Press Release: Hatch Calls Out Senate Democrats’ ‘Manufactured Controversy’ on Obama Trustee Nominee

Senate Finance Committee Chairman Orrin Hatch (R-Utah) took to the Senate floor to detail dangerous accusations made by Senate Democrats regarding one of President Obama’s nominees to the Social Security and Medicare boards of trustees, saying that the allegations are fundamentally false and pointing out that Democrats are stalling one of their own party’s nominees to an important entity charged with overseeing our nation’s entitlement programs.

“My friends on the other side of the aisle have unfortunately injected needless politics into Social Security trustee reports, and have threatened the integrity of those very reports with their allegations, as well as attacking an individual based on false claims,” Hatch said. “These tactics are, in my view, shameful and they have little to do with protecting the promise of Social Security.  Instead, they are 100 percent political, designed to serve as a proxy for what political operatives hope will be an epic campaign battle over Social Security.  And, as is too often the case, the truth has taken a backseat to campaign talking points and fundraising efforts.”

Hatch went on to detail how the trustees reports, which are scheduled to be released tomorrow, have historically been void of partisanship.

“Thanks to a bipartisan desire to have the facts on Social Security’s trust funds reported objectively and honestly, we had gone for decades with trustee reports that were largely free of political controversy,” Hatch continued.  “Unfortunately, some of my friends in the Senate, spurred on by their activist political operatives, seem to no longer have that desire.  It would truly be sad, and not in the interest of current or future Social Security beneficiaries, if trustees reports now become mere political documents.” 

Prior to the speech, Hatch sent letters to members of President Obama’s cabinet who serve on the board of trustees seeking clarification on Senate Democrats’ concerns for the nominee. 

The letter to Department of  Treasury Secretary Jack Lew can be found here.

The letter to Department of Health and Human Services Secretary Sylvia Burwell can be found here.

The letter to Department of Labor Secretary Thomas Perez can be found here.

The letter to Acting Commissioner of Social Security Carolyn Colvin can be found here.

The complete speech, as prepared for delivery, is below:

Mr. President, a few weeks ago, I came to the floor to discuss the situation surrounding President Obama’s nominees to serve as public trustees on the boards of trustees for the various Social Security and Medicare trust funds.  At that time, I noted that these nominations had become the center of a political firestorm. 

Sadly, that firestorm has continued in the weeks since I last spoke about this issue.  While I have little desire to delve into what is essentially a manufactured controversy, I do want to take some time to note how some events taking place this week should impact this particular debate. 

Tomorrow, the Social Security and Medicare boards of trustees will release their annual reports, providing their assessment of the past, present, and projected future financial conditions of the trust funds.  For decades, these reports have largely been devoid of politics, which is important because it allows policymakers and the general public to trust the numbers that are reported. 

Currently, there are four senior Obama Administration officials who serve as trustees on these various boards.  There are also two positions for public trustee, one from each party according to the law, that are currently vacant.  While it’s not unheard of for the boards to issue their reports without confirmed public trustees in place, this administration has issued more trustee reports with vacancies in the public trustee positions than any other administration.

Mr. President, in a recent article in the Huffington Post, Senators Warren, Schumer, and Whitehouse put forward some serious allegations of political tampering with recent Social Security trustee reports, stemming, according to their arguments, from the supposed undue influence of one particular public trustee.  That trustee, Dr. Charles Blahous, has been re-nominated by President Obama.

Specifically, these Senators alleged in their article that, due solely to the presence of this single public trustee on the board, nefarious assumptions were somehow inserted into the trustee report analysis leading the report to overstate the financial challenges facing Social Security.  My good friend Senator Schumer echoed the very same allegations in a recent Finance Committee markup where we favorably reported President Obama’s nominees for public trustee. 

In the words of these prominent and outspoken Senators, the 2014 Social Security trustee report, “curiously incorporated a number of assumptions playing up the potential future insolvency of the program—a key talking point in the right-wing war on Social Security.”  Moreover, according to those Senators, the assumptions “were so troublesome that the independent Chief Actuary for Social Security took the unprecedented step of writing a public statement of actuarial opinion disagreeing with the report.”  They go on to say that “after similarly questionable elements appeared in the 2015 report, the Chief Actuary repeated this extraordinary public rebuke.”

These assumptions – and Dr. Blahous’s very presence on the board – are, according to my colleagues, part of an effort funded and directed by the infamous Koch Brothers to dismantle Social Security and further an anti-government agenda.

In fact, their article was ridiculously titled: “The Koch Brothers are Trying to Handpick Government Officials. We have to stop them.” 

Mr. President, these are serious allegations that call into question the integrity of the annual trustee reports.  Yet, my colleagues have stated these allegations repeatedly in various forums, from committee hearings to Twitter feeds to campaign fundraising materials, all without any apparent regard for these implications. 

Worst of all, the charges are also patently false and they cannot be supported by fact, reason, or even common sense.  

Setting aside the almost paranoid and conspiratorial tone my colleagues have used when making these claims and even assuming, for the sake of argument, that supposedly questionable assumptions were baked into those trustees reports, there is simply no remotely possible way that they were used solely because of Dr. Blahous’s influence.   

Given the structure of these boards, if a single public trustee was able to have such a pernicious influence on assumptions incorporated into the reports that warranted some sort of alert from the Chief Actuary, then all of the other trustees—Treasury Secretary Lew, Labor Secretary Perez, Health and Human Services Secretary Burwell, Acting Commissioner of Social Security Colvin, and the Democratic Public Trustee Robert Reischauer—and their staffs, were either complicit in the perverse distortions or were too incompetent and powerless to detect them.

In other words, though they conveniently overlook these facts, when my colleagues publicly indict the integrity of the Social Security trustees reports, they are implicitly and necessarily calling into question the competence and efficiency of senior members of President Obama’s cabinet, and really that of President Obama himself who re-nominated Dr. Blahous to serve a second term.   

Of course, being honest about the makeup of the board and the process by which these reports are compiled would make fundraising emails and campaign commercials, not to mention inflammatory entries on a Senator’s Twitter feed, far less compelling.  Recognizing this, my colleagues have opted to simply imply that Dr. Blahous was solely responsible for allegedly questionable contents of the reports, apparently hoping no one will fact-check their assertions.

Sadly, no one from the Obama Administration has stepped forward to defend the President’s nominee and refute these wild claims.  More curious, however, is the fact that no one from the administration has publicly come forward to defend themselves from these Senators’ charges of apparent incompetence and powerlessness in the face of Dr. Blahous’s dastardly influence.  

I think we need a clearer picture of what went on in the compiling of those reports.  In order to clear the air on this, I sent letters earlier today to the each of the administration officials who sit on the board to see if they agree with the claim that the reports they all willingly signed included some unwarranted assumptions designed to undermine Social Security and requesting that they provide me with a full briefing on the issue. 

Of course, the absurdity of my colleague’s claims goes beyond their implicit condemnation of members of President Obama’s cabinet, because these senior official were not the only line of defense standing between the report and the alleged conspiracy to take down Social Security. 

If these reports included some pernicious assumptions, they didn’t only slip by the Secretaries of Treasury, Labor, and HHS and the Acting Social Security Commissioner, they must also have had to slip the notice of ten members of the 2015 Technical Panel on Assumptions and Methods, which was commissioned by the Social Security Advisory Board and contained many recognized and highly respected experts, including a Nobel Prize winning economist. 

In other words, Mr. President, the pernicious and allegedly billionaire-inspired assumptions that a single public trustee was somehow able to covertly insert into multiple trustee reports in order to overstate Social Security’s financial challenges were so cleverly advanced that they eluded prominent Obama Administration Officials, their staffs, ten highly-skilled experts researchers, and the Social Security Advisory Board staff.  And only the Chief Actuary was able to detect the skullduggery. 

That’s still not the end of it, however.

The nonpartisan Congressional Budget Office (CBO) has also produced forecasts of Social Security’s finances, using some assumptions that differ from those used by the trustees for their reports, but which identify even greater financial challenges to the Social Security trust funds than those concluded in the recent trustee reports.    

According to Senators Warren, Schumer, and Whitehouse, Dr. Blahous, serving as an agent for the Kochs, was able to skew the trustees reports with nefarious assumptions as part “the right-wing war on Social Security” to play up the potential future insolvency of the program.  Even so, Mr. President, he apparently wasn’t diabolical enough, because he ended up duping the other trustees into assigning lesser financial challenges to Social Security than those seen by the CBO. 

Of course, perhaps my colleagues believe that this anti-government conspiracy has somehow infiltrated CBO as well.  If that’s the case, perhaps they should come forward and reveal to the public just how deep this rabbit hole goes. 

Needless to say, none of this is sensible.  It doesn’t even pass the laugh test, Mr./Mme. President. 

And, Dr. Blahous’s influence on the trustees’ reports isn’t the only thing my colleagues have overstated in their writings, tweets, and campaign materials.  They also dramatically overstate the “rebukes” issued by the Chief Actuary for the 2014 and 2015 reports. 

In truth, there actually were no rebukes or disagreements included in the actuary reports.  In fact, for both years in question, the Chief Actuary wrote that: “the assumptions used and the resulting actuarial estimates are, individually and in the aggregate, reasonable for the purpose of evaluating the financial and actuarial status of the trust funds, taking into consideration the past experience and future expectations for the population, the economy, and the program.”

