While last week the WSJ reported that it would leave Social Security out of the budget, that's not so much how it worked. In his budget message, President Obama did address Social Security, saying that "'we should come together now, in bipartisan fashion, to strengthen Social Security for the future,” . . . [and calling] on the Congress to follow the example of great leaders in the past – such as Speaker Thomas P. O’Neill Jr. and President Ronald Reagan -- and work in a bipartisan fashion to strengthen Social Security for years to come.'" He laid out six principles.
1. Any reform should strengthen Social Security for future generations and restore long-term solvency.
2. The Administration will oppose any measures that privatize or weaken the Social Security system.
3. While all measures to strengthen solvency should be on the table, the Administration will not accept an approach that slashes benefits for future generations.
4. No current beneficiaries should see their basic benefits reduced.
5. Reform should strengthen retirement security for the most vulnerable, including low-income seniors.
6. Reform should maintain robust disability and survivors’ benefits.
Chris has a good summary of what that likely means, and points out reports that talks have been ongoing to "try to reach a bipartisan “grand bargain” over the budget." Any kind of "grand bargain" is going to include Social Security, like it or not. Ezra seems to think the budget message is a direct call for Social Security negotiations, with those principles being the starting position for the administration.
This puts Social Security firmly back on the negotiating table, everything but "privatization," which is a red herring on the administration's part, anyway. Privatization hasn't been on the table since a Republican president--Bush II--failed to accomplish it in 2005, with a Republican Congress. So this Democratic president isn't going to get any brownie points among Social Security defenders on that dead letter.
The agreement between O'Neill and Reagan the budget message references did what policy-makers are now ignoring: it put Social Security on a solid footing for the coming baby boom retirement. The huge surplus that's been built up was done so by increasing the payroll tax cap, and by raising the retirement age. The baby boom is taken care of, as are all retirees until the year 2037. That the problems facing Social Security are long term rather than immediate suggests that putting it on the table now is unnecessary. That's particularly so when you've got a Democratic administraiton that has shown a distinct lack of negotiating skill vis-a-vis the take-no-prisoners Republicans and which also has a really disturbing practice of advancing the false "Social Security in crisis" and "Social Security is part of the deficit problem" narratives.
This is not to argue that there aren't changes that should be made to Social Security to strengthen it beyond 2037, and that doing so sooner rather than later would pay higher future dividends at a lower present-day cost to worker and employers. But this president and this Congress anre't likely to come up with anything good for the health of this program.
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