Jon Sawyer of the Post-Dispatch has a nice run-down of how the Social Security debate is shaping up in Missouri. The basic story, like most everywhere else, Democrats love talking about it, Republicans want to talk about anything but.
In a speech before a local Chamber of Commerce, Rep. Kenny Hulshoff (R) (better known to TPMers as one of the congressmen purged from the Ethics Committee in the Night of the Long Gavels) didn't even mention private accounts.
(ed.note: Note of thanks to TPM Reader DK for keeping us up to speed on the latest happenings across the country.)
--Josh Marshall
George W. Bush, 1978: "[Social Security] will be bust in 10 years unless there are some changes ... The ideal solution would be for Social Security to be made sound and people given the chance to invest the money the way they feel."
--Josh Marshall
Another blog serves up an inspired bit of pop culture riffing/criticism about the little tyke the phase-out forces have dragooned into joining the Bamboozlepalooza Tour.
--Josh Marshall
The Newark Star-Ledger says that Rep. Chris Smith (R) of New Jersey, recently-defenestrated Chairman of the House Veterans Affairs Committee, "said recently he does not support the creation of private Social Security accounts."
For the moment, we're entering Smith in the Conscience Caucus, on the basis of Star-Ledger reporter Robert Cohen's report. But we're curious to hear from anyone who knows how and when Smith stated his opposition.
The article also states that Rep. Michael Ferguson (R) of New Jersey, a Social Security bamboozler of the Heather Wilson variety, has announced that Pres. Bush will visit Westfield next Friday as part of the Bamboozlepalooza tour.
Finally, the Mobile Register reports that of the seven Republicans in the state's congressional delegation, six held no Social Security events during the congressional recess. The seventh, Rep. Terry Everett, had apparently gone so far to ground that he wouldn't even answer the paper's queries.
--Josh Marshall
In a townhall meeting on Social Security in Beverly Shores this week, Rep. Chris Chocola (R) of Indiana got a question many members have been getting this week. A constituent asked why we can't raise or eliminate the payroll tax cap as a way to strengthen the Social Security system and ensure its long-term solvency. Chocola responded, according to the local paper, that "that would buy about seven years but he is looking for long-term solutions."
Well, that's just not true. Or, if you want to say it's true because it's vague, it is nonetheless highly misleading.
Let me explain.
Earlier today we noted a new actuarial memo put out by the Social Security administration. The memo looks at 18 potential 'fixes' and examines how long each would extend the solvency of the program. For our purposes, we'll focus on #14, which looks at how the outlook would change if the payroll tax cap were eliminated (ed.note: The table in question can be found on page 18 of the linked pdf document.)
What does it say?
It says that whereas the Trust Fund is scheduled to be exhausted in 2042 under current law, this change would keep the system solvent through 2079 (ed.note: under SSA scoring procedures they don't go past 75 years, thus the date 2079).
In 2079, the Trust Fund would be shrinking. But measured as a percentage of the annual budget of Social Security it would be slightly larger than it is now. Now, I don't know about you but that sounds like it extends solvency considerably past 37 years, not 7 years.
Another way of putting this is to say that simply making this one change, getting rid of the cap, would extend the solvency of Social Security well beyond the lifetimes of almost anyone living today.
So what the hell is Chocola talking about?
Chocola is talking about the year that you have to start drawing money out of the Trust Fund, i.e., the 2018 date folks are always talking about.
Now, you might figure that the two numbers should be about the same -- put off dipping into the Trust Fund for seven years and you put off when it runs out of money by about seven years. But the Social Security actuaries' estimates show clearly that that is not true.
Now, two points. First, there are a lot of complexities and ins-and-outs behind those magic dates of 2018 and 2042. But as long as those are our benchmarks, removing the cap makes a very big deal. And Chocola isn't levelling with his constituents. Second, it's not just Chocola -- he's got his own unique portfolio of shenanigans we'll be discussing later. But this 'seven years' line is being used by virtually every Republican holding townhalls this week. And they are seldom being called on it. In fact, I bet will hear it several times on the Sunday shows. And I wonder if anyone will contradict it.
Late Update: I now see that Duncan Black (aka Atrios) has already been addressing this point -- particularly reporters' failure to call people on it -- in two excellent pieces (one and two) at Media Matters.
--Josh Marshall
Now Rep. McCrery (R) of Louisiana needs a helping hand?
Seems like just a few weeks ago McCrery was saying: "The AARP and the Democrats think if you divert some money from the trust fund [the existing program will be undermined] That is true on its face. It does decrease the level of the trust fund. Politically, that's going to be a very strong tool that (opponents) can use to defeat a plan."
Now he says he's eager to get to work doing just that.
And now President Bush says he's going to come to McCrery's district to spread the good news about private accounts.
But is McCrery happy to see him?
The announcement triggered this response from McCrery, who seems to have some odd rhetorical ambivalence wedged down deep in his soul: "This trip to Shreveport should be seen not having anything to do with my role in the process. It should be seen as another stop in the president's journey that there's a need for change in the Social Security system."
