Myth Busting: The Greenspan Commission Didn’t Save Social Security


I don’t have a news hook for a post about the Greenspan Social Security Commission of 1983, but I was Googling around this morning for something else and happened to come across an old post from Pete Davis on the subject. The conventional wisdom about the Greenspan Commission is that it beavered away diligently for several months, produced a bipartisan plan to save Social Security from bankruptcy, and Congress passed it. Hooray! But Davis says this version of events is 180 degrees backward:

Mr. Greenspan and his fellow commissioners had met for months and were secretly deadlocked, despite optimistic public statements. Members of Congress were uniformly terrified of raising payroll taxes or cutting benefits, both of which obviously had to be part of any real solution. Then, one late afternoon, Pat Moynihan (D-NY) walked across the floor to talk to Senate Finance Committee Chair Bob Dole (R-KS). I couldn’t hear what they were saying, but it didn’t take a rocket scientist to realize the topic was Social Security. They cut the deal in broad outline right there, fed it to Mr. Greenspan, and left the details to his Commission.

So at the last minute, Republicans and Democrats locked arms around a plan “to save Social Security” by raising the payroll tax, to shave benefits, and to very gradually raise the retirement age on future retirees. President Reagan endorsed it, and the rest was history. Like a lot of bad economic theory, the idea that the Greenspan Commission solved the 1983 Social Security crisis has the causality backwards. Dole and Moynihan fed the deal to the Commission, not the other way around.

Then, in comments, Marc Goldwein says that even this account is too friendly to the Greenspan Commission:

Great blog post on how the 1983 commission was a cover. But even this post, I’m afraid, perpetuates some of the myth.

As of the beginning on 1983, the commission was all but dissolved. Understanding the dire political importance of not letting the trust fund run out of money, the White House then began a series of secret negotiations with Pat Moynihan and Former SSA Director Robert Ball (who was basically representing Tip O’Neill). I believe the White House representatives were David Stockman, Dick Darman, sometimes Kenneth Duberstein, and a fourth person.

Once they had agreed to a basic framework, then Dole was brought in, along with Alan Greenspan, James Baker, and Barber Conable. That group of nine or ten was eventually expanded further, to make sure they’d have the support of the leadership, organized labor, and enough commissioners.

Only then were the recommendations brought back to the commission to pass.

I don’t have any particular political point to make here. This just happens to be a piece of political mythology that I’d always vaguely accepted without knowing much about what really happened behind the scenes, and I’ll bet lots of other people believe it too. So I thought I’d pass along this little piece of myth busting.

OUR NEW CORRUPTION PROJECT

The more we thought about how MoJo's journalism can have the most impact heading into the 2020 election, the more we realized that so many of today's stories come down to corruption: democracy and the rule of law being undermined by the wealthy and powerful for their own gain.

So we're launching a new Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption. We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We'll publish what we find as a major series in the summer of 2020, including a special issue of our magazine, a dedicated online portal, and video and podcast series so it doesn't get lost in the daily deluge of breaking news.

It's unlike anything we've done before and we've got seed funding to get started, but we're asking readers to help crowdfund this new beat with an additional $500,000 so we can go even bigger. You can read why we're taking this approach and what we want to accomplish in "Corruption Isn't Just Another Scandal. It's the Rot Beneath All of Them," and if you like how it sounds, please help fund it with a tax-deductible donation today.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate