MyDD :: MyDD Exclusive: Barack Obama on the Social Security "Crisis"

MyDD Exclusive: Barack Obama on the Social Security "Crisis"

by Jonathan Singer, Thu Nov 15, 2007 at 10:41:09 AM EST

Yesterday afternoon following Barack Obama's speech and dialogue at Google I had the opportunity to speak with him for a moment about what he has had to say recently about Social Security. As you might remember, I took great umbrage last week over his use of the word "crisis" with regard to the program's outlook.

My iPod apparently didn't record my question, so I'll paraphrase it to give you an idea of what Obama is responding to in his answer below (which you can listen to through the provided player, download as an .mp3, or read in the provided rush transcript). I asked Obama why he would use the word "crisis", particularly given the fact that the Social Security trust fund will not run out until 2042 or 2052 (depending on who is doing the analysis), and that even then the program will provide greater benefits than it does today, even accounting for inflation.

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Barack Obama: I think the point your making is why talk about it right now. Is that right?

Jonathan Singer: Yeah. And why use the term "crisis"?

Obama: It is a long-term problem. I know that people, including you, are very sensitive to the concern that we repeat anything that sounds like George Bush. But I have been very clear in fighting privatization. I have been adamant about the fact that I am opposed to it. What I believe is that it is a long-term problem that we should deal with now. And the sooner the deal with it then the better off it's going to be.
So the notion that somehow because George Bush was trying to drum up fear in order to execute [his] agenda means that Democrats shouldn't talk about it at all I think is a mistake. This is part of what I meant when I said we're constantly reacting to the other side instead of setting our own terms for the debate, but also making sure we are honest and straight forward about the issues that we're concerned about.
[THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.]

Obama stopped short of renunciating the term "crisis." However he did instead speak of "a long-term problem" facing Social Security, which I have less of a problem with (at least the term itself rather than its use to connote an urgency to act NOW, an urgency that is in fact lacking). What's more, he also made clear his "adamant" opposition to privatizing Social Security, which again certainly isn't bad.

In all it's not everything that I wanted to hear. But perhaps more importantly, Obama had the opportunity to hear that folks don't want him talking about a non-existent "crisis" in Social Security. And hopefully, he will pay heed to that sentiment.

Tags: MyDD, Interview, Barack Obama, Social Security (all tags)

Permalink :: 57 Comments :: Post a Comment

So in others words (none / 0)

Obama keeps saying two different things?

I have to say this notion--pushed by his campaign and swallowed whole by the media--that he's telling us hard truths is adsurd. I've yet to hear him tell a single hard truth. What he's doing for the most part is telling the Establishment what it wants to hear.

by david mizner on Thu Nov 15, 2007 at 10:44:54 AM EST

Re: So in others words (2.00 / 1)

Where is the contradiction in what he's saying? Because I don't see one at all. It's certainly fair to disagree with his views, but there's no inconsistency here at all.

by HSTruman on Thu Nov 15, 2007 at 10:48:00 AM EST
[ Parent ]

In another (2.00 / 1)

interview that Jonathan discussed he calls it a crisis; now he says it's a longterm problem--which is something like the opposite of a crisis. Here's what he told the National Journal:

Q: So, welcome to Senator Barack Obama. Welcome to "National Journal On Air." Let me start right away by asking you about the contrasts that you are drawing between yourself and Hillary Clinton. Her campaign people, the people who support her, say by calling her somebody whose word can't be trusted, by suggesting that she's disingenuous, that that's really a character attack -- that that's the very thing that you said you weren't going to do in this campaign.

Obama: Well, I strongly disagree. Look we are offering our plans for the future on health care, on education, on energy, and the American people have a right to judge how clear and how consistent have the candidates been in their positions. Because if they're not clear and consistent, then it's pretty hard to gage how much they're going to fight on these issues. You know, Senator Clinton says that she's concerned about Social Security but is not willing to say how she would solve the Social Security crisis, then I think voters aren't going to feel real confident that this is a priority for her. And that's the kind of leadership I think that the Democratic Party has to offer in the years to come. [emphasis added]

http://jonathan__singer.mydd.com/story/2 007/11/8/232730/945

by david mizner on Thu Nov 15, 2007 at 10:58:20 AM EST
[ Parent ]

Re: In another (none / 0)

I think this shows political maneuvering on Obama's part, he saw an opportunity to bash Clinton taking the Russert talking point on Social Sec. Then he got liberal push back and has backed off.

