakers could avoid such a scenario by eliminating the payroll tax cap to ensure that Social Security taxes apply to all annual earnings, not just those under $160,200. Currently, individuals stop paying into the program on income in excess of that figure, meaning that billionaires like Jeff Bezos and Elon Musk stopped contributing for 2024 a few minutes into New Year’s Day. Millionaires will stop by the end of February.

Bruenig’s think tank is teeming with other ways to improve Social Security. Don’t expect to find these illuminating ideas in the WSJ anytime soon, however. The newspaper did invite Altman to contribute to a debate about Social Security privatization a few years ago. Its editors should commission more pieces from the likes of her and Bruenig. Our society would be better-off if their heterodox voices were heard in as many outlets as possible. Shunning them only ensures the spread of dangerous misinformation.

The above photo of House Speaker Mike Johnson (R-La.) is licensed under Creative Commons Attribution-Share Alike 2.0 Generic

Economic PolicyMedia Accountability

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