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A Project of The Annenberg Public Policy Center

Democrats Misfire on Social Security — Again

In Wisconsin and Kentucky House races, the Democrats are attempting to mislead voters into believing the Republican candidates support the privatization of Social Security — despite evidence to the contrary.

The Democratic Congressional Campaign Committee is up with an ad attacking Republican Sean Duffy in Wisconsin’s 7th Congressional District, but the spot mischaracterizes Duffy’s position on Social Security. While Duffy has made some ambiguous statements in the past, he has never said he supports a privatized Social Security system, and in fact has recently said just the opposite. 

In Kentucky’s 6th Congressional District, the attack line is similar — and equally wrong. Rep. Ben Chandler’s latest ad says Republican Andy Barr “wants to privatize Social Security and gamble it in the stock market.” But Barr has never said he supports privatization. Barr clearly says on his website: “I will oppose plans to privatize Social Security.”

On top of that, the DCCC’s ad tries to frighten seniors by saying that under a privatized system, they could have lost "nearly 40 percent of their retirement benefits" when the stock market collapsed in 2008. That’s ridiculous, and could only have happened in a system where 100 percent of beneficiaries’ money was given over to Wall Street. Recent proposals to let individuals have optional private Social Security accounts would let them invest only a portion of their payroll taxes, meaning the rest would have been perfectly safe, and one plan currently being discussed guarantees against any losses by investors.

Did Duffy Say ‘Privatization’?

The Wisconsin race is for the House seat now held by Democratic Rep. Dave Obey, who’s not seeking reelection. Duffy, a former district attorney and reality TV star, will likely face off against Democratic state Sen. Julie Lassa. The two are favored to win their respective primaries on Sept. 14.

The DCCC bases the ad’s assertion that "Sean Duffy backed a plan to privatize" Social Security on the fact that Duffy has voiced support for Rep. Paul Ryan’s budget plan. Ryan is the top Republican on the House Budget Committee and has gained a fair bit of attention within the GOP for his fiscal road map.

One aspect of Ryan’s plan would offer people under age 55 the ability to invest "over one-third" of their Social Security taxes in "personal retirement accounts." As we’ve written, Ryan’s Social Security proposal closely tracks that of President George W. Bush in 2005. Private accounts would be entirely optional under either proposal. But Bush’s proposal failed to pass in a Republican Congress, and Ryan’s far-ranging budget blueprint — calling for private accounts — has attracted only 13 cosponsors.

And despite what the ad says, it’s not at all clear that Duffy backs private accounts. The DCCC cites two pieces of evidence for its claim. One is a brief interview with an unknown person that’s posted on YouTube, in which Duffy says he thinks Ryan is "a rock star" and that he supports Ryan’s budget plan. But general support for the plan doesn’t necessarily mean that he supports the Social Security element of it, and Duffy wasn’t asked specifically about that. (After the ad began running, the DCCC posted another video that shows Duffy mentioning Ryan’s plan. But this clip is even more vague, with Duffy saying that if Republicans win the House, "we can start talking about [Ryan’s] road map for America.")

The second piece of evidence from the DCCC is a Wisconsin television interview from earlier this year, in which Duffy says this:

Duffy: Social Security – people 55 and older are looking for that in their retirement. But folks that are in their 50s, 40s, in their late 30s like me, we realize that that system’s not going to be there for us when we get to the age of retirement. So those of us who look down the road, we need to reform the system to make sure it is sustainable, and I think there are common-sense approaches to do that.

Duffy doesn’t say a word about allowing people to shift some of their payroll taxes to private accounts. He could be talking about raising the retirement age, slowing the growth of benefits paid to future retirees, or some other option.

In fact, we couldn’t find any mentions of Duffy specifically backing private accounts for Social Security, and Democrats have yet to produce evidence that he has done so. To the contrary, Duffy has firmly planted his flag on the opposite side of this issue. "One component I don’t think is part of the equation is privatizing Social Security," Duffy told the editorial board of the Wasau Daily Herald on Aug. 23. "Privatizing is not an option."

And on his website Duffy states:

DuffyforCongress.com, undated content, accessed Aug. 31: I have not and will not endorse privatizing Social Security because I don’t believe it is the solution to making Social Security solvent.

