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Alan Simpson shows his cards to The Times

June 04, 2012|By Michael Hiltzik
  • Former Sen. Alan Simpson in a rare moment of repose in 2010.
Former Sen. Alan Simpson in a rare moment of repose in 2010. (Harry Hamburg / Associated…)

Former U.S. Sen. Alan Simpson (R-Wyoming), perhaps our leading avatar of misinformation about Social Security, sent us a lengthy email on Friday responding to our series of posts criticizing his error-rich take on the nation’s preeminent social insurance program.

You can read his entire email here. Be forewarned: It’s a dizzying compendium of ignorance, myths, irrelevancies, and historical revisionism, leavened with a healthy dollop of defensiveness. (Simpson also seems at the outset to have confused columnist Michael Hiltzik, who has been writing about him, with editorial page editor and columnist Jim Newton, who hasn't. But leave that aside.)

Responding to all Simpson's assertions would take a tome, so we’ll simply address two of his main points: That Social Security was never designed as a “retirement system,” and that the original bill’s drafters deliberately set the retirement age at 65 because life expectancy in 1935, at the time of enactment, was 63. In other words, Simpson says it was designed from inception as a rip-off.

Simpson writes that the term “retirement” appears nowhere in the congressional hearings on the bill. He writes that he “reviewed the hearings … and never found the word “retirement” in any of the early beginnings of the construction of Social Security. Let’s get honest!”

He issues the following challenge:

“When you find the word “retirement” in your vast research, either uttered by Labor Secretary Frances Perkins or Edwin Witte, head of the Committee on Economic Security, appointed by President Roosevelt in 1934, please share it with me.”

Challenge accepted.

In Witte's testimony before the House Ways & Means Committee on Jan. 21, 1935, he said, referring to the Social Security bill: "The annuities payable under this section … contemplate an annuity on retirement at the age of 65 or over." (This appears on page 89 of the Ways & Means Committee hearing transcript.)

Before the Senate Finance Committee on Jan. 30, Witte described benefits as being based on "the record of the prior contributions when retirement age is reached." (Senate Finance Committee hearing report, p. 198.)

Indeed, the report of the Committee on Economic Security, the foundation stone of the congressional debate over the following weeks, defined Social Security's retirement component head-on: "To meet the problem of security for the aged we suggest … annuities all to be applicable on retirement at age 65 or over." (Ways & Means report, p. 22.)

There are other references to “retirement” in the debate, but one need not cite them to understand that Social Security's old-age component was seen in 1935 explicitly as a retirement system. The record is replete with references by Perkins, Witte, and the senators and representatives to "old-age pensions." Could Simpson really not recognize an "old-age pension" as an essential and defining component of a retirement system?

The full record of testimony and committee debate can be found on the Social Security Administration’s website here.

In his email Simpson again misinterprets life expectancy statistics and their bearing on Social Security, though he tries to inoculate himself  from taking responsibility for his error by claiming that it is his adversaries who "torture statistics." Yet it is at his hands that the numbers have been screaming for mercy. 

To set the record straight once again: Life expectancy at birth was 63 in the 1930s (actually, to be precise, expectancy at birth in 1939-41 was 63.62, according to National Vital Statistics reports). It is not statistical "torture" but hornbook statistical analysis to observe that longevity at birth, which is highly sensitive to infant and youth mortality rates, is not relevant to the fiscal health of Social Security or to the program's original features. It’s life expectancy at 65 that’s the most important longevity factor for Social Security, because it defines the length of one's retirement and therefore one’s lifetime as a Social Security recipient.

In 1939-41, those who were already 65 had average life expectancy of 77.8. For all Americans, that average has risen by a little over five years in a span of seven decades. Importantly, those gains are not distributed equally; black males, for instance, have gained only about two years of life expectancy from 65 in the same period. That means that manipulating the Social Security retirement age based on overall longevity averages, as Simpson and other "reformers" advocate, will shortchange millions of Americans, for minimal fiscal gain.

Simpson’s letter to Max Richtman of the National Committee to Preserve Social Security and Medicare, which he references in his email to us, can be found here; Richtman's letter to Simpson, to which it's a response, is here

A couple of other minor points. The "notch baby" issue Simpson refers to has virtually nothing to do with Social Security but is an artifact of a miscalculation of inflation that Congress made in 1977. And FDR didn't view old-age pensions as a subset of unemployment insurance; both programs were implemented as co-equal provisions of the original Social Security Act.

It's true that FDR, like Perkins and Witte, envisioned Social Security as a near-universal program; but Congress eliminated several employment groups, including domestic workers, from participation in 1935 to save money. Those groups started getting added back into the program in the 1950s, under President Eisenhower, a Republican.

Related: 

Alan Simpson is more wrong than ever on Social Security

Alan Simpson's ugly attack on retirement advocates

Let's beef up Social Security benefits

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