Moynihan is quoted a lot thanks to his liberal reputation, but that reputation provided cover for a multitude of sins (for a quick summary of the sins, see
http://www.kausfiles.com/archive/index.09.23.99.html)
http://www.ourfuture.org/issues_and_campaigns/socialsecurity/key_issues/bush_soc_sec_commission/readarticle795.cfmVery Pat
By: Jonathan Chait
Date: 4/20/98 Source: The New Republic
Moynihan's Social Security fix.
Senator Daniel Patrick Moynihan's plan to reform Social Security, which he unveiled at Harvard in mid-March, is nothing if not courageous. We know this because even his ideological foes say so. "It is a courageous idea," conservative columnist James Glassman wrote in The Washington Post. A lengthy Wall Street Journal editorial lauded Moynihan's "daring." Moynihan himself agrees. "It is a time for courage," he declared.
This epic of courage is a familiar ritual for Moynihan, the philosopher king. He is, after all, a real intellectual, who made his reputation during the '60s by telling uncomfortable truths about urban poverty at great cost to his own standing among liberals. Moynihan assiduously cultivates his iconoclastic image--adorning his books with photos of himself thoughtfully stroking his chin, and generally infusing his every pronouncement with high intellectual and moral purpose. So, when Pat Moynihan, Champion of the Welfare State, breaks with the Social Security orthodoxy, his stance presumptively occupies the moral high ground.
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Moynihan himself helped to engineer this system in 1983. But now, he says, Social Security taxes should raise no more revenue than necessary to cover its year-to-year costs. (Thus the term "pay as you go.") The switch is needed, Moynihan says, because the trust fund is "a pure illusion." That is, the federal government does not really save the Social Security surplus; instead, it spends it on the rest of the budget--in effect, writing IOU's to the trust fund. Thus, Moynihan concludes, when the baby boomers retire and we need those surpluses to pay out Social Security benefits, the money won't be there. So he proposes to drop the pretense and cut the payroll tax by two percentage points, then start hiking it several decades from now, until in 2060 it becomes one point higher than it is today.
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That would indeed be bold--if Moynihan weren't doing it on the sly. But, instead of coming right out and admitting that he is proposing a cut in Social Security benefits, Moynihan characterizes his CPI change as a mere technical correction. As he told CNN, "There's not an economist I know who does not think ... that the Consumer Price Index overstates inflation." If that's true, then he must not know very many economists. Moynihan sits on one end of a broad spectrum of thinking about the CPI. While a 1996 commission on the CPI stacked with economists predisposed toward Moynihan's view concluded that the CPI overstated inflation by a little more than one percentage point, many economists thought that figure was too high. Some even thought that the CPI understated inflation. And, since then, the Bureau of Labor Statistics, which compiles the CPI, has, on its own, adjusted its methods of calculating the CPI so that it reduces the recorded rate of inflation by a third of a percentage point. Future changes in BLS methodology could reduce measured inflation even further. In short, fewer economists than before think the CPI exaggerates inflation, and the proportion who do will likely drop. Yet Moynihan would hold Social Security one full point below measured inflation permanently. If the CPI runs at three percent, then Social Security benefits would rise by only two percent. This is a way of cutting Social Security without having to admit it.
---more at link---
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