I attended a town hall meeting hosted by Mike Ferguson in Bernardsville, NJ this morning and came away not too impressed. Given that I am writing on a site called DumpMike.com this is really not surprising. Still I was amazed at the outright misinformation that Mike peddled, and the fact that he apparently believed it either through ignorance or incompetence. Here's some of my notes and pics, with more to come.
Mike Calls for Bipartisanship, Then Insults Democratic Colleagues
In the traditional bipartisanship two-step, Mike had a placard that said, "Partisan Bickering Will Not Strengthen Social Security" but slapped his Democratic colleagues around. The first bullet reads, "Social Security's financial challenges require a thoughtful, bipartisan solution."
He's right. So it's a wonder that he went on the attack on more than one occasion against his Democratic Colleagues.
In response to a question, Mike said, "What is the Democrat's solution for Social Security? Zip." Realizing this might not have been the best answer, he continued after a beat, "The only people who are talking about solving the problems of social security are Republicans. They (Democrats) seem to be saying there is no problem with Social Security and if we leave it alone it will get better."
That's not really bipartisanship, but if it were true I guess you could say it was honest. Unfortunately for Mike, it is not true.
Congressman Frank Pallone is a Democrat who serves NJ's 6th Congressional District which borders Mike Ferguson's 7th District. Frank Pallone called for the President to form a bipartisan commission on Social Security like Ronald Reagan and Tip O'Neill did in 1983.
Congressman Rush Holt is a Democrat who serves NJ's 12th Congressional District which border's Mike Ferguson's 7th District. Rush Holt says that we need "to take Social Security in for a tune up, not haul it to the junk yard." His PowerPoint presentation ends with this line: "To assure full benefits 50 years from now, bipartisan adjustments are the right solution."
Since both Democratic Congressman Pallone and Congressman Holt have called for action to ensure Social Security solvency, it would appear that either Mr. Ferguson is not talking to his colleagues across the aisle (or down the street) or is engaging in partisan politics. Either way, this doesn't help out with crafting a "bipartisan solution."
Furthermore, Ferguson exacerbated his attack on Democrats with this clever line:
The only Democrats who seem to be willing to do something about Social Security are either out of office or dead like Senator Moynihan."
If this is Mr. Ferguson's idea of reaching across the aisle, he has a lot of learning to do.
Mike Doesn't Know the Scope of the Problem
In response to a question about why borrowing $1 or $2 trillion to implement private accounts, Mike responded that this amount was just a drop in the bucket compared to the "$75 trillion of debt Social Security will have by the end of the century." This is, of course, patently untrue.
When an attendee (who I was later told was an economics professor at Rutgers University) at the town meeting spoke up to say that $3 trillion was the correct number Mike responded, "Three trillion dollars by seventy five years is not what I have. The statistics I have are different."
Earlier in the evening Mike said that all his numbers come from the Social Security administration, but he must have been confused since this is what the Social Security administration has to say about the 75 year "unfunded mandate":
Social Security's Chief Actuary projects that in present-value dollars the total net Social Security cash flow for years 2004 through 2078 is projected to be nearly -$5.2 trillion. When the trust fund balances of $1.5 trillion at the beginning of 2004 are added to this value, we get a financial shortfall (or unfunded obligation) for the 75-year period of $3.7 trillion.
Mike also got the entire $75 trillion number wrong, as well, and should have read the House and Senate Republican Conferences' talking points on Social Security [pdf] to see that even they say the 75 year "unfunded mandate" is just $10 trillion. That's wrong, too, but at least it is closer to the truth.
If he is going to be off by almost a trillion dollars a year in his estimates, you have to wonder if Mike really understands the scope of the problem or the efficacy of the various solutions to make up the difference. How can he possibly judge the different proposals when he thinks the problem is 20 times worse than it is?
Mike Uses Misleading Lifespan Data To Suggest Social Security Is In More Trouble Than It Is
In this picture you can see Mike trying to take a bit of 100 percent accurate data and produce 100 percent misleading conclusions to make it look like Social Security is in more trouble than it really is.
As you can see (click for a bigger picture), Mike is pointing to a chart with the following bullets:
- In the 1930s, when Social Security was created, life expectancy was 60 years.