Just another stop on the president's journey to private accounts nirvana.
--Josh Marshall
Representative Tom Davis (R) of Virginia has been hovering around the edges of the Conscience Caucus for some time. We <$NoAd$>may even reevaluate his status. He hasn't so much expressed reservations on policy grounds. But he's close to a go-to-guy for the press when they want a quote from a Republican saying that privatization could be a disaster for the GOP.
Back on the 19th he told the LA Times: "The situation is fluid, but it has the potential to blow up. I'm going to keep my mouth shut." For which you can at least give him credit for a level of candor.
Here's a bit of an article that appeared yesterday in a local paper ...
"As a practical matter, 2018 is a tipping point," [Davis] said. "You don't want to be there because you'll be cutting education and defense. Every year you wait, it becomes a little tougher." Davis said he is not sure about private accounts, though he said they do not help the program's solvency.Ideally, he would like to avoid raising taxes to pay for social security and would also like to avoid cutting future benefits as well.
"I've got a healthy dose of skepticism," he said. "But I applaud the president for identifying the problems with the program."
Sounds like he's kind of on the fence.
We note that Davis is having townhall meetings tomorrow around the district -- in Falls Church, Fairfax and Prince William.
And these folks are holding a rally to greet him in Fairfax and ask him to stand up against phasing out Social Security.
--Josh Marshall
There's been some well-earned press about Deputy Social Security Commissioner James Lockhart's recent work barnstorming the country on behalf of private accounts. But let's not forget: He's also one of the seven signatories of Social Security's annual Trustees report. He serves as the Board of Trustees' Secretary; or at least he did for the past three years.
--Josh Marshall
They've got an angle?
The promo for the League of the South's new Grey Book: Blueprint for an Independent South says the book explains "How an independent South would handle the Social Security debacle."
Everybody wants to get into the act.
--Josh Marshall
An important new actuarial memo from the Social Security Administration. More to follow ...
--Josh Marshall
Remember those postings on Craig's List, purporting to be from the Social Security Administration and seeking participants for focus groups on Social Security privatization?
It seems like a case of fraud and of a rather serious sort.
This morning we received an email from a reader who had responded to the posting and got back an email explaining how to participate and giving him a form to fill out. On its face, the response and the form looked like about what you'd expect: some boilerplate about what the focus groups would be like and a form asking for various personal and demographic information about the potential participant.
The email was 'signed' by someone claiming to be from the Social Security administration.
Based on this I called the SSA press office early this afternoon. And an hour or so later I received a call back from Mark Lassiter, the press officer. Lassiter told me in no uncertain terms that these focus group postings and emails are "not being done by SSA or anyone working on SSA's behalf."
He went on to say that there are two main issues of concern to them. First, someone appears to be impersonating SSA personnel, which is a crime. Second, the fact that these follow-up emails are being sent out suggests that this is more than just an attempt to spoof SSA but possibly some sort of identity theft scam (the form requests name, birthdate, social security number, etc.)
Lassiter tells TPM that his office has requested that the SSA Inspector General investigate the matter.
--Josh Marshall
What's wrong with this picture?
Social Security has seven 'Trustees'.
Five of the Trustees serve ex-officio, i.e., they're automatically a Trustee because of their office -- like the Treasury Secretary, Labor Secretary, etc.
One of the two who were appointed directly is Thomas R. Saving. If you look here you'll see that he was a Trustee in 2004 and I've just confirmed with the SSA that he remains a Trustee for 2005.
Yet, according to this morning's Houston Chronicle, he has just signed on to be an advisor and spokesman for one of the lead pro-Social Security phase-out astroturf groups, Progress for America.
Are his duties as a Trustee compatible with going to work for Progress for America?
--Josh Marshall
John Harwood's squib on Social Security from today's WSJ Washington Wire (sub. required) ...
PRESSURE RISES on Social Security.A senior Bush adviser sees "ice breaking" around opposition of some Democrats to the administration plan. Fellow Democrats, chafing at Lieberman's flirtation with Bush, circulate his criticism of "risky private accounts" in the run-up to his 2004 presidential run.
Despite White House courting, Democratic Sen. Nelson of Nebraska is unlikely to embrace Bush's private-account plan, an associate predicts. House Democratic campaign committee seeks donations to fuel "caught-on-tape" drive to weaken Republican members by publicizing alleged flip-flops on the issue.
Plan B? Republicans insist Bush could "win" without legislation by hitting "anti-reform" Democrats.
On point one, I've watched this crew long enough to know the MO. So I don't think there's any <$Ad$>reason to believe this 'senior Bush adviser' is doing anything but talking out of an orifice other than his mouth. Their whole angle is say they're holding more cards than they are to push their opponents off balance.
But why not be careful? As we've said, I think two members of the Graham senate book club are looking to make a deal. And I think their angle is to fiddle with the payroll tax as a way to let their faint little hearts get to that Holy Grail of Faintheartedness, the prized private accounts. That's what they want to do and I think that's what they're trying to do.
