Editore"s Note
Tilting at Windmills

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February 19, 2009

THE FISCAL RESPONSIBILITY SUMMIT.... Whenever President Obama or anyone associated with his administration utters the phrase "entitlement reform," it generates an audible gasp. The fear, of course, is that the White House might buy into conservative rhetoric about weakening Social Security.

Those concerns are especially acute now, on the eve of next week's "fiscal responsibility summit," which may include some high-profile figures who see entitlement "crises" where none exist.

For what it's worth, I'm not worried. Obama has always been entirely consistent on the issue -- Social Security isn't a crisis; Medicare needs to be addressed in the context of the healthcare system's larger problems.

Those close to the president keep saying the same thing. OMB Director Peter Orszag, who'll help lead the "fiscal responsibility summit," said all the right things to Ben Smith yesterday.

Orszag's long-running project -- something that has made the Left's favorite Cabinet member -- has been replacing talk of an "entitlement crisis" with his argument that Social Security requires only modest tax hikes and benefit cuts, while Medicare and Medicaid have much more dramatic fiscal woes.

"Social Security faces an actuarial deficit over the next 75-100 years. In the past I've resisted the term 'crisis' to describe that kind of situation," he said. "This is not quantitatively as important as getting healthcare done."

Ezra Klein spoke to administration sources who said progressives really don't have anything to worry about. "The most likely outcome at this point," one senior administration official told him, "is that we focus on health care, given that it's the key to our fiscal future."

The administration does not think about the "entitlement question." Rather, there are two sets of programs. One is Social Security. There's a tendency for post-Bush progressives to quake when Social Security's finances are called into question. But the Obama administration includes two of the economists most closely associated with the effort to beat back Social Security privatization (others were Dean Baker, Brad DeLong, and Paul Krugman). Peter Orszag, now head of OMB but then at Brookings, and Jason Furman, the staff economist for the National Economic Council but then allied with the Center for Budget and Policy Priorities, both helped craft and coordinate the response to Bush's proposal, and were central to the effort to warn moderate Democrats off of the President's plan.

There is no replay of Bush's crisis-mongering the offing. No commission headed by Kent Conrad with a mandate to cut the program. Any fixes would look more along the lines of, well, the Orszag-Diamond proposal -- which most liberal embraced as the responsible alternative in 2005 -- than the Pete Peterson plan.

If anything, the "fiscal responsibility summit" appears to be a vehicle for advancing the Obama healthcare agenda. Works for me.

Steve Benen 11:20 AM Permalink | Trackbacks | Comments (26)

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Comments

Imagine that, President Obama turning the fiscal responsibility summit back on the conservatives who thought he was going to use it to talk about cutting entitlement programs and instead he is going to use it to hit them over the head with the need for universal healthcare. The Chessmaster strikes again. BTW, I hope this information makes its way to Dean Baker who did a fare share of rumor fueled fear mongering over SS in the past week on progressive sites.

Posted by: sgwhiteinfla on February 19, 2009 at 11:31 AM | PERMALINK

"I'm not worried."

I hope you're right, but (noting that you've always given Obama the benefit of a doubt that he increasingly does not deserve) my gut fear is that you are whistling past the graveyard. Especially since this "summit" is competely bought and paid for by anti-Social Security as-we-know-it types like the Blue Dogs, Pete Peterson, and, yes, Peter Orszag. Either through natural inclination (both personal and political), arrogance, or naivete, Obama seems musch more interested in pleasing these numerically minute, but powerful in the Village, High Broderite constituencies than the millions who actually elected him. Be afraid. Be very afraid.

Posted by: Marlowe on February 19, 2009 at 11:39 AM | PERMALINK

"Imagine that, President Obama turning the fiscal responsibility summit back on the conservatives who thought he was going to use it to talk about cutting entitlement programs and instead he is going to use it to hit them over the head with the need for universal healthcare. The Chessmaster strikes again. BTW, I hope this information makes its way to Dean Baker who did a fare share of rumor fueled fear mongering over SS in the past week on progressive sites."

I just have to laugh at this Obamabot drivel. Every apparent lurch to the right by Obama, every concession to Rethugs and Broderites, every betrayal of Democratic, and democratic, principles is actually a brilliant, many layered ju jitsu move on the right by Barack Obama, secret liberal, master of 11-dimensional chess. Sometimes a duck is just a duck.

