Monday, February 14, 2011
Baby Steps To Sanity
Here are the relevant passages in the Obama budget on Social Security:
p.23-24 From "Putting the Nation on a Sustainable Fiscal Path" section: "Cutting funding for discretionary programs and using those dollars more effectively and efficiently are important to begin to rein in our deficits. But non-security, discretionary spending represents approximately 12 percent of all spending. The solution to our long-term fiscal problems cannot rest on this alone. Taking on many of these long-term funding issues will take months, if not years, of discussion and deliberation. The Fiscal Commission’s report opened a debate on many of these topics, such as tax reform and Social Security. The President hopes to build on the work they did to create space to discuss these issues, and begin a process of reform that results in putting the Nation on sound fiscal footing, creating the conditions for long-term economic growth, and doing both in a way that remains true to our most deeply-held values. The Administration will..."
p.26-27 More from "Putting the Nation On a Sustainable Fiscal Path" section:"Secure Social Security. On January 1 of this year, the very first Baby Boomers turned 65. As this large generation ages and retires, it will put stress on the Social Security system. Although Social Security does not face an immediate crisis and is not driving our short-term deficits or long-term debt, it does face a long-term financing shortfall. Failing to strengthen Social Security will result in substantial benefit cuts for future retirees and will undermine the basic notion that a lifetime of hard work should be rewarded with dignity in retirement. If we address these longterm challenges early, we can help ensure that Social Security’s compact remains strong and progressive for future generations.
"The President believes that we should come together now, in bipartisan fashion, to strengthen Social Security for the future. He calls on the Congress to follow the example of great party 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. Guiding the Administration in these talks will be the President’s six principles for reform:
• Any reform should strengthen Social Security for future generations and restore long-term solvency.
• The Administration will oppose any measures that privatize or weaken the Social Security system.
• While all measures to strengthen solvency should be on the table, the Administration will not accept an approach that slashes benefits for future generations.
• No current beneficiaries should see their basic benefits reduced.
• Reform should strengthen retirement security for the most vulnerable, including low-income seniors.
• Reform should maintain robust disability and survivors’ benefits."
Unless they have decided to define raising the retirement age something other than "slashing" benefits cuts, this sounds like the only thing they are willing to consider is raising the cap, which is very good news. It's the rational choice.
Who knows where this will end up in negotiations, but it's a strong a statement as we've heard since the president inexplicably decided to talk about social security solvency at the beginning of his term. If they've backed off cuts, I think it's because of the sharp resistance from the left, which wisely mobilized the minute they announced Pete Peterson as a key speaker at their Fiscal Responsibility Summit. All of us shrieking Cassandras may have had the desired effect of keeping SS a third rail they just don't want to touch --- which is always the point. (And it's not like there aren't more pressing issues.)
It is still worrisome since the administration seem to have adopted "sending signals" to Wall Street as their economic strategy, and part of that messaging is being "tough" on issues they "care about". But at least they aren't opening with a capitulation, which is good news.
Update: The Hill reports new numbers on Social Security
A sizable majority of likely voters is worried about Social Security’s future but much more divided over whether the retirement age for the program should be raised, according to a new poll conducted for The Hill.
Seventy-seven percent of likely voters believe Social Security is in trouble, while just 15 percent believe the program is financially sound.
Still, a plurality – 48 percent – also believed that the Social Security age should not be raised for people born after 1960, who are currently slated to begin receiving full benefits at age 67. Forty percent favored pushing back the retirement age...
While likely voters generally believed Social Security was not on sound footing, no matter what their gender, race or political beliefs, the question of whether to raise the retirement age broke down more along party lines.
Republicans and conservatives were roughly split over whether to increase the age at which someone can receive full benefits, while Democrats and liberals strongly opposed the idea. Moderate voters also were against raising the Social Security age, though not as strongly as those to their political left.
However, that this many people still think this after the crash of 2008 is shocking. (And I'd like to see the age demographics on that. I doubt that many people over the age of 50 think this):
Voters were also split over whether to allow people to invest the Social Security taxes they pay into personal retirement accounts, an idea that was a linchpin of then-President George W. Bush’s plan to reform the program.
Thirty-six percent of likely voters believe diverting payroll taxes to personal accounts should not be permitted at all, while 37 percent backed being able to invest either 25 percent or 50 percent. Sixteen percent supported the ability to invest three-fourths or all of one’s Social Security taxes.
The poll also found that Democrats (58 percent) were nearly three times likelier to favor not allowing any Social Security taxes to be used in individual accounts than Republicans (20 percent). On the flip side, 48 percent of Republicans backed allowing a quarter or half of payroll taxes to go into personal accounts, as opposed to 25 percent of Democrats.
The poll found more consensus about whether to raise the amount of income that can be taxed for Social Security, an idea that has garnered support from President Obama’s bipartisan debt commission and Senate progressives.
Sixty-seven percent of likely voters backed that idea, with only 23 percent against it. Even a majority of those making more than $100,000 – who would be most affected by this plan – supported the move.
I'd say we've got us a bipartisan consensus --- if anyone cares to notice.
Unfortunately, the Village is obsessed with the Fiscal Commission and so danger still lurks. But if they listen to the people they will put old man Simpson and his little dog Bowles out to pasture.
digby 2/14/2011 09:49:00 AM