I doubt he ever actually thought it was a crisis. Whether that serves as a plus or a minus for Obama is uncertain.

by MassEyesandEars on Thu Nov 15, 2007 at 11:16:45 AM EST
[ Parent ]

Re: In another (none / 0)

Mass -- In may of this year Obama agreed with Clinton that a bi-partisan commission would look at Social Security as they did in 1983 and come up with plans to keep it paying at 100% longer than the 2042 date at which if nothing is done it would begin to pay out at 85%.

If Obama tells us hard truths -- he speaks with a forked tongue.

by changingroom on Thu Nov 15, 2007 at 04:34:21 PM EST
[ Parent ]

Re: In another (2.00 / 1)

David -- I saw Jonathan's previous post, but as many pointed out in that thread Obama has generally referred to SS as a "problem," with his use of the term "crisis" the exception rather than the rule. When candidates are essentially "on" 24/7, as all the nominees currently are, I think it's hugely unfair to view that kind of a difference as anything approaching a substantive "inconsistency."

Look, maybe you folks are right that it's bad politics to say "crisis." But as Obama's direct statement to Jonathan makes clear, he's more concerned with talking about the issue and arriving at a progressive solution than he is with parsing laguage. Again, its fair to disagree with that conclusion if you want, but I think it's out of bounds to argue that he's somehow being less than genuine in his views.

by HSTruman on Thu Nov 15, 2007 at 11:39:26 AM EST
[ Parent ]

Fair enough (none / 0)

But more generally, I have a problem with a Democrat making Social Security reform a centerpiece of his campaign.

by david mizner on Thu Nov 15, 2007 at 11:44:54 AM EST
[ Parent ]

Re: Fair enough (2.00 / 2)

I've said this before and was roundly corrected on this site, but there are many, many (particularly young) people out there who have no faith that social security will be there in any meaningful way when they retire. You can argue that these people have been duped by the right wing wehrmacht (and you may even be correct in this assertion) but that does not change the mindset. If you view this arguably duped portion of the population as his target audience, it doesn't seem so bad.

He has basically three ways he can attack this issue: 1) Ignore it completely; 2) "You have been duped by the right wing and here are the numbers to prove it" or 3) "You are concerned about social security? OK, then, let's take care of the problem."

I would argue that the third strategy has a better chance of succeeding for two reasons. First, it allows him to bring it up and thereby get people interested in him, while keeping the volume down a bit, which is Barack Obama's brand. Second, outside of a handful of dedicated numbers-crunchers and political junkies, people just don't believe that Social Security is water-tight. And third, if he does make it to the general election, this becomes a campaign issue and his opponent will either have to cede this point to Obama or take one of about three different (and widely unpopular) positions on Social Security.

I understand the concern expressed on this website, but I don't think he could be any clearer about being opposed to privitization.

by the mollusk on Thu Nov 15, 2007 at 12:04:06 PM EST
[ Parent ]

And Obama is just making it worse (none / 0)

"there are many, many (particularly young) people out there who have no faith that social security will be there in any meaningful way when they retire. "

Obama validating this just makes it worse. THERE IS NO CRISIS. There is no long-term problem. Social Security is just fine and we have real problems to address, instead of validating right-wing narratives about government being bad.

This is not just about Social Security, it is about whether government can serve the people. Social Security is a solid program that helps a lot of people and THAT is a lot of the reason for the right's attack on it. THAT is what Obama is validating with this use of language. And language is important.

-- Seeing the Forest

by davej on Thu Nov 15, 2007 at 01:16:34 PM EST
[ Parent ]

Re: And Obama is just making it worse (none / 0)

I think with the level of mistrust people have about the ability of the government to function in any coherent way, just leaving SS totally out of the conversation is not wise. Look, the democrats were basically swept into power last year and have proven themselves to be sternly-worded memo generating machines without many concrete accomplishments.

Frankly, if Harry Reid, flanked by Chuck Schumer, Diane Feinstein and Joe Lieberman stood in front of a podium and stated flatly that social security is not in crisis, not in trouble and needs no further tinkering, I would be worried.

I think when people have fears, rational or not, you have to actually address those fears rather than tell them it's all ok and now let's talk about something else.

