The Coming Debate Over Social Security & Medicare

by: David Sirota

Thu Feb 12, 2009 at 14:00


Take it with a grain of salt because it's the Politico, but don't fully discount it just because it's the Politico - there is a real story here...or at least there might be at some point soon:

Left silent on Social Security, Medicare

By: Ben Smith
February 10, 2009 04:46 AM EST

President Barack Obama plans a busy February. The new administration hopes to have a stimulus package passed by Congress, a new plan in place to shore up ailing banks and, by month's end, to hold a "fiscal responsibility" summit.

If the stimulus and banking bailout weren't controversial enough, the summit fills some entitlement reform critics with dread, as they fear it could speed calls for cuts to Social Security and Medicare.

Strikingly, however, Obama appears to be getting unusual room to maneuver on entitlements by most of his liberal allies. On the subject of entitlement reform, in fact, Obama's honeymoon continues - at least in the unlikely precincts of the Democratic left, a counterintuitive development that has buoyed the spirits of reformers who would like to see drastic changes in the way Social Security works.

A few weeks ago, Obama seemed to suggest that he wants to focus deficit reduction efforts solely on Social Security and Medicare, but he didn't explain what he actually meant by that. At the time, I said it while it could be cause for concern, it's entirely possible Obama defines "reform" as, say, lifting the regressive payroll tax cap so that wealthy folks pay more Social Security taxes. And the Politico makes this point as well:

David Sirota :: The Coming Debate Over Social Security & Medicare
Despite Obama's rhetorical suggestions that he's open to Social Security and Medicare cuts to prevent a crisis, he has long opposed anything like the Bush plan.

Instead, during the campaign, Obama suggested the relatively modest step of increasing Social Security's revenues by raising the cap on Social Security taxes, which would make the income tax system more progressive and bring more money into the program.

At other times, he's also adopted the liberals' central talking point: that Social Security needs just minor tweaks and that Medicare's problems are bound up in the broader woes of the American health care system.

I think this is a potentially dangerous situation in that conservatives may be looking to seduce Obama into an innocuous sounding "summit" or "blue-ribbon commission" - one that tries to lull the country into thinking that entitlement cuts are the only way to go. We know that's the right's objective, of course - but we also know Obama has made concrete pledges about protecting Social Security and Medicare.

So while it's probably not a great idea for the left to simply sit back and trust that Washington will do the right thing, it's also entirely possible that Obama will use his bully pulpit to redefine entitlement "reform" as making the payroll tax more fair and passing universal health care. If that happens, it would be fantastic.


Tags: (All Tags)
Print Friendly View Send As Email
Hilzoy (4.00 / 2)
I'll just outsource my thoughts to Hilzoy:

Or, in short: once Obama comes out with specific proposals on entitlements, I will say something about them. Until then, my little piece of the Silence of the Left should not be taken to reflect anything more than not knowing what, exactly, he proposes. (It's certainly not that I am "afraid to express concerns", as Rep. Jim Cooper suggests in the Politico piece.) Some things that go by the name of "entitlement reform" are fine. Others are not. If Obama proposes the latter, there will be no "honeymoon" or "breathing room". But until I have some idea what, exactly, Obama proposes to do, I don't really see much point in speculating.

If Obama suggests cutting back on entitlement payouts, we should push back very hard.  If we remove the cap on payroll taxes, we just jump for joy.  Both possibilities qualify as entitlement reform.  If he suggests both as part of some grand bargain, there will be much noise and arguement.

For now, nothing is required from us.  But it is always a good idea to push back on bad ideas as trial balloons are (intentionally or not) launched.


Why? (4.00 / 3)
For now, nothing is required from us.  But it is always a good idea to push back on bad ideas as trial balloons are (intentionally or not) launched.

Forget always. Why is not acting the right call in this instance? Do you think the other side will use a wait-and-see strategy?  If not, aren't they outflanking us if we do nothing?

Who are the best keepers of the people's liberties? The people themselves. The sacred trust can be no where so safe as in the hands most interested in preserving it.
James Madison


[ Parent ]
Sorry, I didn't explain myself well (4.00 / 1)
I completely agree.  That's what I was getting at with the "intentionally or not" parenthetical.  I consider this article to be an unintentional trial balloon.  That isn't a very clear way of saying it, though, is it?

