Democrats Splinter Over Strategy for Reducing Deficit
Battle Lines Drawn as More Are Willing to Put Entitlements on Table
The piece leads off:
Democrats are sharply divided over whether to tackle popular but increasingly expensive safety-net programs for the elderly, particularly Social Security.
According to Montgomery, a “growing number of Democratic lawmakers say they are willing to consider controversial measures such as raising the retirement age and reducing benefits for wealthier seniors.”
That would be big. Who are they? She tells us who they aren’t:
But senior lawmakers such as Senate Majority Leader Harry M. Reid (Nev.) and Sen. Charles E. Schumer (N.Y.) are lining up against them, arguing that tampering with Social Security would harm the elderly–as well as the political fortunes of Democrats hoping to maintain control of the White House and the Senate in 2012.
OK–that’s not them. And then there’s this:
And House Democrats this week signaled their intention to use Social Security as a cudgel in next year’s elections by launching an ad campaign accusing 10 GOP lawmakers in swing districts of plotting to cut the program.
Not them, either. So where is this split, exactly?
Meanwhile, Third Way, the centrist Democratic think tank, plans to release a memo Friday arguing that the deficit has emerged as an uncommonly powerful political issue and that 2012 voters will reward the party that takes bold action to restrain government spending–including overhauling Social Security, Medicare and Medicaid.
Well, that’s not really noteworthy at all–it’s exactly the sort of thing a right-leaning, corporate-funded Democratic think tank would say. What else?
Democrats have traditionally defended the program, but even some liberal lawmakers now say changes in the benefit structure are required. Last week, 32 Senate Democrats joined 32 Senate Republicans on a letter in support of a broad-based deficit reduction effort that includes changes to entitlement programs.
That letter is a rather bland call for Obama to engage more forcefully on deficit reduction–certainly not evidence of a “sharp divide.”
She also adds:
Since the program’s creation in 1935, the cost of Social Security benefits has been entirely covered by payroll taxes paid by current workers. This year, however, payroll tax revenues are projected to fall $45 billion short of covering benefits, and the problem is projected to grow as the number of retirees balloons compared with the number of working adults.
As Dean Baker points out, there have been other years when taxes did not cover benefits; the suggestion here is that this is something new. And, of course, the program’s massive trust fund surplus, which is money the Social Security system loaned to the U.S. Treasury, was designed to deal with precisely this situation. By calling it a “problem” for the trust fund surplus to be used for its intended purpose, Montgomery is suggesting that it would be better if the Treasury didn’t pay back its debts–which is an odd position for the Washington Post to take.