The 40 Percent Fraud

The ad also says that privatizing "would cut the guaranteed benefit, and gamble seniors’ retirement on the stock market. Remember the crash? Families could have lost nearly 40 percent of their retirement benefits."

We asked the DCCC for backup for this assertion, and a spokeswoman sent us figures showing that from October 2007 to October 2008, the Dow Jones Industrial Average declined almost 40 percent.

But nobody would have lost 40 percent of their "benefits." For that to be true, people would have had to sock every penny of their payroll taxes in private accounts. That’s not even an option. Though Ryan’s plan envisions an average of 59 percent of Social Security payroll taxes going into personal accounts when they’re fully phased in, that’s a far cry from 100 percent.  Furthermore, the DJIA has recovered some of its value since the plunge, and is now 27 percent below the record high it reached on Oct. 9, 2007. That’s a big loss to be sure, but substantially less than the 40 percent figure used in the ad.

More important, under Ryan’s plan, even those who chose to use the private accounts would be fine. Ryan’s plan comes with something Bush’s proposal lacked: a safety net, "a guarantee that individuals will not lose a dollar they contribute to their accounts, even after inflation."  

Not ‘Andy Barr’s Plan’

In Kentucky, Rep. Ben Chandler, too, is basing his false claim on comments that Barr made not about Social Security, but about the "Paul Ryan budget." It’s not exactly clear what "Paul Ryan budget" Barr was talking about, but it is clear that Barr wasn’t talking about Social Security.

The ad — "Meet Andy Barr" — began airing Aug. 28. It says Barr "wants to privatize Social Security and gamble it in the stock market. Funneling your tax dollars to Wall Street while your Social Security benefits are cut." It repeatedly shows the words, "Andy Barr’s Plan" on the screen, as if Barr himself had proposed a privatization plan. He has not, and he hasn’t endorsed one, either.

As evidence of "Andy Barr’s Plan," the ad cites comments Barr made July 15 on Sue Wylie’s radio talk show on WVLK 590 in Kentucky. The DCCC has seized on those comments as well, posting this audio clip on YouTube with the headline: "Andy Barr Supports the Ryan Budget."

On the Wylie show, a caller named Dan correctly stated that the congressional Democrats haven’t produced a budget yet, but incorrectly stated that Ryan has produced "the Republican budget." (The roadmap isn’t an annual budget plan; it’s a bill that deals with long-term solutions to fiscal problems.) Nevertheless, Dan asks Barr: "They put forward the Republican budget and, you know, if that were to come forward, if that was the budget to come up, would we be able to count on you to support that Paul Ryan budget?"

Barr first chides the Democrats for not having a plan yet, and then he voices general support for any Republican alternative.

Barr, July 15: In terms of Congressman Ryan’s proposal, some of the Republican proposals, obviously in my judgment they are much superior to the tax-and-spend approach that this president and the leadership in Congress is taking.

Dan asks, "So we can count on you to support the Republican budget?" Barr responds:

Barr: Yeah. I mean, absolutely. It’s certainly, I’m not in Congress now, of course, and I don’t have an opportunity to support a particular budget, but that’s certainly preferable — that budget, a leaner budget — is certainly preferable to the ones that have been offered by the president.

That’s it. No discussion of Social Security. No discussion of investing money in the stock market. No discussion of cutting Social Security benefits. We checked the Nexis news database and could not find a single instance in which Barr discussed Social Security at all, let alone privatizing it or cutting it.

The Chandler campaign could provide no information except the July 15 interview to back up its claim that Barr wants to privatize Social Security.

The Barr campaign says its candidate wasn’t even talking about Ryan’s "Roadmap for America’s Future." John Connell, Barr’s campaign manager, says Barr had in mind the kind of budget alternative that Ryan offered last year to the Democrat’s fiscal year 2010 budget.

Whatever Barr had in mind when he was responding to Dan’s questions, though, it’s clear that Chandler has gone too far — especially since Barr has promised on his website not to support privatizing Social Security. 

There are Republican candidates, such as Nevada’s Sharron Angle, who support major changes to Social Security. But Duffy and Barr are not among them.