There's a good argument to be made that we should focus on medicare instead. And that is certainly hard to refute. But I'm not aware that any other candidate has addressed this in any real way.

by the mollusk on Thu Nov 15, 2007 at 02:45:43 PM EST
[ Parent ]

Re: Fair enough (none / 0)

The Republican scare tactics have been going on a long time. When I was young we were told by Republicans that Social Security would not be there for us. Well now I am collecting SS. So much for the BS about SS.

by changingroom on Thu Nov 15, 2007 at 04:43:49 PM EST
[ Parent ]

Re: Fair enough (none / 0)

Out-of-control deficits means future retirees will have to fend for themselves because we've worsened the coming Social Security crisis and spent their money. And out-of-control deficits means that America may not be at full economic strength when we have to deal with some future crisis, like 9/11 and the war on terrorism. It is time to restore fiscal discipline to Washington for good.

Guess who!

by Adam B on Thu Nov 15, 2007 at 01:26:33 PM EST
[ Parent ]

(Nevermind. Saw that NL already...) NT (none / 0)

by Adam B on Thu Nov 15, 2007 at 01:26:55 PM EST
[ Parent ]

Re: Fair enough (none / 0)

I respect that view, even if I don't necessarily agree with it. Politically, I think there is a benefit to Democrats being viewed as willing and able to address entitlement programs including, but not limited to, SS. But reasonable minds can certainly differ on that issue.

by HSTruman on Thu Nov 15, 2007 at 01:46:33 PM EST
[ Parent ]

Re: Fair enough (none / 0)

David -- I have a problem with a Democrat making this a huge issue but I also have a problem with any Democrat who is a darling of the neocon media.

by changingroom on Thu Nov 15, 2007 at 04:35:32 PM EST
[ Parent ]

Re: So in others words (none / 0)

Its not a contradiction if you believe what the Republicans want you to believe that Social Security is in Crisis. It is not. The only thing thats in crisis is the social safety net which President Roosevelt passed and which has given this country its strong middle class. Republicans want to privatize everything including our healthcare system. All of us would have to hunt down our own healthcare with no guarantee of coverage.

We must tell Obama that we are sick and tired of the scare tactics.

by changingroom on Thu Nov 15, 2007 at 04:30:55 PM EST
[ Parent ]

'The coming Social Security crisis' --John Edwards (none / 0)

Senator John Edwards

FORTUNE Global Forum

Washington, DC
November 12, 2002

Out-of-control deficits means future retirees will have to fend for themselves because we've worsened the coming Social Security crisis and spent their money. And out-of-control deficits means that America may not be at full economic strength when we have to deal with some future crisis, like 9/11 and the war on terrorism . It is time to restore fiscal discipline to Washington for good.

Obama's Pop. Vote LEAD = 600K | Clinton & McCain = WAR Authorizers

by NeuvoLiberal on Thu Nov 15, 2007 at 12:23:04 PM EST
[ Parent ]

Um (none / 0)

From five years ago, before Bush's attempt to privatize.

And he's said coming--as in, if we don't do someting, it'll be a crisis.

You're are bore, NL.

by david mizner on Thu Nov 15, 2007 at 12:29:02 PM EST
[ Parent ]

Great show of 'Politics of parsing', David! (none / 0)

"From five years ago, before Bush's attempt to privatize."

My friend, Bush RAN ON and promised social security privatization in 2000.

You were running around trying to make hay for Edwards at Obama's expense by bickering about Obama's use of a word.

Now we know Edwards used the word, and you resort to politics of parsing. A pitiful display of pettiness, David.

Obama's Pop. Vote LEAD = 600K | Clinton & McCain = WAR Authorizers

by NeuvoLiberal on Thu Nov 15, 2007 at 12:39:40 PM EST
[ Parent ]

And, yes, 2002-2004 AD were real years that (none / 0)

haven't yet been wiped off the Gregorian calendar.

Obama's Pop. Vote LEAD = 600K | Clinton & McCain = WAR Authorizers

by NeuvoLiberal on Thu Nov 15, 2007 at 12:42:55 PM EST
[ Parent ]

Re: Social Security Is Not In Crisis (none / 0)

The Republican Media wants people to believe there is a long term Social Security crisis. When in actuality there is only going to be a 12 year short fall while SS incorporates the Boomers into the system. As the boomer's children begin to retire Social Security will once again maintain a surplus. This is because boomers had relatively few children compared to other generations. In any case if nothing is done Social Security will continue to pay out at 100% until 2042 and 85% thereafter. The bi-partisan commission which is something which has been used every 20 years or so will see what is needed to keep Social Security paying out longer and take whatever steps are necessary for Social Security to continue well into the future as the successful self sustaining program it is.

