AARP’s latest TV ad shows a suburban home being flattened to repair a clogged kitchen sink, and claims that the creation of individual accounts would “dismantle Social Security” and “lead to huge benefit cuts.”
The ad is intended to be humorous but presents a distorted picture. It both understates Social Security’s financial problems and misrepresents the effect that individual accounts would have.
Social Security’s problems are more serious than a stopped-up drain. And the system isn’t about to sink like the Titanic, either, as an earlier ad by Bush supporters says. Social Security is more like a home being eaten slowly by termites.
AARP’s latest Social Security ad passes off the system’s serious financial problems as nothing worse than a clogged kitchen sink. It also falsely claims that creating individual accounts would “dismantle Social Security.”
AARP Ad: “Kitchen Sink”
Plumber: Yep, looks like the drain is clogged. Only one way to fix it. We’re going to have to tear down the entire house.
Plumber: Go ahead, guys!
On Screen: Demolition crew wrecks house with sledgehammer, jackhammer, backhoe, wrecking ball.
Announcer: If you had a problem with the sink, you wouldn’t tear down the entire house. So why dismantle Social Security when it can be fixed with just a few moderate changes? Reform is necessary, but diverting money into private accounts is just too drastic, could add up to two trillion dollars in more debt and lead to huge benefit cuts. For more visit AARP.org. Paid for by the AARP.
The 30-second ad began airing Monday, March 21. AARP said it would buy time in every market nationally as well as during local prime time news shows and on national cable TV networks.
The TV ad uses the same kitchen-sink metaphor as an earlier newspaper ad, but with the addition of visuals and sound effects the overall impression becomes much more exaggerated and misleading. The ad shows a plumber calling in a wrecking crew to level a suburban home in order to repair a stopped-up drain, complete with sounds of shattering glass and crunching wood. The final frame shows water shooting up like a geyser from a broken pipe amid a pile of rubble.
The ad is clearly intended to be humorous, so viewers may well realize that the message is not to be taken as literal fact. But strictly speaking, the message misleads in several ways:
Understating the Problem
Comparing Social Security’s problems to a clogged sink understates matters considerably. In fact, as we’ve often noted, the current Social Security tax structure can’t support all the benefits that have been promised. According to Social Security’s chief actuary, the current level of Social Security taxes will be able to support only 73 percent of the currently promised level of benefits when the systems trust funds become exhausted. That’s currently projected to happen in the year 2042. A new report is due out later this week, which may revise those numbers up or down slightly. Either way, that’s more serious than a clogged drain.
The ad further claims that the current system “can be fixed with just a few moderate changes.” In fact, fixing the current system will require some fairly sizable tax increases, cuts in future benefit levels, or some combination of the two. For details, see our earlier article and decide for yourself how moderate such changes seem.
Dismantle Social Security?
Creation of individual accounts would be a big change, but would hardly “dismantle” Social Security as the AARP ad claims. As proposed by the President, the individual accounts would be voluntary. Those who choose not to participate would remain in the current system, and so would all who are currently age 55 or older.
Also, individual accounts wouldn’t by themselves “lead to huge benefit cuts” as the ad claims. Future benefit levels will indeed have to be reduced unless taxes are increased to pay for them, something the President has said he’s against. But that’s true regardless of whether or not individual accounts are created.
It is also true that those who choose to participate in individual accounts would have to accept a reduction in the level of their own guaranteed future benefits, but that would be their choice, and it would be in exchange for the chance to get a higher level of future benefits overall should the investments in the accounts yield returns higher than three percent a year above inflation.
Both sides are using exaggerated metaphors in this debate. Where AARP presents Social Security as having nothing worse than a stopped-up drain, the other side has depicted it as a doomed Titanic about the strike an iceberg and sink to the bottom. Neither picture is accurate.
What would be an accurate metaphor? Since others are having so much fun with this, we’ll give it a try.
The kitchen-sink metaphor is wrong because Social Security’s problems grow steadily worse over time and threaten the entire benefit structure. The entire house is crumbing from within, so delaying a solution only makes the eventual repair more difficult and expensive. We would compare the problem to a termite infestation rather than a clogged sink or a sudden collision with an iceberg.
Furthermore, individual accounts by themselves don’t constitute a wrecking ball as the AARP implies, any more than individual accounts alone would save the system as the President’s supporters claim. It is true as the AARP ad says that substantial borrowing would be needed to create such accounts. So we would characterize the creation of such accounts as adding a new wing to that termite-infested house, while taking out a new mortgage to pay for it. The new wing may or may not be worth the expense, but the termites are still there.
We’re not sure that the image of building a new addition to a slowly deteriorating home would make a very good TV ad, but it would give a better picture of reality than either sides’ ads have shown so far.
Watch AARP’s Ad: “Kitchen Sink”
“Targeting Younger Workers, AARP Launches New Ad Campaign Against Social Security Private Accounts,” AARP News Release, 18 March 2005.
“THE 2004 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND DISABILITY INSURANCE TRUST FUNDS,” 23 March 2004.
Stephen C. Goss, “Estimated OASDI Financial Effects for Two Provisions that Would Improve Social Security Financing Plus a Balancing Tax-Rate Increase,” memo to Robert M. Ball: 10 Oct 2003.
Robert M. Ball, “Social Security Plus:” December 2004.
Chris Chaplain & Alice H. Wade, “Estimated OASDI Long-Range Financial Effects of Several Provisions Requested by the Social Security Advisory Board,” memo to Stephen C. Goss, Chief Actuary, Social Security Administration: 7 Feb 2005.
Congressional Budget Office, “Updated Long-Term Projections for Social Security,” March 2005.