Posted by: Marlowe on February 19, 2009 at 11:44 AM | PERMALINK

To me, it boils down to this. Who is Obama gonna sell out? The Blue Dogs, to whom he no doubt promised he would "tackle entitlements" in exchange for their keeping quite about the stim, or the seniors?

Posted by: anon on February 19, 2009 at 11:45 AM | PERMALINK

Correct me if I am wrong on the numbers, but the Medicare Part D benefit would have cost even more than the projected shortfall in Social Security benefits over the next few decades. If that's the case, nobody associated with the idea of a Social Security "crisis" has a leg to stand on.

Posted by: Brian J on February 19, 2009 at 11:47 AM | PERMALINK

I would like to see welfare be part of entitlement reform. I think it must be reformed if we are to get nationalized healthcare. I am all for helping the poor yet our country does little to supervise what is going on. There are many (and I have first hand knowledge) who are registered for welfare in one name and work a full-time job in another name. There are welfare recipients who are not elderly that have been getting assistance for literally years and years with no incentive to get off.

Not only do we not supervise the system well but the rules are ridiculous. I know a woman with kids who was left destitute by her husband. She moved in with relatives and started collecting welfare - no problem. But when she wanted to get a part-time job at her kids' school she was told she would lose healthcare benefits if she took the job. Hence, she became completely reliant on welfare.

Posted by: coral on February 19, 2009 at 11:49 AM | PERMALINK

"Social Security faces an actuarial deficit over the next 75-100 years. In the past I've resisted the term 'crisis' to describe that kind of situation," he said.

Contrasted with the possible extinction of polar bears in 40-50 years. Notice how the Bush administration played up the Social Security "crisis" while doing next to nothing about polar bears.

Posted by: Grumpy on February 19, 2009 at 11:59 AM | PERMALINK

If the summit is a way to advance the health care agenda, fine.

But having discussions that include "Social Security requires only modest tax hikes and benefit cuts" just jumps the shark.

CBO says current benefits can be paid for 40 years, at current rates. Changes can wait and attention should be given the the real crisis, Medicare and Medicaid.

And welfare reform? There's a 5 year lifetime limit, and welfare checks are nothing you want to have to live on. Anyone who thinks welfare is a good deal should try and get by on whatever amount your state is paying. Try it for a year.

Posted by: zak822 on February 19, 2009 at 12:04 PM | PERMALINK

The question is, why does anything need to be done to Social Security during this Administration?

In 1997, the Social Security Trustees projected a 2029 date for the exhaustion of the SS Trust Fund.

By 2002, that date had moved back to 2041.

Last year, Orszag's CBO projected a 2049 date for Trust Fund exhaustion.

Let's do something about Social Security when the projected exhaustion date of the Trust Fund gets substantially closer, 'kay?

Posted by: low-tech cyclist on February 19, 2009 at 12:09 PM | PERMALINK

Marlowe let me go by the numbers

1. Closing GITMO

2. Banning Torture

3. Recinding the Mexico City Policy

4. Lilly Ledbetter Act

5. CHIP

6. Stimulus bill with a middle class tax cut and billions for green energy and infrastructure projects.

NAH that guy aint a liberal. He is center right!

LOL If I am an Obamabot you are DEFINITELY a concern troll.

Posted by: sgwhiteinfla on February 19, 2009 at 12:18 PM | PERMALINK

I really don't understand what liberals who attack Obama for things he hasn't said or done imagine they're doing. If he's going to screw us over, you won't have prevented that because you warned us about it before it happened. Because it's obvious he wouldn't care what you think, while the rest of us refuse to join you because there's nothing to join. And if you're wrong, then you just piss everyone off and cause a big fight for nothing. And that's the more likely scenario. For as much as we've been warned for over a year about how scary Obama is for liberals, it just hasn't materialized.

And I think the real problem is that some people just don't know what to do when they're on the winning side. They're activists who only know how to protest from the outside and attack the Establishment for screwing them over. And that's fine when that's what's happening. But when that's not what's happening, like right now, then it's just causing headaches for nothing. And no, every non-progressive signal coming from Obama isn't proof that he's selling us out. And yes, if Obama announces his intent to gut Social Security, we will all join you in attacking him. But until then, you're just being counter-productive.