SOCIAL SECURITY IS NOT IN CRISIS. That is the bottom line. Shame on you--Obama for giving the neocon talking points.

by changingroom on Thu Nov 15, 2007 at 04:25:05 PM EST
[ Parent ]

"Crisis" (none / 0)

you know what I agree Obama should come up with a different word than crisis describing the Social security issue. I agree with Obama on the problem but the word "crisis" has been too much defined by the way Republicans frame the issue.

Obama! because 51% isn't enough!

by nevadadem on Thu Nov 15, 2007 at 10:47:45 AM EST

Re: "Crisis" (none / 0)

No, actually "crisis" has been pretty well defined by, uh, the English language.

by david mizner on Thu Nov 15, 2007 at 10:59:20 AM EST
[ Parent ]

Re: "Crisis" (none / 0)

No matter what word you use Social Security is not in Crisis. The boomers will only be in the system for about 12-15 years. I know it comes as a shock to people who think the boomers will be effecting the system for 1,000 years.

by changingroom on Thu Nov 15, 2007 at 04:26:29 PM EST
[ Parent ]

Re: MyDD Exclusive: Barack Obama on the Social Sec (none / 0)

Would you guys have any problem whatsoever if it wasn't for the fact Bush couched the problem in those terms when trying to sell privatization?

by Piuma on Thu Nov 15, 2007 at 11:02:25 AM EST

Re: MyDD Exclusive: Barack Obama on the Social Sec (none / 0)

"The problem"

THERE IS NO PROBLEM with Social Security. Stop it.

-- Seeing the Forest

by davej on Thu Nov 15, 2007 at 01:17:35 PM EST
[ Parent ]

Social Security is solvent (none / 0)

Bush created the issue because he wants to privatize Social Security. In 1978 when Bush ran for Congress he said the Social Security money was running out. A statement by Rush Limbaugh rings in my ears. ROOSEVELT IS DEAD AND WE ARE IN THE PROCESS OF KILLING OFF HIS SOCIAL SAFETY NET

When Bill Clinton left office Social Security was secured until 2055, now its 2042 so when Hillary says we can grow Social Security back with a better economy she is right. The more people working and paying in to SS the longer it will run at 100%.

THERE IS NO SOCIAL SECURITY CRISIS

by changingroom on Thu Nov 15, 2007 at 04:42:09 PM EST
[ Parent ]

Republicans and Privatization (none / 0)

Republicans do not want a strong middle class. Greenspan once said his job was to keep the American worker insecure.

How come Social Security is only a problem when a Republican is in office. I wonder if the quid pro quo for Obama is he has to toss Republican talking points into the mix if the wants the support of the neocon media.

The question is really why do the Republicans hate the middle class.

by changingroom on Thu Nov 15, 2007 at 04:49:22 PM EST
[ Parent ]

red herring (2.00 / 2)

Nobody thinks Obama wants to privatize Social Security, the problem is that he wants to play footsie with the people who do (Russert).

The substantive problem with his proposal, immediately raise the cap, is that all it does is give the Republicans more money in the trust fund that they can waste on more war and tax cuts for the rich. The correct solution, get our fiscal house in order by adjusting our tax system back, does not appeal to Obama.

by souvarine on Thu Nov 15, 2007 at 11:10:25 AM EST

Re: red herring (none / 0)

You nailed it. That is the real "crisis" and Obama's "solution" would only serve to make all things budget much worse, in the short and long terms. Getting our fiscal house in order now and revving up the economy over the next twenty years would likely generate enough growth in the number of tax payers that the social security "problem" will just keep receding off into the future, always looming twenty or thirty years over the horizon.

by Arthurkc on Thu Nov 15, 2007 at 11:16:00 AM EST
[ Parent ]

Re: red herring (none / 0)

Better than that, once we get through the tight period as the baby boomers pass on around 2040 any "crisis" recedes beyond the foreseeable future. It doesn't loom at all.

by souvarine on Thu Nov 15, 2007 at 11:32:47 AM EST
[ Parent ]

Re: red herring (none / 0)

Raising the cap would hurt the economy. I believe we can grow the economy and with more jobs we can make Social Security pay out at 100% longer than 2042. When Clinton left office SS was paying out until 2055 at 100%.

Number one we have to stop Presidents from taking the SS money. Remember Al Gore's lock box. He was right.

by changingroom on Thu Nov 15, 2007 at 04:51:53 PM EST
[ Parent ]

Re: MyDD Exclusive: Barack Obama on the Social Sec (2.00 / 2)

What I believe is that it is a long-term problem that we should deal with now. And the sooner the deal with it then the better off it's going to be.

