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Edmund Andrews (Courtesy New York Times) |
Edmund L. Andrews writes about economic policy for the New York Times. Based in Washington, D.C., he covers the Federal Reserve, monetary policy, tax policy and, short- and long-term fiscal issues like the overhaul of Social Security. He joined the Times in 1988, covering telecommunications and technology policy. From 1996 through August 2002, he was the Times' European economics correspondent based in Frankfurt, Germany.
Thomas Lang: How do you deal with covering a subject like Social Security that most Americans don't understand the details of?
Edmund Andrews: One thing I would say is that a lot of Americans actually know a lot about Social Security. The level of reader interest in this is astonishingly high. I get more response from articles on Social Security reform than I do on a great number of other seemingly sexier topics like the possibility of a dollar crash or the pros and cons of tax cuts. The Social Security issue gets a lot of attention from readers.
That said, it is one of those subjects that makes your eyes glaze over and is very difficult to understand. It's a tough one for most people to want to read about because it seems so dry. ...
The Social Security overhaul issue is one where there are a great number of armies of vested interests pushing either an ideological or financial agenda for private accounts or a well-organized union-backed effort to fight Social Security reform. There is a lot of mischaracterization of the issues at stake. It seems to me that one of things we can contribute as journalists is to cut through and identify the real issues that are at stake here.
TL: We'll be getting back to [the mischaracterization of the issues] in a couple questions. [On a different topic,] in which section of the paper should the current political debate over Social Security be featured -- the business section or the politics section?
EA: It's a subject that will end up in multiple sections of the paper. Right now it is tending to be a debate in the national/political section of the paper. [Tuesday] we had a story on the front page that was really a business story about the lobbying or campaign efforts of some in the financial services industry. ...
It's an issue of social policy and politics, so it does belong in the national pages. But there will be a lot written in the business pages also because you get into some pretty big issues about impact of the stock market, the bond market, the deficit, and macroeconomic effects of different proposals. (Editor's Note: The Times yesterday featured a lengthy analysis on page 2 of its business section of the likely outcomes of one reform model for Social Security that the administration is said to be leaning toward.)
TL: The administration has been switching between two numbers -- $3.7 trillion and $10.4 trillion -- to characterize the unfunded Social Security liability. What aspects of this issue are most vulnerable to manipulation by politicians and how do you guard against being manipulated by the numbers?
EA: The first thing to say is that both those numbers should be taken with a grain of salt. They may both be proven off the mark by a decent margin in the years to come -- though they are attempts at real estimates.
My own personal feeling is that it's probably more honest to talk about a $3.7 trillion deficit over the next 75 years. The much higher number, which the administration sometimes calls $10.4 trillion -- sometimes they boost it to $11 trillion -- is based on a so-called "infinite horizon" projection -- that is, what your liability would be for forever and ever in the future. ... I think that they use this number to heighten the sense of crisis. One of the administration's themes is that we are at a crisis point [with Social Security]. But there is a lot of debate about that. And even $3.7 trillion, which sounds like a big number, may or may not constitute a crisis. It's very much a subject open to debate.
You have to understand this in context. The problem with throwing out these numbers is that it sounds big, but 75 years is a long time. What do we really mean by that? One of the difficulties in reporting about this is that the accurate way to talk about these projections is in terms of percentage of payroll. But nobody, no lay person, really understands what you're talking about when you do that. But you kind of need to, and when you do it that way you realize that fairly modest changes can close the gap on Social Security.
TL: When you write about Social Security, do you try to do it in terms of percentage of payroll?
EA: I don't, actually. I personally have not talked about it in terms of payroll -- that the Social Security [shortfall] is now projected at 1.9 percent of payroll over the next 75 years. I don't do that because it's a very tricky, difficult concept to get through. What I have said and written is that the projected gap ... is one that -- when it comes to Social Security -- can be addressed in a lot of different ways. And these personal savings accounts really don't make much difference one way or another.
TL: Are there any other aspects of this issue that are particularly vulnerable to manipulation?
E.A.:There are several issues that people need to be very, very skeptical about when they hear the rhetoric. They need to be quite skeptical of claims that there is a crisis coming that needs to be addressed right now in a particular way. They need to be very skeptical of any claim that personal savings accounts are the solution to this crisis or shortfall -- because they aren't. They may have a lot of virtues but they really don't do much one way or the other to solve the problem. Some argue that they even, in the long term, make the fiscal gap worse.
TL:You obviously have some strong opinions about [the Social Security overhaul]. Do you have a problem expressing them so forcefully in the paper?
EA: I actually have expressed some of those. I wrote a pretty long article that said that personal accounts -- when you look at the main Republican proposals circulating for personal accounts -- that the personal accounts themselves do little or anything to solve the expected shortfall, and that the real savings come from benefit cuts in the future. I also wrote a very strongly worded Economic View column on this issue.