So yes, we should push back now and always.


[ Parent ]
Sorry (0.00 / 0)
I think it was poor reading on my part. I've seen the idea that 'acting before you know what Obama is going to do is a bad thing' so often, I might be a little trigger happy.

Who are the best keepers of the people's liberties? The people themselves. The sacred trust can be no where so safe as in the hands most interested in preserving it.
James Madison


[ Parent ]
Cheerleading (4.00 / 1)
You'll find I often seem to take both sides.  I always think it is a good idea to push in the direction you want your country to go.  But at the same time, I'm actually not all that worried about some stuff that worries others.

That leaves me in a weird place at times where I don't personally complain, but cheerlead others to complain.


[ Parent ]
Look, there is one thing there is (4.00 / 5)
no excuse to be silent on: that is the idea that SS is in any way in crisis, and in anyway contributes to any current or foreseeable problem.

This is a point virtually everyone in liberaldom accepted once upon a time. Now, suddenly, that Obama has raised the issue, we are all supposed simply to wait to hear what he has to say about it.

The problem is -- which, again, once upon a time we all grasped perfectly, before we all forgot -- when the subject of SS's supposed "crisis" gets raised, everybody, including Republicans, gets to propose their solutions to SS. Why imagine that some desire to appease Republicans might not lead to some damage being wrought to SS? And even if nothing is done, surely it only feeds the perception -- which Republicans might harvest in future terms when they regain power -- that SS is somehow an intractable problem we must deal with by dramatic reform.

Look, the real point here is that SS is perfectly solvent essentially as far as the eye can see (see Dean Baker on this point.) It requires no revision at all -- none -- to maintain its structure and benefits into the knowable future. Even the date toward the middle of this century when there might be a problem is based on projects pessimistic enough, and so far into the future, that we have no good reason to believe it might come about.

In such a circumstance, fixing what is not broke can bring about no real good. Feeding a perception that we must keep coming back to SS to tinker with it or reform it portends only evil for those eras when Republicans may come back in force.  


[ Parent ]
Thought experiment (0.00 / 0)
What will Republicans say if Obama, after talking about the SS "crisis", chooses not to implement any changes to SS, or if he merely tinkers with the cap on payroll taxes?

Answer: that Obama recognizes that SS is in crisis, but refuses to do what needs to be done to solve the problem, because he has to answer to the dirty hippies in his party.

I ask, why give the Republicans an opportunity to spread that meme? Don't you think that if, say, Democrats lose power because the economy keeps tanking, the Republicans can use that to their advantage?


[ Parent ]
From what I've read (4.00 / 4)
raising the cap would put the program in the black, or close to it. Not to mention being more fair. Why do I pay SS taxes on 100% of my income while John McCain pays on only 25% or less?

If you liked Bush, you'll love McCain

[ Parent ]
The real fear (4.00 / 1)
The real fear for that plan is with big money earners who are self employed.  Take a surgeon earning $10 million a year.  Eliminating the cap would cost him (almost always a him at that level) over $1.3 million per year.  Believe me, the doctors were buzzing about this around election day and their accountants were pushing the meme.

The same would hold for some lawyers and some deal makers as well.  The hit to Warren Buffett would be astronomical.

The other problem is that Social Security is not a welfare program, it is an insurance program.  Lifting the cao would either mean that this doctor would be eligible for huge payments upon retirement or the program really does become a welfare program.  We don't want to do either.

Social Security during the Clinton years racked up huge surpluses.  It is not a loser although it is somewhat cyclical.  If you want to get thrown out soon, tinker with Social Security.

Medicare is entirely different.  It needs a fix.  Jamming the two into a non-existen tentitlement program may play well with Versailles but I have had a sinking feeling on this for two years now with Obama.  Even McCain in the debates vowed not to touch Social Security;  Obama would not make a similar statement.


[ Parent ]
Removing the cap (4.00 / 5)
wouldn't make Social Security a "welfare program" rather than social insurance.  What you get out of Social Security is related to what you put in, but the deal is best for people at the bottom.  That's the nature of insurance - it spreads risk, rather the just giving back to each the share they put in.  