Argh! But it just isn't so!!! And he went to Harvard!!!! /bangs head against desk

Just yesterday Bruce Webb spelled it out in the latest of his excellent Social Security diaries.

The Social Security Trust Fund is often thought of as a Savings Account. Under this conceptualization raising the cap and putting the resulting funds into it seems a simple matter of topping off the account for a rainy day. Well that is not really how it works. Social Security taken as a whole works more like a Checking Account with dollars being deposited every payday and checks written out. The Trust Fund itself serves as the Balance, an amount held in Reserve for expected and unexpected contingencies. By law the Social Security Trustees are supposed to target Short Term Actuarial Balance, meaning at least a year in reserves for each of the next ten years. By that measure the combined OAS and DI Trust Funds are currently in balance and are projected to remain so until about 2027.

While the Trust Fund could hold assets in other asset classes it currently holds them in the form of interest earning Special Treasuries. Given that the system is running high levels of surplus today and for most of the rest of the decade the effect of raising the cap is simply to lend even more money to the General Fund with the side effect of creating a greater interest burden going forward. Certainly you can push back the date of shortfall but only at the risk of creating every greater tension between the General Fund and the SS Trust Fund.

"Another problem we have...is that in election years we behave somewhat as primitive peoples do at the time of the full moon." --Harry Truman

by Steve M on Thu Nov 15, 2007 at 11:19:32 AM EST

Agree (2.00 / 1)

This answer from Obama is extremely weak.

It is wrong on the merits.

It is wrong on the politics.

by Big Tent Democrat on Thu Nov 15, 2007 at 11:27:03 AM EST
[ Parent ]

Re: MyDD Exclusive: Barack Obama on the Social Sec (none / 0)

I would argue that the people who read and understand Bruce Webb's blog are not the target audience here.

by the mollusk on Thu Nov 15, 2007 at 12:07:32 PM EST
[ Parent ]

Re: MyDD Exclusive: Barack Obama on the Social Sec (none / 0)

Of course they're not, but that's not an excuse for saying something that isn't true.

"Another problem we have...is that in election years we behave somewhat as primitive peoples do at the time of the full moon." --Harry Truman

by Steve M on Thu Nov 15, 2007 at 12:12:07 PM EST
[ Parent ]

Re: Social Security "Crisis" (2.00 / 1)

It's not a crisis. But if Democrats happen to win the Presidency and greatly increase their majorities in Congress, seizing the moment to adjust the system in ways that Democrats prefer wouldn't be a bad idea. (And forget about the bi-partisan commission.) George Bush failed in his attempt to privatize Social Security, but we can't be certain that another (cleverer) Republican President in the future might not be able to carry it off.

by sherrylynn on Thu Nov 15, 2007 at 11:35:03 AM EST

Re: Social Security "Crisis" (none / 0)

Exactly -- well said. Honestly, I would hope that whoever wins the Dem nomination (and therefore becomes the next POTUS) uses the likely stronger Congressional majorities we'll have to deal with SS from a position of strength.

by HSTruman on Thu Nov 15, 2007 at 11:41:44 AM EST
[ Parent ]

Re: Social Security "Crisis" (none / 0)

No, no one has to "deal with" anything.

Social Security is the very symbol of government serving the people. It is the greatest government program ever devised. It is sound. It has lasted since the 30s. It has built up a huge surplus and is positioned to cover retirement benefits forever - with no problems at all. Period. There is nothing to discuss.

The right attacks it for that reason, says there is "a problem" with it. Tries to get people to feel funny about it. Tries to make it complicated. The whole time the "network of associations" in the brain that is activated is really saying that people can't trust government and therefore can't trust Democrats - even Obama.

There is no problem, there is no shortfall, there is nothing that has to be dealt with. Government is good, Democrats are good and are there to serve you.

Obama saying ANYTHING about Social Security having any kind of problem is actually further validating the right's entire anti-government narrative, that it even MIGHT not be there someday if we don't constantly tinker with it, etc, says to people that they can't trust government.

"We face tough choices, we have to deal with the problem some day, people are avoiding discussing it, those other candidates are just hiding the truth from you" -- saying ANYTHING along those lines psychologically destroys HIS OWN campaign in the minds of the very people he wants supporting him.

I suggest that people read The Political Brain by Drew Westin.

-- Seeing the Forest

by davej on Thu Nov 15, 2007 at 01:39:24 PM EST
[ Parent ]

Re: Social Security "Crisis" (none / 0)

You know, stating your view and then saying "period" is not actually a great way to have a conversation.

