Social Security: the political monster that lurks in debt talks
Long the "third rail" of politics, Social Security has emerged as a part of bipartisan talks aimed at stabilizing America's public debt. Will it finally be restructured to reflect today’s economy?
Long a proverbial "third rail" that politicians feared to touch, Social Security has suddenly emerged as a possible part of bipartisan talks aimed at stabilizing America's public debt.
Arguably no federal program is more politically sensitive, yet finance experts say Social Security needs some restructuring to remain solvent for the long term.
In recent days, the program has appeared to shift from "off the table" to possibly on the chopping block as part of a grand bargain on federal finances.
Some political analysts are praising President Obama for expressing a willingness to think big and discuss the toughest issues – Social Security, Medicare, tax reform – as part of the bipartisan talks over conditions under which Congress would raise the debt limit to allow more federal borrowing.
Subscribe Today to the Monitor
But he also faces an outcry from groups seeking to defend Social Security and from liberal members of Congress, many of whom don't want to touch entitlement programs before the next election.
"I am especially disturbed that the president is considering cuts in Social Security after he campaigned against cuts in 2008," Sen. Bernie Sanders, a Vermont independent, said this week. He cited a statement that Barack Obama made on the 2008 campaign trail, pledging not to tinker with cost-of-living adjustments (COLAs) in the program.
Changing the way inflation is measured, to reduce the annual rise in senior benefits, has emerged as one of the leading ideas of budget experts on how to fix the program. But there are other options: slowly raising the eligibility age for benefits, reducing benefits for high-income retirees, and asking high-income workers to pay more into the program through the payroll tax.
Not everyone agrees on the semantics of calling the COLA change a "cut" in Social Security. Proponents cast it as a shift to a more accurate gauge of inflation – and a change that could be applied to some other federal programs to help ease future budget deficits.
But even under the current system, many seniors feel that cost-of-living adjustments haven't been keeping pace with the prices they face – including on health care expenses not covered by Medicare or Medicaid.
The uproar over the issue is a reminder of what a political monster entitlement reform is for politicians. There's much to lose from talking about changes that often amount to tax hikes or reductions in benefits.