And as always, if you want to see Obama act like a liberal, then you need to pressure Congressional Dems to pull him that way. It's in Obama's best interests to pass our agenda, as it's the right agenda. We just need to make that as easy for him as possible. We need for Congressional Dems to get out there and give him the political cover he needs to make that happen.

Posted by: Doctor Biobrain on February 19, 2009 at 12:24 PM | PERMALINK

I think BHO & Orzag have also said consistently that reform of tax entitlements - i.e. loopholes & tax deductions/exclusions that don't make sense - are part of the 'entitlement reform' / 'fiscal sustainability' discussion.

All good, though I can't see any way around some significant tax increases over the next 10-20 years, and probably the sooner they kick in (once the economy's growing well again) the smaller the hike will need to be.

Posted by: tw on February 19, 2009 at 12:32 PM | PERMALINK

Dr. B, I would like to subscribe to your newsletter.

Also, I would like to suggest that we also need some far-left lefties making enough noise that the public at large is clear about what socialism is and is not.
For instance:
"We need to ramp up military spending, 'cause that's real stimulus and not socialism like extending welfare and unemployment benefits!"
Counter-meme:
"We need to nationalize Lockheed, Boeing and McDonnell-Douglas and turn them over to the employees, so we can get more aircraft for less money and not need welfare!"

Posted by: kenga on February 19, 2009 at 12:36 PM | PERMALINK

I suspect most of the concern trolls who criticize Obama from "the left" are Naderites, or from the Marxist Left. They act like, and participate in Democratic Party politics in even numbered years, and try to recruit the most left-leaning Democrats in the odd-numbered years. They've been doing this since 1933, for crying out loud. They've neither strengthened the Democratic Party, or built an alternative Left Party in all that time, but they are faithful to their mission.

Posted by: Tom in MA on February 19, 2009 at 12:37 PM | PERMALINK
There are many (and I have first hand knowledge) who are registered for welfare in one name and work a full-time job in another name.

...Not only do we not supervise the system...

- coral on February 19, 2009 at 11:49 AM

If you have firsthand knowledge of a crime being committed then a good start would be to pick up the phone and report the crime. Less typing, more supervising please.

Posted by: jimmiraybob on February 19, 2009 at 12:42 PM | PERMALINK

I've led a sheltered life.
The only two welfare queens I have met have been white men.

Posted by: kenga on February 19, 2009 at 12:52 PM | PERMALINK

1. Actually, Obama has not been "entirely consistent." At one point in the campaign he criticized Clinton for not recognizing that Social Security was in crisis.
2. Even when it comes to "minor" "tinkering," we need to be on the lookout. There is no good reason for any solution to involve raising the retirement age or lowering the benefits. These are horribly regressive approaches. What about raising marginal income tax rates? Why is making SS a less beneficial benefit even on the table? In fact what we probably need it to raise the benefits for them to make a significant dent in retired peoples' living expenses.

Posted by: bobbo on February 19, 2009 at 1:24 PM | PERMALINK

"I suspect most of the concern trolls who criticize Obama from "the left" are Naderites, or from the Marxist Left."

Jeeze. Thanks for the namecalling, which can be plagiarized from Hannity, Billo, almost any Village columnits, or (I was sorry to see) now Nate Silver of 538.com. Criticize Obamad from the "left" (which I would prefer to label the mainstream Democratic Party of my youth, circa the '60s and '70s) and you will be called all sorts of names. For the record, I despise Ralph Nader, both for his personal sanctimoniousness and his gift to the nation of Boy George. And my personal political heroes heroes are not Marx or Trotsky, or John Reed and Earl Browder, but FDR, Hubert Humphrey, and Lyndon Johnson. If I had to pick a favorite political figure today, and the choices are unfortunately sparse, it would likely be Barney Frank. Yeah, I'm a real Naderite Marxist.

Posted by: Marlowe on February 19, 2009 at 1:55 PM | PERMALINK

Jimmiraybob -- I did turn welfare cheaters into authorities. I didn't mention it because I didn't think I had to. In fact, the two people had been scamming for a couple of years. I asked the welfare administration office how that could have gone on for so long and she stated that there was a lot of corruption in the various echelons of the agency. It was very likely that these people had connections in the agency. This is part of what I am talking about.

zak822- there is not a 5 year limit on welfare in all states. I wish it were so. And in those where there is that limit is quite tenuous such as when additional children are born or if people change their name. Plus add to that the corruption in the agencies themselves.