I'm a progressive Democrat and I disagree with your approach to SS. And not because I'm an Obama supporter. I understand your argument, but agree with Obama that its silly to think Democrats can't even say something is a long term problem b/c GWB made the same point as part of a privatization scheme. The idea is to address SS, in a progressive way, from a position of relative strength. Again, that's fine if you disagree but it's really quite juvenile to act as if that viewpoint is somehow objectively invalid.

by HSTruman on Thu Nov 15, 2007 at 01:51:19 PM EST
[ Parent ]

Re: Social Security "Crisis" (none / 0)

There is no "long-term problem" with Social Security. Period.

There is nothing to "address". Period.

-- Seeing the Forest

by davej on Thu Nov 15, 2007 at 02:54:50 PM EST
[ Parent ]

Re: Social Security "Crisis" (none / 0)

Let me be a bit more specific. ;-)

If you account for Social Security in a certain way, with worst-case scenarios and assumptions of economic growth that fall way below average, then after a few decades there is a chance that Social Security could see some "shortfalls" where some support is required from the general fund.

Meanwhile, because of Republican mismanagement, the US government today has racked up a HUGE, massive,unbelievable debt and runs hundreds of billions in the hole every year. We pay over $433 billion in interest on that debt each year.

The magnitude of the "problem" of the US budget is so vastly beyond anything Social Security would ever face that there is not just no reason to talk about Social Security, but leads to questions of motives of anyone who does so.

The problem that needs to be address is the huge, massive, devastating, unsustainable, crushing budget deficit and debt. Period.

-- Seeing the Forest

by davej on Thu Nov 15, 2007 at 03:16:17 PM EST
[ Parent ]

Re: Social Security "Crisis" (none / 0)

Your :) helped, even with all the "periods." LOL

Look, obviously we have to fix the structural deficits GWB has created. I feel pretty confident ALL of the Democratic candidates will address that issue. We obviously have to pass universal health care, b/c the system is broken and there is huge momentum for that change. Again, I feel confident that ANY of the Democratic candidates will at least try to get that done as well.(some, imo, are better situated to create a coalition to actually achieve that goal). But there is simply nothing inconsistent with addressing those issues AND dealing with our entitlement programs. Period.

by HSTruman on Thu Nov 15, 2007 at 03:46:03 PM EST
[ Parent ]

Rosser's Equation (none / 0)

To strengthen Dave's point. The scheduled Social Security benefit is structured so that each generation gets a better real return than a similarly situated retiree today. That is when translated in actual goods and services future checks will deliver more than current ones do for people with the same income trajectory.

Under the current schedule the benefit in 2041 would be 160% in real terms compared to a current one. At Trust Fund depletion that year benefits automatically get cut to match current income. That cut is now projected to be 25%. Well as Prof Rosser of GMU points out 75% of 160% = 120%.

You can give them every single gloomy assumption they have and future retirees STILL get a better deal in real terms.

There really is no crisis, even on their own terms. And there is no good reason to say that 2.0% Real GDP is a valid median projection over the long term. Any rate of growth over that serves to push the 2041 date backwards. Will we get seven years of Real GDP growth at the 3.3% rate that would guarantee total solvency? (Low Cost)? Table V.B2 Well who knows. But we beat that in six of the eleven years from 1996 to 2006, matched it once, and missed it by a fraction with 3.2% in 2005.

Is fully funded Low Cost too optimistic at a spot or two? Well probably. On the other hand 2.0% ultimate GDP is nonsense, certainly as a median. Growth rates between Intermediate Cost's 2.0% and Low Costs 2.8% (both ultimates) are likely with the bias being towards the top of the range. There is every reason to expect depletion to continue to recede into the future, which is currently doing at more than a year per year. When that trend reverses then get back to me. Until then I am sticking with Nothing.

PollKatz: Bush Approval in 15 polls

by Bruce Webb on Thu Nov 15, 2007 at 03:55:54 PM EST
[ Parent ]

Re: Social Security "Crisis" (none / 0)

Obama himself agreed will Hillary in May of this year -- if there were any problems a bi-partisan commission similar to that of the one in 1983 would come up with a solution.

Hillary should bring that up tonight.

by changingroom on Thu Nov 15, 2007 at 04:54:56 PM EST
[ Parent ]

All solutions are worker unfriendly (none / 0)

You can adjust projections for solvency by increasing taxes, cutting future benefits, or increasing retirement age. All three call for sacrifice from workers, sacrifices that a sober analysis of the numbers show are more than likely unnecessary.

