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Thread: Saving Social Security

  1. #1
    Havakasha is offline
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    Saving Social Security

    "Social security is not the nation's key long term fiscal problem - health care is."

    By PETER ORSZAG

    Peter Orszag on the economy, health care, education and behavioral economics.

    The budget deficit figured prominently in much of the discussion surrounding yesterday’s election. Yet the outcome of the election will do little of meaning to restrain our medium-term deficits — and arguably makes a serious medium-term deficit reduction package less likely. The silver lining is that the election could make Social Security reform more likely — if the administration chooses to jump at the opportunity.

    The shift to Republican control of the House won’t help that much in restraining medium-term deficits because most of the proposals that have been put forward are either lacking details and unlikely to be viable once the details are revealed (e.g., restraining non-security discretionary spending well beyond the administration’s freeze), or don’t have that big of an impact (e.g., freezing federal salaries, especially if the military is exempted).

    And as I have written previously, meaningfully reducing the deficit over the next five to 10 years requires a significant increase in revenue — which is even less likely to be enacted given the shift in the House. In the meantime, look for a nasty fight over a debt limit increase early next year.

    In contrast to the medium-term fiscal outlook, which is not improved by the election results, Social Security reform may be. Erskine Bowles and Alan Simpson, the co-chairs of the fiscal commission due to report at the beginning of December, have both expressed a desire to restore solvency to Social Security. And Republican leaders have previously expressed a willingness to tackle the issue too.

    Social Security is not the nation’s key long-term fiscal problem — health care is. (A column in Thursday’s Times will discuss health care.) But Social Security does face a long-term deficit, and a variety of reasonable reform plans (including one I wrote with Peter Diamond, a winner of this year’s Nobel Prize in Economics) have been proposed to address that deficit.

    The left, though, seems adamantly opposed to restoring actuarial balance to Social Security now. I have trouble understanding this reluctance for several reasons: the key issue progressives had been concerned about — individual accounts within Social Security — has been definitively won in their favor (for now); they have a president from their party in office, which will not always be the case; acting now would allow changes to take effect more gradually, cushioning the blow; and establishing some credibility on out-year fiscal problems by enacting Social Security reform could open up (admittedly limited) running room to pass necessary additional stimulus legislation in the short run.

    Given the left’s strident opposition to any serious discussion of Social Security reform, the issue will provide a key early indicator of the administration’s response to the election results.

  2. #2
    SiriuslyLong is offline
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    Quote Originally Posted by Havakasha View Post
    "Social security is not the nation's key long term fiscal problem - health care is."

    By PETER ORSZAG

    Peter Orszag on the economy, health care, education and behavioral economics.

    The budget deficit figured prominently in much of the discussion surrounding yesterday’s election. Yet the outcome of the election will do little of meaning to restrain our medium-term deficits — and arguably makes a serious medium-term deficit reduction package less likely. The silver lining is that the election could make Social Security reform more likely — if the administration chooses to jump at the opportunity.

    The shift to Republican control of the House won’t help that much in restraining medium-term deficits because most of the proposals that have been put forward are either lacking details and unlikely to be viable once the details are revealed (e.g., restraining non-security discretionary spending well beyond the administration’s freeze), or don’t have that big of an impact (e.g., freezing federal salaries, especially if the military is exempted).

    And as I have written previously, meaningfully reducing the deficit over the next five to 10 years requires a significant increase in revenue — which is even less likely to be enacted given the shift in the House. In the meantime, look for a nasty fight over a debt limit increase early next year.

    In contrast to the medium-term fiscal outlook, which is not improved by the election results, Social Security reform may be. Erskine Bowles and Alan Simpson, the co-chairs of the fiscal commission due to report at the beginning of December, have both expressed a desire to restore solvency to Social Security. And Republican leaders have previously expressed a willingness to tackle the issue too.

    Social Security is not the nation’s key long-term fiscal problem — health care is. (A column in Thursday’s Times will discuss health care.) But Social Security does face a long-term deficit, and a variety of reasonable reform plans (including one I wrote with Peter Diamond, a winner of this year’s Nobel Prize in Economics) have been proposed to address that deficit.

    The left, though, seems adamantly opposed to restoring actuarial balance to Social Security now. I have trouble understanding this reluctance for several reasons: the key issue progressives had been concerned about — individual accounts within Social Security — has been definitively won in their favor (for now); they have a president from their party in office, which will not always be the case; acting now would allow changes to take effect more gradually, cushioning the blow; and establishing some credibility on out-year fiscal problems by enacting Social Security reform could open up (admittedly limited) running room to pass necessary additional stimulus legislation in the short run.

    Given the left’s strident opposition to any serious discussion of Social Security reform, the issue will provide a key early indicator of the administration’s response to the election results.
    Not that I'll live that long, but SS needs to be "squared away". People like you and I and our our employers have paid a decent amount of money into this program and it would be nice to garner the benefit of the premium we've paid (at the age we are supposed to get the benefit).

    Candidly, if I were running for office, this would be topic number one for the reason cited above. Get it squared away and move on. To move on an agenda without addressing this lingering issue is problematic to me. I'm surprised it wasn't more of an election issue. One has to believe in the promises made already.

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