TL: So everything is getting through to the paper?
EA: It's hard. I don't want to be partisan. I don't want to be manipulated by one side or another in this. It's hard to parse the issues carefully and do so in a way that seems fair. But it hasn't been impossible.
TL: This next question coming up we've talked about, but I'd like to ask it because it addresses a slightly different issue. The growing voice of opposition in the Social Security debate is pushing the idea that Social Security is not actually in crisis, while the White House insists that it is. What role does the media play in setting the storyline to define debate? And in what ways are the two sides of this issue lobbying get to their voice hard?
EA: I think there is a whole series of stories that needs to be done that take the issues one by one: Is there a crisis? How serious is it? There are absolutely very strong reasons to say that there are real problems with Social Security. A lot of Democratic analysts and the Democratic trustee on the Social Security Trust Fund will not agree with that. There need to be articles looking at, is there a crisis and what's the nature of that problem? And what is the range of possible solutions? And I think that's one of the roles [journalists] ought to play here: breaking down the issues in a dispassionate way and also keeping people interested at the same time.
It's hard. One of the hard things about this subject is that it is rather dry and arcane. Some of the biggest disagreements are over seemingly obscure things that most people, including myself, really don't want to devote a whole lot of brainpower to in our relaxation time.
TL: Part of that question was in what ways are the sides lobbying to get their voice heard? Is there anything exceptional about lobbyists, interest groups, or politicians contacting you trying to get their voices heard?
EA: Well, we are just at the beginning of it. Any big political battle has these interest groups that pop up in publicity campaigns and lobbying campaigns. It goes with the territory. However, I think in [the case of] Social Security, I've always had the sense that there are really large groups waiting to act and mobilize on both sides. It does feel sometimes as if you're coming under fire from, if it's not one side, it's the other. And part of the reason for that is that [Social Security] affects vast numbers of people, but also some of the interest groups have been battling this for a number of years already. So they're pre-positioned.
TL: How is covering the Social Security battle different from past battles?
EA: Like a lot of other battles there are powerful interests pushing agendas with a lot of money at stake. The difference with this one is that the issues are complex enough that there is a huge opportunity for fudging over the truth of what is really at debate. So that is why I think, in this case, there is a real role for the media to play in dissecting the issues dispassionately because there is an awful lot of smoke and mirrors going on.
And not just on the Republican side. When Democratic groups imply that this is something you can put off for decades -- that's also a very dubious assertion. When people say, "Don't worry about it. The Social Security fund will not actually be exhausted until 2042 and even then Social Security revenues will be good for 80 percent of the obligations at that time" -- that's a misleading way to describe the situation.
TL: What's so misleading about that assertion?
EA: The misleading part of that [is that there] is a long term gap. The only question is, how much? The sooner you deal with it, the better and less painful it is. And part of that pain very well may be cutting back on future benefits. There is no question that the obligations lined up right now seem to exceed the revenues that people expect to come in, for demographic reasons and others. And each year that you put it off you run a serious risk of forcing more painful choices down the road. And what a lot of people are mobilized to oppose is any hint of reducing benefits. But that might be necessary. The debate needs to be honest and it is often not an honest debate. [Overall,] there's a huge opportunity for mischief in this. It just seems to be much more so than a lot [of other debates].
TL: How do you deal with the uncertainty of writing about an issue such as Social Security reform where the end result won't be known for years?
EA: That's a good point. I think we all have to keep reminding ourselves that we don't know what the future will bring. I as a journalist have to remind myself that I can get sucked into just taking as gospel truth certain visions of how the future will play out. I think that I've fallen victim to that in the past.
The one thing that I think we can do, as I've said to you, is at least figure out the changes that people are talking about or writing down. This stuff is there to be had. The kind of issues that I'm frustrated about -- the kind of issues that have been glossed over by the [administration] -- are not secrets. It's all there in black and white. If you look in the right places, if you talk to the people that are proposing different plans, it's all there. They aren't hiding it, they just don't necessarily emphasize [certain] things.
I think the administration has been glossing over the fact that these plans do involve significant cuts in the benefits to future retirees. They don't want to talk about it. They've been avoiding the issue of borrowing to avoid transition costs. [In turn] the Democrats have been avoiding the issue of the gap that the Social Security actuaries and trustees, and even the Congressional Budget Office, say is coming.
They haven't denied them, but they've been glossing over them.
TL: Finally, if you had to bet which will fold first, which would you put your money on: the Social Security system, or the Washington Nationals?
EA: The Washington Nationals will fold a lot earlier than the Social Security system. I'd be really amazed if they stayed here for 75 years.
