Wednesday, April 13, 2011

A Little Bad, A Little Good

The news about Social Security from President Obama's speech (text, as prepared for delivery, here) this afternoon at the world's greatest university is that there was no news.

That probably is good but only barely. The President remarked

As I said in the State of the Union, both parties should work together now to strengthen Social Security for future generations. But we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans' guaranteed retirement income to the whims of the stock market.

As Mr. Obama implied, we already knew the parameters of the "reform"- as most individuals lukewarm to Social Security term it- which the President eventually will support. He opposes privatization of the system, "subjecting Americans' guaranteed retirement income to the whims of the stock market." Privatization is, as should be obvious, the favorite approach of politicians who want ultimately to end Social Security.

The President opposes also "slashing benefits for future generations." There will be no proposal for "slashing" benefits (as Obama typically puts it), merely for cutting the benefits. Slashing would be too jarring and inconsistent with the President's stated intent "to use a scalpel and not a machete" (though to reduce the deficit, which is unaffected by Social Security).

There is no reason to believe that anything supported by the Administration or even the GOP will in any way be "putting at risk current retirees." Most current recipients- even, to a lesser extent, individuals old enough to be close to retirement age- understand that Social Security is critical for their well-being and is a core component of the nation's social compact. They also have more reason to be skeptical of the "CW" (conventional wisdom)- in this case a myth- that the system is running out of money.

Throughout the debate, there has been an intensive disinformation campaign trolling the myth that Social Security contributes to the budget deficit. The President should have emphasized that there is no connection but his mere statement "While Social Security is not the cause of our deficit" is commendable, and more than we typically get from (obviously) opponents of the social insurance program and (incomprehensibly) supporters of it.

The President was less candid, though, when talking about the deficit commission he established, stating

These aren't the kind of cuts that Republicans and Democrats on the Fiscal Commission proposed....

Today, I'm proposing a more balanced approach to achieve $4 trillion in deficit reduction over twelve years. It's an approach that borrows from the recommendations of the bipartisan Fiscal Commission I appointed last year....

I believe reform should protect the middle class, promote economic growth, and build on the Fiscal Commission's model of reducing tax expenditures....

Obama speaks of "the kind of cuts that Republicans and Democrats proposed"; "an approach that borrows from the recommendations of the bipartisan Fiscal Commission;' "the Fiscal Commission's model." Understandably- but disingenuously- he tries to leave the impression that the all members of the commission, Democrats and Republicans alike, joined in recommendations with serious consequences.

Except that it didn't happen that way. Section 5 of the Executive Order establishing the National Commission on Fiscal Responsibility and Reform read:

(a) No later than December 1, 2010, the Commission shall vote on the approval of a final report containing a set of recommendations to achieve the mission set forth in section 4 of this order.
(b) The issuance of a final report of the Commission shall require the approval of not less than 14 of the 18 members of the Commission.

Commission co-chairmen Bowles and Simpson were unable to gain approval of 12 other members of the group, which thereby failed to reach consensus. A final report was issued, whether to pacify the co-chairmen (who earlier had co-opted their own commission by issuing their own report) or because, well, working for several months and failing to produce something in writing really doesn't look too good.

This should be of more than passing interest to the media. The report issued by Representative Ryan, as Obama explained, is way too extreme. However, Bowles-Simpson, from a centrist Democrat and a conservative Republican, is just right for a president leading a center-right revival.

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