Tuesday, May 8, 2012

Obama’s “Julia” Garners Three Pinnochios on Social Security

The Washington Post’s Fact Checker column has given three out of four “Pinnochios” for President Obama’s misleading claim – in his kind-of-weird “Life of Julia” slideshow – that:

“Under President Obama: Julia retires. After years of contributing to Social Security, she receives monthly benefits that help her retire comfortably, without worrying that she’ll run out of savings. This allows her to volunteer at a community garden.

“Under Mitt Romney: Julia’s benefits could be cut by 40%.”

“Julia” runs afoul of the facts in a couple ways:

First, to the degree that President Obama hasn’t proposed a plan for Social Security, his plan is current law. This implies a roughly one-quarter cut in benefits for all retirees, new and old, when the trust fund runs out in 2033.

Second, the Obama administration has considered Social Security reforms that would cut benefits, such as reducing Cost of Living Adjustments (COLAs) and reducing benefits for higher earners.

Third (and this is one that just occurred to me), the supposed “40% cut” attributed to Gov. Romney wouldn’t be across the board but only for high earners. Unless Julia is assumed to be a high earner – in which case President Obama’s overall tax and spending policies would be of far less benefit to her than the slideshow might imply – she would see much smaller reductions under an actual Romney plan.

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