I talk to various of Sen. Lieberman's political friends and we wonder between ourselves: What is it exactly? Is he just a man out of time now? Too stung by how the 2004 primaries went and just doesn't care what Dems think? Or maybe he thinks he's legislating for history here. A lot of folks who are generally in line with Lieberman, and like him, ended up not supporting him in the primaries because they worried not about his political views but about his political judgment. So the irony here is that he's displaying the same political tin ear and questionable judgment that kept many like-minded Dems from supporting him. And their very lack of support stung him so badly that it has accentuated those tendencies that kept them off the Joe team to begin with.
And remember, I'm not talking about John Sweeney or Andy Stern here. I'm talking about card-carrying New Dems.
Just this morning I was talking with some political players involved in the Social Security fight and they were wondering how quickly a few hundred thousand dollars of seed money could be raised to fund a decent primary opponent to run against Lieberman next year. And I have to say, I think they could raise it pretty quickly.
After half a decade without any senators to represent me, I'm happy to have two I can call my own again. And luckily, Schumer and Clinton are strong supporters of Social Security. But if I lived in Connecticut and my own senator ended up deep-sixing Social Security all by himself, I'd certainly support someone who challenged him. Actually, I'd happily see him replaced by a Republican if that's what it came to.
Millions rely on Social Security, a right earned through a lifetime of work. It's a compact between citizens and between generations. And like all truly good legislation it makes for good policy and good politics. One senator from Connecticut is a small thing when weighed in that balance.
He's the deal-maker. All the signs are showing it.
Sen. Lieberman's popular in Connecticut. But there must be some folks in Connecticut who support Social Security too.
--Josh Marshall
Lieberman promoted to Dean of Senate Faction!
Tells reporters America needs more faint hearts so we can all be friends!
(Okay, he didn't say that. But he has been promoted to Senate Dean.)
More to follow ...
--Josh Marshall
Rep. Aderholt (R) of Alabama a possible Caucus man?
Some interesting comments from the article: Aderholt "has yet to see much mail from constituents about it. He figures they're waiting to see the details. Most of the comments so far are coming from activist groups on both sides of the issue, he noted."
"There's not a lot of details of the president's plan out there. We certainly want to hear from our constituents. I've not committed to the president or the leadership what I would do." Later he says Social Security is meant to be a safety net. "If we take that away, it's defeating the purpose of Social Security. So many Americans today depend on Social Security as a major part of their income."
Here's the comments Aderholt made after coming back from a visit to the White House to hear the president's pitch on Social Security on February 9th.
If Aderholt does eventually join the Conscience Caucus, he'd join fellow Alabama Rep. Mike Rogers (R), who came in back on the 6th of February.
I'm curious whether Aderholt has really gotten as little feedback on phase-out as he claims. It's quite unpopular in the state. Even Sen. Richard Shelby (R) has made a series of skeptical statements about the president's plan.
Of the state's other House Republicans, Rep. Spencer Bachus seems most, as the Tuscaloosa News puts it, "in lockstep" with the Bush plan. A constituent letter we've seen marks Rep. Terry Everett as basically a phase-out man. And Rep. Jo Bonner (R) remains on the fence.
--Josh Marshall
In this article on Rep. Chris Chocola's Social Security meetings in his district this week, the author says Chocola (R) of Indiana starts by telling constituents he is there "to ask for ideas from his constituency about how to fix the Social Security situation." But as the article goes on to show, he then stands before the audience and shoots down everything his constituents suggest beside private accounts.
In this article from the South Bend Tribune, Chocola claims he has never been an advocate of privatization -- despite the fact that he is on record supporting privatization.
Actually, this one is really a doozy since the paper says that Democrats have "targeted Chocola, criticizing him for allegedly stating in the past that he would like to see the entire Social Security system privatized." Just why the 'allegedly' is in there is a bit hard to figure since the same paper on November 1st, 2000 quoted Chocola saying: "Bush's plan of individual investment of 2 percent of the money is a start. Eventually, I'd like to see the entire system privatized."
A July 25th 2002 article in the Tribune explains that Chocola has since tried to dismiss the quote by arguing that "he was 'conceptualizing' during the discussion with the Truth editorial board and did not then or ever call for privatizing the entire Social Security system." Here Chocola seems to have been trying to devise his own Social Security speech code in which saying "I'd like to see the entire system privatized" does not count as "call[ing] for" or "endorsing" complete privatization.
In any case, as you can see, Chocola is quite a piece o' work. And today he claims to have staked out the rather less controversial position of being an "an advocate for addressing the issue, getting all possible solutions on the table and getting beyond politics."
From what we can tell from recent reports from the district and from Chocola's tough stand as a proponent of "addressing the issue" his efforts to sell his constituents on phase-out isn't going that well. And we would be remiss if we didn't mention that the Chocola has never quite been a rock star at the polls. In 2002, he got in with a clean 50% of the vote (a Libertarian candidate pulled 4%). In 2004, he expanded his margin to a 54%. Not the end of the world but certainly not out of the woods either. For all of these reasons we were surprised and delighted to hear that President Bush has decided to come to town next Friday and give a speech on the glories of phase-out at Notre Dame, which is in Chocola's district.
