Pittsburgh Post-Gazette

August 24, 2001 Friday SOONER EDITION

SECTION: EDITORIAL, Pg.A-19

SHRINKING-SURPLUS SIDESHOWS BOTH SIDES TORTURE STATISTICS FOR POLITICAL SPIN WITH AN EYE ON SENIORS

DATELINE: LOS ANGELES

Here's how silly the debate has become: Otherwise intelligent people, most of them Democrats, sidle up to one another at backyard barbecues and announce, as if it were true and as if it justified all their loathing of George W. Bush: "See! The surpluses are already gone! And Bush is raiding Social Security and Medicare!"

They say this because they hear top Democrats say it. Top Democrats say it fully aware that it is not true, but also knowing it is politically potent shorthand for something that is true, if insignificant. If you can tolerate these abstractions for one second longer, here's the point: The terms of debate that may now consume Washington are so removed from the questions that should preoccupy us that you have to wonder whether our powers of reason really distinguish us from the other mammals. Here are five things you need to know to peer through the fog:

1) The budget surplus, thanks mostly to a slowing economy and partly to Bush's tax cut, is expected now to be about $160 billion this year, down from a previously expected $280 billion.

2) $160 billion is still a VERY BIG SURPLUS. No matter how you look at it, the nation's fiscal outlook has improved dramatically since the mammoth deficits of the early 1990s.

3) The surplus this year will roughly equal the amount by which Social Security payroll tax receipts will exceed Social Security benefits, giving rise to the cry that the Republicans are on the verge of "raiding the trust fund." This is a matter of math: If the projected overall surplus (which includes Social Security) ends up smaller than the Social Security surplus, a "raid" will have occurred, in which payroll taxes help fund other parts of the government. (too bad, he hasn't yet caught on that the trust's current $153 bill. is about 40% interest, no cash involved)

4) Both parties "raided the trust fund" this way for 30 years -- until the emergence of big surpluses in the rest of the budget made it practical a few years ago to establish "nonraiding" as a new standard of probity.

5) "Dipping into" these funds is a matter of modest concern, but not for the reasons Democrats say. Reducing the surplus by any means reduces overall national savings, which may hurt long-term investment and growth. Given that the economy hasn't stirred much even after the Fed's previous six interest-rate cuts, however, it's probably wise to have the feds consume a little more and save a little less.

The upshot is that a meaningless phenomenon -- the potential Social Security "raid" -- has been placed at the center of national politics by both sides. The press conspires in the hoax by parroting these terms of debate.

Look closely, however, and you'll see reporters note that both parties were long in cahoots to do exactly what is now generating these end-of-the-world headlines, and no one raised a fuss. This is the press's awkward nod to the fact that they know this is not a big deal, even as they are required by the norms of journalism to pretend it is because the politicians are pretending it is, too. (if he understood the interest deduction, he might then be led to see how much comes from other entitlements.)

It's no mystery why Democrats are framing the debate this way -- they want to scare seniors for the 2002 elections. (They also, with good reason, want to harness this fright to revisit the trickle-down parts of Bush's tax cut that phase in later.)

The Bush White House has plainly judged that the press is too stenographic, and the public too dumb or distracted, for Bush ever to sell the idea that something called a "raid on Social Security" doesn't matter. As Lawrence Lindsey, Bush's top economic adviser, puts it: "The president's committed to not touching the Social Security surplus. Period." (except to launder debt)

That leaves no wiggle room. And so Bush's staff now resorts to accounting tricks to stay clear of the line. You can imagine their rationale as they cook the books: If the line we're avoiding crossing is itself silly, then what does it matter how we avoid crossing it?

The whole spectacle is a complicated sideshow designed either to scream or to silence a big "Boo!" to senior citizens.

As the charades unfold and the accounting hijinks proliferate, one thing is certain: Whether we dip into the Social Security trust fund or not will always be unknowable, akin to that other metaphysical mystery: "Who won the 2000 presidential election?"

NOTES:

Matthew Miller is a columnist for Tribune Media Services (mattino@worldnet.att.net).

(TUFF NOTE: What the press does not yet understand is that the raiding has been going on all year and there is nothing in the trust but debt. I'm waiting, waiting, for them to get this. With only five weeks to go, do they really think there's much to dip into? Only what comes in from now to the end of the fiscal year.)