As deficit-cutting talks proceed, what about Social Security?
Resource type: News
The Miami Herald | [ View Original Source (opens in new window) ]
By DAVID LIGHTMAN
WASHINGTON – Could high-level Washington deficit-reduction talks lead to changes in Social Security anytime soon?
Highly unlikely, Senate Democratic leaders said Tuesday.
“Social Security is clearly not responsible for the deficits we face in the general fund today and should not be part of our efforts to reduce those deficits,” said Sen. Max Baucus, D-Mont., the chairman of the powerful Senate Finance Committee, which oversees Social Security.
But other lawmakers weren’t so sure, as the White House and congressional leaders engaged in a second day of talks over how to cut federal deficits.
They are up against a deadline created by the nation’s debt limit. The government is expected to reach the $14.3 trillion ceiling this month, though Treasury Secretary Tim Geithner has said borrowing authority could be extended as late as Aug. 2.
Talks are intensifying. Vice President Joe Biden presided Tuesday over the second meeting of a bipartisan congressional leadership group. President Barack Obama plans to meet at the White House on Wednesday with Senate Democrats, and Thursday with Senate Republicans.
GOP leaders insist they want dramatic spending cuts before they will consider any debt-ceiling increase. House Speaker John Boehner, R-Ohio, said Monday he wants a $2 trillion reduction package first.
Democrats want higher taxes in the mix. Republicans refuse to increase taxes. Democrats are also reluctant to tinker with Social Security and Medicare, the health care program for seniors and some disabled people.
Tuesday, public positions were hardening.
“The president has said, others have said, that the way we’re going to deal with the deficit is deal with things that cause problems with the deficit. Social Security has not contributed one dime to the deficit,” said Senate Majority Leader Harry Reid, D-Nev.
Sen. Orrin Hatch, R-Utah, the Finance Committee’s top Republican, disagreed.
“We need to look at the role of Social Security with respect to the origins and continuous causes of the unsustainable deficits and debt,” he said. “It is only proper that this committee air those issues out.”
Even if changes are made, few expect any major impact on retirees anytime soon. “I haven’t heard anyone talking about Social Security in a draconian way,” said Sen. Bob Corker, R-Tenn., the top Republican on the Senate Special Aging Committee.
Social Security, financed through payroll taxes, has enough money in its trust fund to pay full benefits through 2037, according to its 2010 trustees report. From 2037 to 2084, the system should get enough tax revenue to pay 75 percent of scheduled benefits.
“This is not a crisis,” Baucus insisted. “It’s a long-term issue. It is an issue that should be addressed sooner rather than later, to give workers time to plan for any changes. But the current situation does not necessitate rushed or severe action.”
Privately, other Democrats think there are ways to tweak Social Security without causing future beneficiaries much pain. There is talk of applying “means tests,” which could reduce benefits for the wealthy or raise their wage-tax contributions.
Also being discussed is raising the Social Security retirement age, now 66 for people born from 1943 to 1954. It increases by two months for each birth year (66 years and two months for those born in 1955, 66 and four months for those born in 1956 and so forth), until those born in 1960 or later get full benefits at age 67. A compromise might extend the retirement age further.
Political pressure makes any change to Social Security difficult to achieve. President George W. Bush tried to make adding a private investment option a top priority after his 2004 re-election, but got nowhere. The National Commission on Fiscal Responsibility and Reform, the bipartisan panel that issued a deficit-reduction report in December, made recommendations for Social Security, including a higher retirement age.
But the program’s defenders want to avoid making any changes as part of a broad deficit-reduction package.
“Social Security is too complicated and too important to the American people to be addressed as part of other complicated legislation, when full attention will necessarily be diverted,” said Nancy Altman, co-director of Social Security Works, backed by liberal groups devoted to strengthening the system. “There is no need for haste in addressing Social Security.”
Social Security Works is an Atlantic Grantee.