So two points to watch over the next week. Will Chocola admit that he said "he would like to see the entire Social Security system privatized" and that he, presumably, wasn't in a trance when he said it? And will President Bush's trip get Chocola to come up with some clearer position than his current one of "addressing the issue, getting all possible solutions on the table and getting beyond politics."
(ed.note: One more thing. Chocola's original comment about wanting "to see the entire Social Security system privatized" came in a visit with the editors of the Elkhart Truth, a local paper. Yet the Truth isn't in Nexis (yeah, I'm chuckled too). Now, I assume someone from around there can get hold of a copy of the original paper version of the article or a copy of it on microfilm. What I'd like to get is a scanned copy of the original article, preferably a relatively clean one so the text is easily legible. A 'Privatize This' T-Shirt for the first TPM Reader who can get it scanned and send it on in to TPM world headquarters.)
--Josh Marshall
Let's be frank. Has anyone seen an article from anywhere in the country in which a Republican representative or senator has held a public meeting pushing Social Security privatization and not been greeted by an audience that appears either decidedly or overwhelmingly opposed? Most of the articles make some attempt to say that people could be found endorsing a variety of positions -- some favoring the president's plan, some not. But, again, I want to see how many articles there are in which it appears that the overall response to privatization was positive. I'm eager to see one.
--Josh Marshall
Do people laugh in Treasury Secretary <$NoAd$>John Snow's face when he says stuff like this ...
Snow said there are also economic benefits to the proposed changes. Businesses would not have to compete with the government to borrow money that might be needed to cover a Social Security deficit, there will be an infusion of investments to fund business expansion and job creation and payroll taxes wouldn't be raised.
Admittedly, Snow is not one of the more esteemed Treasury Secretaries in recent decades. But really, phase-out is going to lead to less government borrowing and free up capital for business expansion?
What about the three or four trillion dollars phase-out will cost over the next two or three decades? Even if you take the view that the government is going to borrow that money and then touch it to the heads of individual workers before compelling them to invest it in one of three or four government-administered low-risk investment funds, that hardly seems like a model for letting that capital find its most productive outlets.
Presumably, Snow is talking about that late 21st century Elysium in which everything comes out great in the end and all the debt just melts away.
--Josh Marshall
Treasury Secretary John Snow endorses big benefit cuts. Here's his line from Tampa today. "If you are 20 or 30, the system cannot deliver those benefits, it can't afford them. In other words, it can't deliver on the promise."
It's a policy decision whether we choose whether or not to phase out Social Security. Snow is saying it's not in our power to keep Social Security intact for those retiring in 30 or 40 years. Not true. We can make changes that will keep the program solvent through all through those people's retirement. Indeed, it is possible that it will continue on through their retirement even if no changes are made.
Snow is saying phase-out is inevitable so he can duck responsibility for conceding that it is the policy he prefers.
--Josh Marshall
I was starting to wonder when someone was going to start pressing this point. It seems like half the high-profile Republican Social Security townhalls we cover ends up having Deputy Social Security Commissioner James B. Lockhart III there to preach the phase-out gospel. The Times has a piece on it Friday.
--Josh Marshall
We're always on the look-out for companies making shrewd investments and acquisitions. So today we were interested to see the latest news about Chinese computer manufacturer Lenovo and their on-going effort to purchase the PC division of IBM.
A couple months ago Lenovo and IBM agreed to the purchase. But, as you might imagine, US regulators have serious concerns about the potential for industrial espionage (and, I would assume, good old-fashioned espionage espionage too) given that IBM is one of the leading US computer manufacturers, as well as a center of high-tech research.
According to today's report from Bloomberg, US regulators still aren't satisfied that IBM and Lenovo have dealt with the national security concerns surrounding the deal and have yet to sign off on it.
Now, I had actually heard a while back that Lenovo's stock had gone up on the first news of the regulatory hold-up because the IBM PC division's profit margins are so thin and investors question whether Lenovo should be buying the thing in the first place.
So what's the shrewd acquisition?
Well, I don't know about Lenovo. But IBM knows what's up. They just went out and bought Bruce Mehlman to grease the wheels of the federal bureaucracy and get the deal done. And that's quite an acquisition since Bruce is the brother of Ken Mehlman, Chairman of the Republican National Committee and Chairman of President Bush's successful reelection campaign.
In other words, Bruce's brother is arguably the man most responsible for the president's reelection after Karl Rove. So I figure he gets his calls returned and doors get opened, maybe even export restrictions.
All I can think to say is: Brad Card, stay by your phone.
--Josh Marshall
O'Neill Marketing Company has now posted a note about their current relationship (or rather, lack of a current relationship) with USANext. Since we've discussed this at some length, I've posted the relevant portions here ...
As a result of the recent press coverage of United Seniors Association, (now USANext) and the ensuing questions, we thought it might be helpful to clarify and answer the following:1. O’Neill Marketing Company, (OMC) has no relationship with USANext, does not provide list-marketing services to them and has not done so for many months.