Because Nothing is a plan. Moreover it is a numerically validated plan. You can show that not moving on Social Security in 2004 provided a near optimal outcome, workers kept three years of potential tax increases in their wallets and inherited a problem going forward that doesn't offset that savings.

A change in assumed interest took the payroll gap from 1.92% in 2005 to 2.02% in 2006. Was this proof we should have moved on this in 2005? Well not to me or anyone older than me. Our one year savings from not moving exceed the extra projected cost going forward. Of course not everybody is fifty. On the other hand that change in assumed interest was kind of bogus, without it the gap would have been 1.96% which would have made Nothing a winning bet for everyone over 35. Well we didn't move on this in 2005 and we didn't move on it in 2006. What was the end result?

Well for 2007 the payroll gap dropped back to 1.95%. Which made the cumulative Cost of Inactivity negative for everyone. Doing Nothing left more than enough money in your wallet to compensate for the overall change from 2004's 1.89% to 2007's 1.95%. Plus any amount of Real GDP over 2.0% for Q4 should make the gap shrink yet again for 2008, once again making everyone a winner.

Nothing may not hold up as a long term plan, but it is holding up excellently as a short term plan. You just have to take it quarter by quarter and year by year.

Nobody has been able to make the numeric case that I need to give up anything. I don't want a tax increase, I don't want a benefit cut, I don't think the retirement age should be increased yet again. If somebody can show me that inaction is actually making the outcome worse for the majority of the people then I am open for suggestions. But no one has actually been able to make that case with real numbers. Until then I Got Plenty of Nothing.

PollKatz: Bush Approval in 15 polls

by Bruce Webb on Thu Nov 15, 2007 at 03:31:42 PM EST
[ Parent ]

Re: All solutions are worker unfriendly (none / 0)

Bruce-when Bill left office SS was paying out at 100% till 2055, now its 2042. We can grow our way back and if we stop letting presidents dip into the SS trust fund it will be there no problem.

We don't need any more scare tactics -- we have had enough to last us a lifetime.

I agree with everything you said in your great post.

by changingroom on Thu Nov 15, 2007 at 04:57:41 PM EST
[ Parent ]

Re: All solutions are worker unfriendly (none / 0)

Bruce -- yours is a very thoughtful post. However, that assumes there is a problem with Social Security which there is not. The only problem is not having a lock box as Al Gore suggested which allows Presidents to take it. When Bill Clinton left office SS would continue to pay out at 100% until 2055 now its 2042. We can grow SS back to the 2055 number if we grow our economy.

Republican Presidents equal problems with the Social Safety net. Even the stockmarket does not want the Social Security money invested. They don't need millions of little investors. The whole thing is ludicrous.

by changingroom on Thu Nov 15, 2007 at 05:06:49 PM EST
[ Parent ]

Apples and oranges (none / 0)

Hillary misspoke. The 2055 date built in policies that never were enacted into law. The official date in 1999 for depletion was 2034 now improved to 2041.
2042 was the 2004 date. Why it moved from 2042 in 2004 to 2041 in 2005 to 2040 in 2006 to 2041 in 2007 is worthy of discussion but would require a certain focus at the data table level. See you at the Econoblogs.

PollKatz: Bush Approval in 15 polls

by Bruce Webb on Thu Nov 15, 2007 at 09:30:37 PM EST
[ Parent ]

Re: Apples and oranges (none / 0)

2055 was the projection when Clinton left office. Everything is just a projection which is why SS needs to be tweaked every few years. The biggest problem with SS is that Presidents borrow from the trust fund. Bush considers Social Security part of the General Revenue and therefore believes he has a right to use it.

The last time SS was tweaked was in 1983 when the projection was 2011. The point is that Democrats want Americans to continue to get SS because for some people it is the only pension they will have. While Republicans want the program gutted. Its sad that the country is so divided. I believe this is why a bi-partisan commission is the best way to go.

by changingroom on Fri Nov 16, 2007 at 01:49:43 AM EST
[ Parent ]

No it wasn't (none / 0)

Not per the Trustees of Social Security which included three Clinton Cabinet members.
http://www.ssa.gov/OACT/TR/TR00/tr00.pdf

In the long range (i.e., the next 75 years) the difference between the summarized income and cost rates for the OASDI program is a deficit of 1.89 percent of taxable payroll based on the intermediate assumptions, which is smaller than the difference of 2.07 percent in last year's report. The assets of the combined OASI and DI Trust Funds are estimated to be depleted under present law in 2037 based on the intermediate assumptions. At that time, the estimates indicate that annual tax revenues would be sufficient to cover 72 percent of annual expenditures.

