Top Newspapers Play Into Social Security Scaremongering
An article in the New York Times last week announced, “Obama Promises Bid to Overhaul Retiree Spending.” The Washington Post responded this week with “Obama Pledges Entitlement Reform,” also splashed across the front page.This is reading a lot into Obama’s vague answers to reporters’ questions about entitlement programs, first at a press conference to introduce his new Chief Performance Officer, Nancy Killefer, and later in a conversation with the Post editorial board.
At the press conference, Obama didn’t mention these programs in his prepared remarks about making government more efficient. Even when a Wall Street Journal reporter asked a loaded question about Medicare and Social Security (“Budget experts, as you know, agree that the real key to controlling federal spending lies with the entitlement programs…”) Obama offered boilerplate language about the federal deficit writ large, calling these programs “a central part” of these discussions as an afterthought (listen to the full transcript here). Buried in the Post article, which should really have been titled “Obama Pays Courtesy Visit to Post Poobahs,” the Post acknowledged that “Obama was careful not to outline specific fixes for Social Security and Medicare, refusing to endorse either a new blue-ribbon commission or the concept of submitting an overhaul plan to Congress that would be subject only to an up-or-down vote…”
The Wall Street Journal to the contrary, Obama and his team of experts, including his choice for budget director, Peter Orszag, know that the biggest contributor to long-term deficits is rising health care costs (see, for example, Orszag’s speech at Stanford University). As Obama put it to the Post, “We can’t solve Medicare in isolation from the broader problems of the health-care system.”This is a challenge Obama has already said he will take on. As he and his aides recognize, the problem is not retirees – it is out-of-control health care costs.
As for Social Security, the Congressional Budget Office under the direction of Peter Orszag, Obama’s choice for budget director, estimated that Social Security expenditures would rise with the boomer retirement, but that most of this increase would be covered by the trust fund – which was built up for this purpose. As a result, CBO projected the program’s long-term deficit to be a very manageable 0.38% of GDP. As the Center on Budget and Policy Priorities has pointed out, this is much less than the cost of extending the Bush tax cuts to the top 1% of taxpayers. Tax cuts for the rich, not retirees, are the real threat to our nation’s fiscal health.With older Americans facing plummeting 401(k) balances, Social Security benefit cuts in the form of scheduled increases in the normal retirement age, and rising out-of-pocket medical costs, the focus should be on whether we’re devoting sufficient resources to retirees, not whether we should be slashing their benefits. **