2. OMC was partnered in 1999 with United Seniors Association, but I acquired full ownership, buying out their interest in 2002 and severed the partnership.
3. OMC was a sublessor in suite 450A, 3900 Jermantown Rd. until October 2004 when we moved to suite #300, an Executive Suite. Any remnant phrases referencing the earlier occupied suite, 450A, was simply oversight we have corrected on our site.
More to <$NoAd$> come.
--Josh Marshall
Rep. Capito (R) of West Virginia: "I see this as another issue where I've got to weigh what's best for my constituents and how they want and then consider what I think is good policy and what the president wants. You'd hope they'd be along the same lines, but that doesn't happen all the time ... There is a problem, and I do think personal savings accounts is something we should look [at]. Unfortunately it's become so politicized and there's been so many lines in the sand drawn, I'm not sure what kind of life it's going to have."
What's best for the constituents versus what the president wants. Interesting way to put it.
See excerpts from this radio interview today.
(ed.note: Note of thanks to TPM Reader AK.)
--Josh Marshall
Campaign for America's Future goes to bat against Rep. McCrery (R) of Louisiana and hits a triple. Picked up in the Times, the Hill and the Times-Picayune.
See CAF's ad about where McCrery gets his money and who he works for, here.
Rep. McCrery, you'll remember, is the new chairman of the House Ways & Means Social Security Subcommittee who was a down-the-line phase-out man, then hopped into the Conscience Caucus for a few days, then recanted after a self-criticism session at the White House.
I think we know who this fellow works for ...
--Josh Marshall
Cincinnati Enquirer on Rep. Portman's (R) Social Security townhalls in the district: "Pension-reform idea a tough sell."
(ed.note: Thanks to TPM Reader SS for the tip.)
--Josh Marshall
I was not aware of this. But apparently Georgia Republicans are gearing up for a double-dip, mid-decade redistricting a la Texas 2003. Only they don't even have the fig leaf excuse Tom DeLay had.
Georgia Republicans, making Tom DeLay look good.
Deep-dyed Georgian Ed Kilgore has more.
--Josh Marshall
Courtesy of TPM Reader ECK, here's the full text of Administrative Law Judge Steven T. Kessel's ruling upholding the half million dollar fine against United Seniors Association, aka USANext, for sending deceptive mailings intended to fool seniors into believing they were official correspondence from the Social Security Administration.
One of many choice quotes, this one on USANext's persistence as a scofflaw: "[T]he SSA I.G.'s enforcement efforts in this case did not spring fully formed from a blank background. There was a long history of discussion between the SSA I.G. and Respondent [i.e., USANext] in which the SSA I.G. struggled vainly to convince Respondent to curb its practices of sending potentially deceptive mailings to senior citizens. Respondent had been warned on several occasions by the SSA I.G. that its conduct verged on violating or violated the Act. It chose to ignore these warnings."
--Josh Marshall
TPM Readers report in from the field <$NoAd$> on Suite 300 ...
Well, since I work near to 3900 Jermantown Rd I decided to walk over there, in the snow, to check it out.The directory on the first floor does have "United Seniors Association, Inc" as suite 450. And "O'Neill Marketing Company" as suite 300. Neither address bar seemed to be newer than the rest really.
A quick trip to the 3rd floor found that, in fact, suite 300 is just a large suite with many different companies in it. There's a central reception area and hall ways leading to doors with the names of the businesses on them.
The 4th floor had a door labeled "United Seniors Association Inc Suite 450". That's it. I assume that any sort of suite 450A would have had to been inside suite 450, as I did not see any lettered suites while I was in the building.
My best guess is that they split off some time ago and they were slow to update their website.
BP
---
I work near O'Neill marketing, so I took my lunch hour to go check them out. I would call it a case of a mouse roaring.
3900 Germantown Rd is a little four story building near Fairfax City. In the lobby, on the orientation board, O'Neill is listed as occupying suite 300, as are about 25 other organizations. The building didn't look that big from the outside, so I trooped upstairs to check out suite 300.
Turns out 300 is an incubator. You know the type: start-ups go there, lease some space, share the cost of paying a receptionist, share the copier, share the coffee machine. I am not demeaning organizations that occupy such places. My former company started at one and is now doing quite well... good way of keeping down overhead.
A nice person in the elevator told me that 300 is a kind of "mish-mash" of things; people come and go all the time.
USA is indeed listed in 450, but, how can I put this? They aren't welcoming visitors.DM
The small print on our "Privatize This!" t-shirts reads: "Eyes and Ears on Loan to Talkingpointsmemo.com". So we'll be sending one to both BP and DM.
--Josh Marshall
So who's holding Social Security meetings in their district?
Well, in New York state apparently no one with an 'R' after their name.
In This Together is a pro-Social Security coalition in New York (here's a list of the organizations in the group). Alex Navarro is the group's communications director; and he tells me that as near as they have been able to ascertain not one Republican in New York state is holding a meeting this week.