As for the hit that the rich would take - it's not a hit. They would be subject to the same level of taxation for this program as the rest of us.  You could phase it in to cushion the blow - which could be over a long period.

I'm not convinced people are opposed to tinkering with Social Security. I think they are opposed to weakening it.


Who are the best keepers of the people's liberties? The people themselves. The sacred trust can be no where so safe as in the hands most interested in preserving it.
James Madison


[ Parent ]
Exactly. (4.00 / 4)
The same level of taxation as the rest of us. What's wrong with that? Why shouldn't they pay their share?

If you liked Bush, you'll love McCain

[ Parent ]
I still don't see the problem. (4.00 / 3)
A surgeon making $10 million probably tips his pool boy $1.3 million. He can afford it.

What seems to be missing is the understanding that Social Security is a social good. It benefits all of us, as a society, not just those individuals who recieve it. We all benefit from the fact that orphans, widows and the disabled are not (yet) reduced to begging in the streets. We all benefit from the fact that our parents are provided for, leaving those of us of working age free to pour more resources into our children (and ourselves.)

If a multi-millionaire surgeon does not see this, he's just an asshole.

If you liked Bush, you'll love McCain


[ Parent ]
Yes. (0.00 / 0)
If I could rec this twice, I would.

Guess what -- if you're making 10 million, you don't need that extra 1.3 million to cover your basic necessities!  Yes, you work hard, but so do people working 3 jobs at minimum wage.

The greed and selfishness that American culture promotes is just gross to me.  We already pay less taxes than practically anyone in the Western world, and are so far behind on so many things -- health care, child care, education, you name it.  Enough. I'm sick of people defending the ultra-wealthy's "right" to be even more wealthy.  It's disgusting, when there are kids who don't have enough to eat and people die because they don't have health insurance.  Please.

Republicans can't fix our country; they're too busy saddlebacking.


[ Parent ]
Entitlement reform (4.00 / 3)
but we also know Obama has made concrete pledges about protecting Social Security and Medicare.

Um, yeah, Obama also said he wouldn't vote for FISA or continue the "State Secrets" privilege now didn't he. I think there is tremendous cause for concern here.


State secrets (4.00 / 1)
I agree the state secrets case is a point of concern.  However, they can't really drop Bush's generic state secret clause until they understand if there are any actual state secrets to be protected.

Long before Bush, there were formal, agreed upon ways to deal with actual state secrets in court trials in a reasonable way.  But it will take some time to for the administration to come to a full understanding about all the mess they inherited.

This is another case where we need to push back.  But personally, I'm not actually worried just yet.

FISA was very real and an actual problem.  I assume he was protecting Democrats with that vote, but we may never find out.


[ Parent ]
Well the point is (4.00 / 1)
he said he wouldn't and then he did! :-) I wouldn't be surprised if he did the same with SS...

[ Parent ]
It doesn't matter what Obama's intentions are David (4.00 / 6)
We need to be organizing resistance and being very vocal about our expectations now.  Trust and hope are great during campaign speeches and president elect speeches, but we need to be pushing him always now that he is President.  The special (and monied) interests will never stop jockeying for advantage, we need to be doing the same.  

There are a few things we should be seriously pushing him on right now:

1 - SS / Medicare Reform.  What do we expect and what is unacceptable.

2 - New Supreme Court Justices.  We need to have a short list (as of yesterday) that we can push on now for when there are openings (soon.)  Getting out a head of this issue is #1 in my mind, the others can always be re-legislated later on.

3 - Wars.  What do we expect in Afghanistan and Iraq.  Even if he seems to be doing what we want, we need to be clear and keep pushing for a resolution.  Once started, wars tend to continue until stopped.

4 - Government Transparency.  We must communicate that it's unacceptable for govt planning and budgets to proceed in secret.  He campaigned against it, we have to make him honor that promise.

And lastly, until we are willing to walk away from Obama and withdraw support until these requests are honored, we will get nothing.  But if his electoral base is willing to walk, he'll suddenly become very atentive to our needs IMHO.  But we have to be willing to cut our boy loose first.