- Today, it's 77 years.
- That means seniors are living longer.
- And their retirement nest eggs must last longer, too.
Again, since Mike said all his data came from the Social Security Administration we'll go to their Trustees Report, Table V.A3-Period Life Expectancies which charts life expectancies from 1940 to now. This table has two types of life expectancy, from birth and from the traditional age for retirees, 65. Essentially, these are the average number of years someone born can expect to live, and the average number of years someone who successfully gets to 65 can expect to live.
In 1940, the average lifespan for males from birth was 61.4 years, and for women it was 65.7 years. Today, the averages are 74.7 for men and 79.6 for women. Now, that seems a pretty dramatic increase except that this number means absolutely nothing to the Social Security administration when they try to figure out how long someone will receive benefits.
Why? Because when you calculate from birth that means that infant mortality and childhood diseases move the average significantly down. If you have four people and one dies at birth and the other three live to 100, the average lifespan for this group is 75.25 years. Yet Social Security would still have to pay each of the three who lived to 100 benefits for 35 years.
If four people lived just 75.25 years and they had retired at 65, then the combined payouts would have lasted just 41 years. However, given that one died at birth and the others lived to 100 then the combined payouts would last for 105 years. Using total lifespan numbers is totally useless when trying to figure out how much Social Security will have to pay out.
The change from around 60 to around 77 year life expectancies is a function of lower infant mortality, greater workplace safety and dramatically improved health care in this country for those under 65, but has little to do with Social Security benefits.
Taking the numbers from the age of 65, a man turning 65 in 1940 would have lived an additional 11.9 years and a woman an additional 13.4. Today those numbers are 16.1 and 19.0 respectively. This means that men would receive Social Security about four more years now than then, and women about four and a half years more.
While Americans on average are living longer than in the 1930s, seniors are adding just four years or so. While this is significant, it is just one quarter of the 17 year difference Mike put on his chart.
It is the number of years someone lives after they reach retirement that matters, but Mike uses the average lifespan from birth in an effort to make the problem look worse than it is. The 2004 Social Security Trustees Report is very clear on this.
Mike Ferguson Confused About the Facts At Hand
One of the odder moments was when Mike was trying to make the case that there will be fewer workers per retiree in the future. This is absolutely true, but Mike said on at least two occasions that the workforce was shrinking. One time he said, "There are fewer people in the workforce than we had 20 years ago."
This is just not true, and anyone who pays attention to labor issues and unemployment rates knows it. I said, politely because I knew that Mike's staffers had stumbled onto this site and I did not want to cause a scene, "Congressman, twice you've said the workforce is shrinking. It's not."
"I'm getting my numbers from the Social Security Administration, all my data is from the Social Security Administration," he responded.
"But its not right. The workforce is growing," I said. He moved on, and I sat down. [During the question and answer period he refused to call on me, which was kind of weak. Some folks got multiple bites at the apple and I sat in the back with my hand raised waiting to be called on.]
I don't know what the Social Security Administration has to say about workforce levels in the United States, but I did go to the horses' mouth and checked with the United States Department of Labor Bureau of Labor Statistics to see the workforce levels.
- In January 1985, there were 114,876,000 people in the United States labor force.
- In January 1995, there were 132,038,000.
- In January 2005, there were 147,979,000.
That's an extra 43 million people in the workforce, which isn't shrinking any way you look at it.
The only way to figure this is Mike got confused, thinking that a lower ratio of workers to retirees would necessarily mean a lower number of retirees, which is just not the case. The reason why the ratio is changing is not fewer workers, but more retirees. Mike should know that.
Ask Mike If He Was Wrong About These Issues
I'm happy to make corrections to anything in this post today if I was wrong. The Ferguson staff had a young woman making a video tape of the entire event, so if I misquoted Mike or was confused about what he said all they have to do is show me the video and I will do a mea culpa here.
But Mike should also do the same. He passed out some flatly untrue information today whether by error or calculation, and that information should be corrected. Write to Mike and ask him if he will stop making these claims and using this false information. Call his office at (908) 757-7835 or write to him from his Congressional Website.
When you are done, leave the answer in the comments for or write to dumpmike@gmail.com.