Democrats, lotsa meetings. Republicans, no meetings. Hard to imagine.
One of the things that makes it hard to find out precisely is that Republicans who are holding meetings don't seem too eager to publicize them. And Navarro makes clear that this was what they could figure out "from a round of calls to their offices at the end of last week."
So, if anyone knows different, do let us know. But until we hear otherwise, New York may be the Empire state. But it ain't got no Republican gladiators.
--Josh Marshall
Did they pay up or slip the noose?
This from an August 2003 bulletin from the Social Security Administration ...
Penalty Upheld Against United Seniors Association, Inc. [aka USANext] for Misleading AdvertisingJudge Denies Appeal of $554,196 Civil Monetary Penalty
On August 8, a Department of Health and Human Services (HHS) Appeals Board Administrative Law Judge (ALJ) issued a ruling upholding the imposition of a $554,196 civil monetary penalty against the United Seniors Association, Inc. (USA Inc.). The ALJ found that USA Inc. violated Section 1140 of the Social Security Act, which protects Social Security program words and symbols from being used in a misleading manner. Over the course of several years, USA Inc. mailed solicitations to senior citizens in envelopes that appeared to be from, approved, endorsed or authorized by SSA. USA Inc. targeted these solicitations to senior citizens with envelopes that included such terminology as “SOCIAL SECURITY ALERT” in prominent, red type. USA Inc. consistently refused to cooperate with OIG’s compliance efforts over the course of 5 years. Therefore, OCIG proposed the penalty, and the parties had a full evidentiary hearing in April 2003. The ALJ’s August 8th ruling found that: USA, Inc. had “deliberately contravened the law,” the $554,196 penalty was reasonable, and USA’s envelopes created a “serious threat to the ability of the Social Security Administration to communicate freely with the public.” USA Inc. has the right to appeal the ALJ’s decision to the full HHS Departmental Appeals Board.
First-class outfit that Charlie Jarvis is running<$NoAd$>.
(ed.note: Thanks to TPM Reader XM.)
--Josh Marshall
Chris Matthews and Charlie <$NoAd$> Jarvis last night on Hardball ...
MATTHEWS: Who is O‘Neill Marketing?JARVIS: O‘Neill Marketing is a list company, a list rental company.
MATTHEWS: And where are they located?
JARVIS: They‘re located in Fairfax.
MATTHEWS: Where are you located?
JARVIS: In the building where we are, yes.
MATTHEWS: How close is their office to your office?
JARVIS: Three floors.
MATTHEWS: Three floors?
JARVIS: Yes.
MATTHEWS: And what is your connection?
JARVIS: No connection at all now. When I first came in, 2001, USA, then known as United Seniors Association, did own...
MATTHEWS: And what is O‘Neill known for, advertising firm?
JARVIS: Basically just direct mail list rentals. That‘s it. They‘re not an advertising firm.
And as long as we're on the subject of USANext, apparently a couple years ago the Social Security Administration had to get a judge to issue a cease and desist order to stop Jarvis's outfit from sending out direct mail intended to "mislead the public into believing the mail is officially sent or approved by the Social Security Administration." That's quite a badge of honor. Are they still under that court order?
--Josh Marshall
Here's the question I'm curious about. In this week's congressional recess, who's holding meetings and who's not?
We note that Rep. Thaddeus McCotter's (R) spokesperson says the congressman is spending the break "catching up on paperwork."
Say what you will about Sen. Santorum (R), Archduke of Privatization, but he ain't hiding. He may be getting his head handed to him this week in Pennsylvania. But he's out there making his case to some pretty unfriendly crowds.
But which representatives and senators have simply gone into hiding? And I'd define that as either holding no public forums or holding ones with access restricted to supporters.
--Josh Marshall
USA Today gives a run-down on President Bush's courtship of current and former members of the Fainthearted Faction.
--Josh Marshall
A tad more on the 'membership' of the United Seniors Association (USA).
At least as far back as 2002, USA has claimed a membership of 1.5 million.
(There are numerous examples. But just for reference, see National Journal, Dec. 7, 2002 and Newsday, August 4, 2002. An example of the identical claim from the 20th of this month can be found here in the Washington Times.)
Yet if you look at their 2001 and 2002 '990s' (the public tax filing for a 501c4), they list no income from membership dues.
Specifically, on the 2002 form, look on page 3, question 3 ("Membership dues and assessments") and no number is entered. Not even a zero; it's just blank.
Yet in the 2003 filing, on the same line, question 3, they list $1,204,172.00. (The 2003 filing is the most recent available.)
So, in two successive years in which the group claimed the same number of members, revenues from membership fees went from $0 to $1.2 million.
Now, what happened there exactly?
The membership levels purportedly remained the same. So I guess we could posit that membership dues were hiked from 0 cents to, say, 75 cents per annum. But somehow that doesn't sound quite right. So what happened?
Here's one thought that might be worth pursuing.