Regardless of (4.00 / 8)
Obama's intentions (which we can't know,) I have two thoughts:

One, Obama and other Democrats keep talking about the problem of entitlements, when they really should be talking about the problem of health care (which is real source of the problem).  This is about their rhetoric, not their internal thoughts or plans. Adopting the rhetoric of those who would destroy SS is not a good thing, regardless of what you mean by it.

Two, this idea that the Left would accept this needs to be quashed, or else all the pressure in Congress and on Obama will be on the right flank.  The source of this idea, whether Obama himself or made up by Politico, is irrelevant to this issue.

Who are the best keepers of the people's liberties? The people themselves. The sacred trust can be no where so safe as in the hands most interested in preserving it.
James Madison


I think (0.00 / 0)
the administration needs to brush up on their Lessig

[ Parent ]
My hobby horse (4.00 / 12)
is that we need to stop talking about "entitlements" and start talking about "the safety net."

When you use the right words, the right action follows. When they tell us "times are hard, we must cut entitlements" we should answer "times are hard, this is no time to cut the safety net."

If you liked Bush, you'll love McCain


Mine (4.00 / 7)
"Reform." Republicans have used reform to try to kill SS. Any of the positive changes to the program should be called "strengthening Social Security," not "reform."


Who are the best keepers of the people's liberties? The people themselves. The sacred trust can be no where so safe as in the hands most interested in preserving it.
James Madison


[ Parent ]
Health Care Reform is Entitlement Reform (4.00 / 1)
which is, I suspect, going to be the cornerstone of Obama's strategy.

Or rather, what I HOPE will be his strategy.


It's not too soon (4.00 / 3)
Until we have the actual nuts and bolts to consider, the most important thing is to make sure -- even if President Obama doesn't -- that the Republicans are forced to fight on the ground we choose. That's why we should begin the discussion now, when the first whispers are making the rounds.

Sadie Baker and David Kalb are right. Entitlement Reform is the right wing's phrase. We all know what they mean by it, and we should make damned sure, even before the first concrete proposals are on the table, that the American people do as well.  


"a gradual reduction in benefits from those scheduled under current law" -- Orzag/Brookings in 05 -- (4.00 / 3)
plus tons tons more on this from Firedoglake -- Obama, Social Security and the Diamond-Orszag Plan -- http://firedoglake.com/2009/02...

... Now as Ben rightly notes, during the campaign the only time Obama discussed revamping Social Security was raising the cap on Social Security taxes.  But that's hardly what Jim Cooper and the Blue Dogs are looking for.  Nor, does it seem, that folks inside the Obama team think that this will be sufficient.  The framework they are evidently looking at is outlined in a 2005 Brookings Institute paper called the Diamond-Orszag Plan, co-written by...yes, Obama's budget director, Peter Orszag.

You can find the plan here, but this should give you a hint:

   Since Painful Choices Must Be Made, a Key Question Is, Which Ones?

   The Social Security deficit can be eliminated only through different combinations of politically painful choices: tax increases and benefit reductions. Unfortunately, too many analysts and politicians have ignored this reality, responding to the painful alternatives by embracing "free lunch" approaches.

   []

   Our plan makes the painful choices that are necessary-selecting a combination of benefit and revenue changes to restore long-term balance. In doing so, it focuses on three areas which contribute to the actuarial imbalance: improvements in life expectancy, increases in earnings inequality, and the burden of the legacy debt from Social Security's early history.

   []

   Workers who are 55 or older will experience no change in their benefits from those scheduled under current law. For younger workers with average earnings, our proposal involves a gradual reduction in benefits from those scheduled under current law.  For example, the reduction in benefits for a 45-year old average earner is less than 1 percent; for a 35-year-old, less than 5 percent; and for a 25-year-old, less than 9 percent. Reductions are smaller for lower earners, and larger for higher ones.

Obama met with the Blue Dogs Tuesday night.  Before the House vote on the stimulus bill, Rahm Emanuel had promised them that they would soon see "signs of Obama's commitment to fiscal reform," and according to one Blue Dog, "Tuesday night was a fulfillment of the commitment Emanuel made that day."

...



Great. (4.00 / 3)
So the Blue Dog plan is that I should start stocking up on cat food now, before I get old, because asking rich people to pay the same taxes as regular people is too "painful."

I'll keep that in mind.

