Actually, I’m not just mad at the pundit, but also at Senator Obama: he knows his position is intellectually dishonest.
By way of Ezra Klein, I came across a discussion at Hotline about this interview with Senator Obama:
For the first time as a presidential candidate, Sen. Barack Obama, posed a question about entitlement reform, said that “everything was on the table,” except for private accounts, and in doing so, because the first top-tier Democratic presidential candidate to acknowledge that Social Security deficits could not, and would not, be solved without pain.
STEPHANOPOULOS: You’ve also said that with Social Security, everything should be on the table.
STEPHANOPOULOS: Raising the retirement age?
OBAMA: Everything should be on the table.
STEPHANOPOULOS: Raising payroll taxes?
OBAMA: Everything should be on the table. I think we should
approach it the same way Tip O’Neill and Ronald Reagan did back in
1983. They came together. I don’t want to lay out my preferences
beforehand, but what I know is that Social Security is solvable. It
is not as difficult a problem as we’re going to have with Medicaid and
STEPHANOPOULOS: Partial privatization?
OBAMA: Privatization is not something that I would consider, and
the reason is this: Social Security, I think, is — that’s the floor.
That’s the baseline. Social Security is that safety net that can’t be
frayed, and we shouldn’t put at risk.
But — will John Edwards or Hillary Clinton have the gumption to claim that they can fix Social Security and Medicare without the options troika mentioned above? [raising the minimum age, increase payroll taxes, or cutting benefits] And will any lower-tier candidate have enough money by the time Floridians are paying attention to even try? Yes, Dick Gephardt was able to dent Howard Dean’s margin in Iowa by pointing to Dean’s own honest remarks about the subject, but few Iowans seemed to care on caucus day. [MARC AMBINDER]
First, Ambinder pull a classic Samuelson (which is different than the Samuelson unit): he conflates Social Security with Medicare. The two programs have distinct and dedicated revenue streams. Medicare is a basketcase due to spiraling medical costs which are rising much faster than the payroll taxes–and the wages that support those payroll taxes–that are dedicated to the Medicare program. Social Security, however, barring a severe economic downturn that lasts for several decades, will remain fully solvent in its current form. As I’ve noted before the crisis will not be an inability to meet the Social Security obligations, but the disappearance of the Social Security surplus and the Trust Fund, which are used to lower the annual budget deficit and the national debt respectively.
And that’s why I’m troubled by what Obama said. It is true that if the Social Security surplus were to suddenly disappear, our annual budget deficit would increase by about $150 billion. If the Trust Fund were to vanish overnight, the national debt would increase by roughly $2 trillion. But remember: we are now describing the entire federal budget.
So why does the responsibility of solving problems in the general budget fall on the most successful anti-poverty program ever developed in the U.S.?* If Social Security is on the table, then everything else in the general budget should be on the table–including defense-related spending (which in 2006, totaled over $700 billion). Of course, there’s the flip side: raising revenue–that is, taxes. Once upon a time, people actually thought there were ways to increase revenue other than through payroll tax increases (the young’uns probably don’t believe me, but it’s true). But that’s a discussion very few people want to have openly, other than some liberal Democrats (particularly those not running for president).
So shame on Obama–I think he’s smart enough to know better. He knows Social Security is a stable program. And shame on Ambinder: he just seems too lazy to actually read the Social Security Trustees’ report. If he read the report, he would realize that a real maverick would argue that Social Security isn’t doomed.
*Thomas Geoghan makes the argument that another Social Security ‘crisis’ is that, as pensions go, Social Security is pretty meager.