Remember that these filings are made in the following calendar year. So the 2002 990 was prepared in 2003, and so forth. Now, one thing that happened over the period in question is that United Seniors Association's apparent lack of any real membership started getting attention in the press. In fact, the article in the Washington Monthly I cited yesterday would have appeared about two months before the 2003 990 was filed.
--Josh Marshall
Wow, ahht's bold.
If you've been reading this site for any length of time you've probably noticed that we tend to save copies of pretty much everything we refer to on the web since the juiciest stuff tends to disappear pretty quickly.
But O'Neill Marketing Company came up with a switch that really hadn't occurred to us.
You'll remember that last night we noted that O'Neill shared space with the Republican astroturf 'seniors' organization, USANext/United Seniors Association. Both were located at 3900 Jermantown Road, Fairfax, Virginia.
USA listed Suite 450; OMC listed Suite 450A.
But apparently last night was a pretty serious all-nighter for the folks at O'Neill. Because, as of today, they're located not in Suite 450A but (downstairs?) in Suite 300.
Here's Google's version of their 'about' page as it appeared prior to today with the old address and here's new one with the new address.
Late Update: As quite a few TPM Readers have now pointed out, Suite 300 turns out to be an awfully popular place. In fact, as you can see here, there seem to be enough businesses operating out of that suite that suite 300 might need its own trade organization or PAC. Is suite 300 the mailroom?
--Josh Marshall
Did Charlie Jarvis fib today on Judy Woodruff's <$NoAd$>show?
Here's how the interview started...
WOODRUFF: First of all, Charlie Jarvis, USA Next, funded by whom?CHARLIE JARVIS, CHAIRMAN, USA NEXT: We receive our funds from our base of 1.5 million individuals. Also we aggressively go after the support of very strong pro-free market businesses, business groups, associations, we're pretty aggressive about looking for free market supporters.
Unfortunately, Woodruff didn't follow up, and the answer stood.
But is it true?
A May 2004 article in The Washington Monthly says that though ...
USA claims a nationwide network of more than one million activists ... [it] listed zero income from membership dues in its most recent available tax return (emphasis added).
Given the date of the article, presumably the reference is to the 2002 return. And the MO certainly could have changed since then. But I'd say the ball's in Charlie's court.
--Josh Marshall
Earlier this evening we brought you the news that Craig's List had a listing, purportedly on behalf of the Social Security Administration's Office of Communications, asking for partipants for a series of focus groups on selling privatization.
As a slew of readers have now informed us, the ad has just been pulled.
Needless to say, we made a copy.
Late Update: The ad is still up in the Philly Craigslist.
--Josh Marshall
Rep. Harold Ford (D) of Tennessee is insisting again that his position on Social Security is being misunderstood or distorted. And this time, I think he's right.
Yesterday Knight Ridder ran a story on former Treasury Secretary Paul O'Neill's plan to create individual investment accounts for children at birth, each of which the government would endow with $2,000. O'Neill says this is a way to deal with what he calls Social Security's unfunded liabilities. And, according to Knight Ridder, he "says his approach would eliminate the need for Social Security and Medicare."
In other words, O'Neill's a phase-out man, if one with a different sort of plan than the president's.
Later on in the article, the author writes that Ford last year introduced "a bill that amounts to a scaled-down version of O'Neill's proposal." And from that many have drawn the not-unreasonable assumption that Ford is trying to hop back on the phase-out bandwagon.
But the connection which is at least implied in the article is false.
The bill being referenced is that so-called ASPIRE act, which is similar in key ways to O'Neill's idea. The difference, however, is that it is meant to be in addition to Social Security, not a substitute for it. It doesn't take any money out of Social Security and isn't intended to replace it.
This afternoon, Ford put out a statement in which he said his ASPIRE Act would create a new savings vehicle for middle class families while ...
at the same time preserving Social Security and Medicare. Any assertions to the contrary are just wrong. ASPIRE would not be subsidized by Social Security, nor would it replace Social Security, despite the rhetoric of those who say it would. Those of us who support creating savings and investment vehicles for hard working Americans should not link those efforts with President Bush's plans to privatize Social Security. Any effort to link the funding of aspire to replacing Social Security or diverting funds from Social Security or Medicare to fund ASPIRE is not true.In recent days, former Treasury Secretary Paul O'Neill has urged the creation of private accounts that would replace Social Security. His proposal is very different than President Bush's plan, but equally wrong in that he seeks to end Social Security as we know it. In short, the ASPIRE Act is very different than what former Secretary O'Neill is proposing. In our zeal to oppose President Bush and his Social Security privatization plan, let us be careful to not oppose savings and investment vehicles that will supplement Social Security, not destroy it.
It may look like Ford's just trying to distance himself from O'Neill's phase-out scheme now that he's now taking fire. But it seems pretty clear to me that this was just a bum rap from the beginning. ASPIRE does have bipartisan support. But it's not a phase-out bill. And Rep. Patrick Kennedy (D) and Sen. Jon Corzine (D) were co-sponsors too.
As you might imagine, we've got our eyes on every former member of the Faction to spy out any signs of recidivist Faintheartedness. But this isn't it.