If you liked Bush, you'll love McCain


[ Parent ]
07 -- Barack Obama on the Social Security "Crisis" (0.00 / 0)
MyDD Exclusive: Barack Obama on the Social Security "Crisis" -- http://www.mydd.com/story/2007...

The reality with health care and medicare is this... (0.00 / 0)
The administration wants to pass a major health care reform that will significantly expand coverage, mostly through an expansion and series of changes to Medicaid.

This reform will be expensive, and so the administration is looking for offsets, a lot of which will have to come from Medicare.  This is not necessarily a bad thing, and it may be politically and fiscally necessary. There will be some expansion of health care spending in general for sure, but some of reform will be moving resources from one set of programs (and beneficiaries) to another.

For all sorts of reasons, including both public health reasons and issues of egalitarianism, progressives should support the idea that, given resource constraints, expanding coverage to the uninsured is more important than protecting every single benefit the elderly currently receive.  Don't turn every aspect of Medicare into a sacred cow.

John McCain: Health insurance for low income children represents an "unfunded liability."


If the plan is to (4.00 / 3)
enlarge the safety net, then obviously there will be support on the Left. If the plan is to slash it, there will be friction.

But why are "resource constraints" a "given?" Why can't the rich pay the same taxes as the rest of us? Beyond the fact that they are, you know, rich.

If you liked Bush, you'll love McCain


[ Parent ]
Its not that simple (0.00 / 0)
The reality is that there are resource constraints.  This country is in the fiscal crapper right now and health care costs are increasing at rates that are essentially unsustainable.  Its not about just raising taxes on the rich, expanding the safety net, and everything working out easily.  You can do all that, but tough decisions will have to be made nonetheless.  And a huge part of that process is going to involve finding a way to spend less money on Medicare or at least to slow the growth rate of spending on elderly populations.  Trust me: Everybody in DC working on this issue knows this.  The numbers just don't add up otherwise.  Its a ticking time bomb.

John McCain: Health insurance for low income children represents an "unfunded liability."

[ Parent ]
Well this gets back to my original formulation, then. (4.00 / 3)
The country is in the fiscal crapper. This is no time to be fucking around with the safety net. If Obama gets that, he'll be fine.

If you liked Bush, you'll love McCain

[ Parent ]
??????? (0.00 / 0)
"The country is in the fiscal crapper. This is no time to be fucking around with the safety net."

This sounds good, but makes absolutely no sense.  A huge part of the reason we are in the fiscal crapper is that the safety net, as currently constructed, is broken: ITS NOT JUST THAT IT DOESNT COVER EVERYBODY, ITS THAT SOME CURRENT PROGRAMS ARE BADLY STRUCTURED AND EXPLODING IN COST.  Do some research someday about CBO and OMB projections for health care (and especially Medicare) spending over the next two decades.  It is a huge problem and needs to be dealt with somehow.  There is hardly anybody who studies this stuff seriously - liberal or otherwise - who disagrees.

You can't have everything.  It would be a nice to live in a world where the solution was simply "increase taxes, increase services."  Unfortunately, that world doesn't exist because, if programs were left unchanged to keep growing at current rates and with demographic adjustments, over the next two decades you would need to raise taxes to levels so astronomical that it would be unwise and politically unfeasible.  Its just math.  This is something that, thankfully, Obama understands very well.  There is a reason he has guys like Peter Orszag in charge of this stuff.



John McCain: Health insurance for low income children represents an "unfunded liability."


[ Parent ]
What a riot (4.00 / 2)
Dole out unrestricted billions to failed banks and then hold a "fiscal responsibility" summit LOL.

You just can't make this stuff up.


For each DVD you purchase, Brave New Films will donate $5 to OpenLeft.com to support our various projects. Please click on the buttons above to make a purchase.
SEIU will donate $1 to OpenLeft for each individual who signs up for their campaign to pass health care for all Americans. Sign up here.
Donate to Open Left

--Senate Whip Count
--The Progressive Block
--Senate 2010 Forecast

QUICK HITS

blog advertising is good for you

Friends of the Earth thanks the OpenLeft community for the ideas you generate and your contributions to the progressive movement.


blog advertising is good for you
SEARCH

   

Advanced Search