Hillary was talking apples and oranges. When you look at it apple to apple the relevant figures are 2037 in the 2000 Report and 2041 in the 2007.

You are doing great work here. But I read the 2000 Report when it came out, I have it in PDF and have a paper copy somewhere. It never said 2055 in any shape or form.

PollKatz: Bush Approval in 15 polls

by Bruce Webb on Fri Nov 16, 2007 at 12:24:17 PM EST
[ Parent ]

Re: No it wasn't (none / 0)

I can only tell you one thing -- Democrats want Social Security in tact and Republicans want to kill it. Everytime a Republican gets in they say Social Security is in trouble. I have heard that since I was a kid. I trust your knowledge about Social Security and I do believe that taxes will need to be raised but mainly because Bush decided to call SS part of the general revenue used it to make the budget deficits look less problematic.

The Republicans have called us Dems tax and spend liberals for a long time and now its difficult to tell people that we will need to raise taxes at some point. But I do believe that Obama using the term Social Security Crisis to frighten Americans is part of the Republican fear and smear talking points and will not do him any good. It appears to be a quid pro quo for all the positive media attention he has been given.

Hillary is a good candidate because she makes people feel positive again. I went to one of her events and people of all ages went crazy for her. Whatever, you think about Bill Clinton he did his job and never frightened the people. We must not underestimate what 7 years of fear can do. It was shocking to read that Americans believe this country is in a downward cycle and that our best days are behind us.

Back to Social Security for a moment. Seniors are now viable consumers because of SS and Medicare. If we remove these two things from the equation we lose this base of consumers and are left with frightened sick people whose longevity will be greatly diminished. We cannot allow this to happen.

by changingroom on Fri Nov 16, 2007 at 02:57:28 PM EST
[ Parent ]

Re: MyDD Exclusive: Barack Obama on the Social Sec (none / 0)

"I know that people, including you, are very sensitive to the concern that we repeat anything that sounds like George Bush."

Excuse me? This from the man who called Clinton "Bush-Cheney Lite"?

Now that's audacity!

by BigBoyBlue on Thu Nov 15, 2007 at 12:07:26 PM EST

Re: MyDD Exclusive: Barack Obama .... (none / 0)

Your bumpers are so long

by JoeFelice on Thu Nov 15, 2007 at 02:34:41 PM EST

Re: MyDD Exclusive: Barack Obama on the Social Sec (none / 0)

gladiator -- I have a solution to that problem. Don't vote for Obama.

by changingroom on Thu Nov 15, 2007 at 04:59:03 PM EST

Re: MyDD Exclusive: Barack Obama (none / 0)

Any Democrat is better than a Republican except a Democrat who is the neocon media darling. That worries me.

by changingroom on Thu Nov 15, 2007 at 05:07:59 PM EST
[ Parent ]

Re: MyDD Exclusive: Barack Obama on the Social Sec (none / 0)

robert reich:

First, HRC attacked O's plan for keep Social Security solvent. Social Security doesn't need a whole lot to keep it going - it's in far better shape than Medicare - but everyone who's looked at it agrees it will need bolstering (I was a trustee of the Social Security Trust Fund ten years ago, and I can vouch for this). Obama wants to do it by lifting the cap on the percent of income subject to Social Security payroll taxes, which strikes me as sensible. That cap is now close to $98,000 (it's indexed), and the result is highly regressive. (Bill Gates satisfies his yearly Social Security obligations a few minutes past midnight on January 1 every year.) The cap doesn't have to be lifted all that much to keep Social Security solvent - maybe to $115,00. That's a progressive solution to the problem. HRC wants to refer Social Security to a commission. That's avoiding the issue, and it's irresponsible: A commission will likely call either for raising the retirement age (that's what Greenspan's Social Security commission came up with in the 1980s) or increasing the payroll tax on all Americans. So when HRC charges that Obama's plan would "raise taxes" and her plan wouldn't, she's simply not telling the truth.

http://robertreich.blogspot.com/2007/12/ why-is-hrc-stooping-so-low.html

I really don't understand how that is an attack; lol. ~ by Jerome Armstrong

by jello on Wed Dec 05, 2007 at 07:57:58 PM EST

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