--Josh Marshall
From Craig's List .<$NoAd$>..
The Social Security Administration Communications Division is organizing a series of focus groups to solicit feedback from the public on preliminary marketing/communications materials, particularly those related to the privatization or partial privatization of Social Security.Participants will be compensated $175 upon the completion of a 20-minute individual interview and a 45-minute group interview with other participants.
Applicants for the focus group must be U.S. citizens over the age of 18. Additionally, they must flexible with scheduling, comfortable providing honest feedback, and capable of asserting their opinions even if they contradict those of other participants.
For more information about the opportunity or to request an application, please respond to this post.
Thanks!
Has SSA really authorized this?
--Josh Marshall
Ahhhh ... the Young Republican Phase-Out Singers, serenading that ArchDuke of phase-out Sen. Rick Santorum (R) of Pennsylvania yesterday. True, probably not the ideologically-correct castrati, but fitting the part nonetheless.
As Chris Bowers first reported yesterday, outside one of Santorum's townhalls yesterday on Social Security a gaggle of college Republicans got up a chorus of "Hey, hey, ho, ho, Social Security's got to go."
Apparently, effective deceit and concealment is a late-onset trait of homo republicanus.
Bowers said that CNN had caught it live to air. And late last night I unsuccessfully searched around their transcript page seeing if I could find it. But now a Pennsylvania political candidate has gotten hold of the footage and you can see it in all its phase-out glory right here.
--Josh Marshall
Hmmm ... So is USANext, aka United Seniors Association, aka Americans Lobbying Against Rationing of Medical Care, USA, really just a Republican party front operation operating at the behest of Karl Rove?
Well, let's see.
BBB Wise Giving Alliance, a rating and reporting bureau for public charities and nonprofits, notes that one of United Seniors Association's (USA) "affiliates" is O'Neill Marketing Company (OMC).
Apparently, it's a very tight affiliation since both are located at 3900 Jermantown Road, Suite 450. (USA lists Suite 450; OMC lists 450A).
Despite my now living in New York I sometimes still feel the need to translate from Beltwayese into standard English. So in this case, in DC-speak we would say that United Seniors Association is 'colocated' with O'Neill Marketing Company whereas in standard English we would say that United Seniors Association 'is' O'Neill Marketing Company.
O'Neill's front page lists its first selling point as: "We are a 'marketing' department for our clients, as if we were right down the hall."
And I guess they're really not kidding about that one.
OMC's other clients include ...
National Republican Congressional Committee
Republican National Committee
Republican Governors Association
Empower America/Citizens for Sound Economy
(ed.note: Special thanks to TPM Reader DMK.)
--Josh Marshall
The Concord Monitor charts the flips and flops of former Conscience Caucus member Rep. Jeb Bradley (R) of New Hampshire.
Along those lines we've been wondering if there might be a need for a whole new grouping in the Social Security debate to handle those members of the House Republican caucus who are neither for the president's proposal or show clear signs of opposing it but rather have a strategy of spinning around like a whirling dervish with endless 'privatization' playbook linguistic flimflam in the hope that by the time they finally collapse into a sweaty exhaustion everyone will have gotten tired of trying to figure out what they're saying and simply have left.
It would help us find a place for the likes of Rep. Bradley and a few others we're watching.
We figure either 'switch-hitters' or 'invertebrates'. But we're still considering other options.
--Josh Marshall
Business economists show liberal bias: "Fewer than one in four top U.S. economists think the Bush administration will succeed in pushing through an overhaul of the Social Security retirement system this year a survey released Tuesday showed. 'Only 24 percent expect the partial privatization of Social Security to be passed by Congress this year,' a panel of 37 forecasters, who are members of the National Association for Business Economics, concluded."
--Josh Marshall
Are you a registered Democrat?
Are you currently employed as a United States Senator?
Are you thinking of cutting a deal with Sen. Lindsey Graham?
If you can answer 'yes' to these three questions, read this.
--Josh Marshall
Strong in support?
North Carolina's junior senator, Richard Burr (R) at a Reagan Day dinner on Monday: "I take the president at his word, as I think the American people should. Ages 55 and over, they don't have anything to worry about. It won't change. So given that, what's wrong with a national debate about whether we change it for everybody else or at least allow them the option of choice?"
Can't we all just get along?
--Josh Marshall
Rep. Kevin Brady (R) of Texas gets an earful in the district: "His two trips in Montgomery County Tuesday encountered many people who aren't in favor of significantly altering the program, especially when it comes to diverting a portion of the current payroll taxes into private accounts."
To his credit, Brady is one of the ones who's actually holding public meetings on Social Security this week. Here's where they're being held.
Says Brady, at the end of the article: "I think there will have to be some sort of compromise. That's why I'm traveling around listening to everyone's plan. Sometimes you have to do what's right even if it's not popular ... I want to hear the president's plan, I want to hear the AARP plan, I want to hear the Democrats' plan. We'll probably all have to get off the cable TV stations for five minutes and talk to each other to work it out."
Can't we all just get along?
--Josh Marshall