There were caveats, which largely reflected the Chief Actuary’s own opinions, but nothing that would call into question the integrity of the reports as my colleagues claim. 

As I’ve said in the past, these tactics are, in my view, shameful and they have little to do with protecting the promise of Social Security.  Instead, they are 100 percent political, designed to serve as a proxy for what political operatives hope will be an epic campaign battle over Social Security.  And, as is too often the case, the truth has taken a backseat to campaign talking points and fundraising efforts.

Rather than engage on the substance of their preferred Social Security policies – and those of their presumptive presidential nominee – my friends have opted to put forward false assertions and allegations that cannot be supported by the facts in order to attack a nominee’s integrity and further a twisted story about supposed Republican efforts to “privatize” Social Security and “turn it over to Wall Street.” 

Mr. President, it’s not hard to see why some of my friends on the other side, and their political allies in the activist community, want to construct this type of conspiracy with regard to Social Security.  After all, in recent years, the only meaningful advancement to prolong the life of any Social Security trust fund took place last year under a Republican-controlled Congress.

Last year, Republicans put together a bipartisan package to avert benefit cuts for disability insurance beneficiaries.  At best, Democrats only reluctantly came on board.  That package, which President Obama signed into law, contained no “privatization.”  And, the only thing close to a “benefit cut” was a provision on retirement benefit claiming strategies based on provisions put forward in President Obama’s budget. 

Yet, rather than help avert benefit cuts for disabled American workers and improve the disability insurance program, many of my friends on the other side spent most of their energy last year raising campaign money by scaring Social Security beneficiaries and giving speeches claiming that Republicans wanted to do nothing more than privatize Social Security and turn it over to Wall Street.

Even with these constant attacks and distortions coming from my friends on the other side throughout 2015, Republicans constructed a package that enacted the most meaningful reforms to Social Security in three decades and averted massive benefit cuts, and we did so dragging most Democrats along kicking and screaming.  So, it’s not surprising that my colleagues are feeling a pressure to reassert their claims of ownership of all things Social Security in this election cycle.   

By the way, in the midst of that 2015 debate, a prominent Democratic Senator gave a speech at the headquarters of a left-wing advocacy group – one that happens to receive funding from a noted leftist billionaire – warning of “attacks from the far right” on Social Security, and “back door attempts to dismantle and privatize Social Security by discrediting disability insurance.”  Curiously, that same event was attended by the Chief Actuary of Social Security, who was also a speaker at the event, and live-tweeted by the Social Security Administration. 

Yet, no one from the Republican Party published any inflammatory articles accusing the Chief Actuary of using his title or position in association with a politically partisan event.   No one accused him of “burnishing his credentials” by speaking at a highly partisan event. 

Certainly no one made claims of a vast leftist conspiracy to plant progressive sympathizers in influential positions in order to advance a leftist view on Social Security or to capture the agency. 

By contrast, let’s consider what that Huffington Post article that three of my Democrat colleagues said about Dr. Charles Blahous.  The article claims that he “burnishes his credentials” as a public trustee by daring to write articles outside of his role as public trustee which identify and analyze financial challenges facing Social Security and Medicare.  The article decries his affiliation with his own workplace, calling it “a Koch front-group” which zealously pursues an “anti-government agenda.” 

Essentially, these Senators are saying that if you dare to have ideas and thoughts with which they disagree, even if you offer them in reasoned writings and speeches, then you should be censored and deemed unfit to serve in any public capacity. 

Mr. President, my friends on the other side of the aisle have unfortunately injected needless politics into Social Security trustee reports, and have threatened the integrity of those very reports with their allegations, as well as attacking an individual based on false claims.

Unfortunately, it seems clear that, in an election year, Democrats are intent on constructing a “privatization” strawman and using it to scare seniors into sending checks and votes to Democrats.  And, on the altar of election-year politics, they are apparently more than willing to sacrifice the historic transparency and integrity provided by the trustees’ reports.

Indeed, they’ve gone out of their way to claim that the reports are already politically compromised, despite having no credible evidence that such is the case. 

Mr. President, thanks to a bipartisan desire to have the facts on Social Security’s trust funds reported objectively and honestly, we had gone for decades with trustee reports that were largely free of political controversy.  Unfortunately, some of my friends in the Senate, spurred on by their activist political operatives, seem to no longer have that desire.  It would truly be sad, and not in the interest of current or future Social Security beneficiaries, if trustees reports now become mere political documents. 

While that is the road my colleagues apparently want to send us down, I plan to do all I can to ensure that will not become the case.