No I do not want to live off welfare or wish that on anyone. But there is more to that monthly check in assistance such as housing assistance, tuition reimbursement, infant car seats, etc. This starts to add up. Again, I am all for providing welfare to the poor. I am also in favor of moving people off the welfare rolls.

This is a deeply ingrained problem both for the recipients and the administrators.

Posted by: coral on February 19, 2009 at 1:55 PM | PERMALINK

"I just have to laugh at this Obamabot drivel. Every apparent lurch to the right by Obama, every concession to Rethugs and Broderites, every betrayal of Democratic, and democratic, principles is actually a brilliant, many layered ju jitsu move on the right by Barack Obama, secret liberal, master of 11-dimensional chess. Sometimes a duck is just a duck."

Exactly.

And if all the others can do is call us "Marxist Left," well they're no different than Rush.

Posted by: popnfresh on February 19, 2009 at 2:00 PM | PERMALINK
NAH that guy aint a liberal. He is center right!

None of those are really inconsistent with being "center-right".

(The Republican Party is a party of the far right. The Democratic Party is, by and large, and center-right party and Obama is just about in the center of the party.)

Posted by: cmdicely on February 19, 2009 at 2:15 PM | PERMALINK

Trolls! Concern Trolls! And Obamabots! Oh My!
Trolls! Concern Trolls! And Obamabots! Oh My!

Oh we're off to see the Chessmaster, the wonderful Chessmaster of Oz.

Posted by: name goes here on February 19, 2009 at 3:27 PM | PERMALINK

"And yes, if Obama announces his intent to gut Social Security, we will all join you in attacking him. But until then, you're just being counter-productive."

I disagree with this statement by the good doctor. Although I am beginning to feel that the economic summit has a possibility of being a good thing and promoting change in health care rather than destabilizing social security, I also support those who continue to agitate for more left-leaning actions by the Obama administration and guard against conservative motions. Rather than being "counter-productive", this is the way that liberals will actually cause the administration to act on liberal concerns. Liberal skepticism and constructive criticism will actually help the administration.

Posted by: z on February 19, 2009 at 4:28 PM | PERMALINK

the Orszag-Diamond proposal -- which most liberal [sic] embraced as the responsible alternative in 2005

Most who when names please? That is a whole lot of bull byproduct.

Social Security Is Not Broken. It Does Not Need To Be Fixed. Period.

On the brink of the worst economic slump in decades, we should be talking about increasing benefits. No way on Earth should we be thinking of cutting them.

This is directly taking money from the pockets of your parents and grandparents and giving it to Wall Street and the Pentagon.

Stop enabling this pseudo-liberal "reasonable" crap. It's not necessary, it obscures the real sinkholes in the Federal budget, it's just wrong.

Posted by: tatere on February 19, 2009 at 4:36 PM | PERMALINK

"his argument that Social Security requires only modest tax hikes and benefit cuts"

That'd be the halfway mark between the completely irresponsible conservatives who want to get rid of Social Security, on the one hand, and on the other hand the responsible people who know that, far from requiring benefit cuts, what SS really needs is restoration of the full benefits it used to come with.

And that "modest tax hike" had better mean raising the cap rather than increasing the percentage of payroll tax that ordinary Americans who make less than $100,000 are already paying.

Restore and expand Social Security and raise - or better still, eliminate - the cap, and you've got a wise and responsible plan.

Reduce benefits and you're being downright stupid.

Posted by: Avedon on February 19, 2009 at 6:43 PM | PERMALINK
Reduce benefits and you're being downright stupid.

Generally, I agree, though I can see some specific exceptions. E.g., a proposal to do a kind of means test that would defer benefits on a sliding scale when a recipient had above a certain income threshold (but increase downstream benefit eligibility if their income later fell, so they'd only be "losing" money if they maintained a high income until they died) might not be bad, if engineered right, and might save a little money around the edges.

But it would be a low-priority tweak even if it did have some benefit.

Posted by: cmdicely on February 19, 2009 at 7:16 PM | PERMALINK




 

 

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