Debt Ceiling Talks Touch 'Third Rail': Social Security

Friday, July 08, 2011

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, Carrie Budoff Brown, Staff Writer for Politico, discussed the potential role of Medicare and Social Security cuts in the debt ceiling negotiations.

Social Security savings

As Republicans and Democrats continue debate over the debt ceiling, budget items frequently referred to as political "third rails" could get fingerprints all over them.

Cuts to entitlement programs are dramatically unpopular, which usually keeps politicians from proposing changes to Social Security and Medicare. But what was once unthinkable for liberal voters and Democratic lawmakers is now a potential reality: Social Security benefit cuts are on the table as part of a deficit reduction deal, even as Republicans refuse to consider higher taxes for wealthy Americans. Carrie Budoff Brown said that there's only one way the Left would accept the austerity.

The question is, does the money that's generated from [benefit cuts]—$300 billion over ten years—will it go back into shoring up Social Security, which is what the president has always said he wanted to do if he dealt with Social Security in the context of a broader deficit reduction deal, or does it go to bringing down the debt?...That will say something about whether the president is shifting his priorities and strategy or stance.

If it goes to bringing down the debt, what will it say about the president's position?

There could be savings or revenues raised by cutting Social Security benefits, but if on the other side you don't see tax cuts eliminated for the wealthy, it'll be viewed as cutting benefits for Social Security recipients to maintain tax cuts for the wealthy.

One 'third rail' at a time

What's being considered is a change to the cost of living calculator that's used to determine Social Security benefit payments over the course of a beneficiary's retirement. The proposed calculator adjustment translates into something around a 3 percent overall cut in benefits that one receives over several decades.

Brown said that such a measure was considered not too long ago during another ferocious, partisan policy debate.

Changing the calculator was brought up frequently during health care negotiations, for example, and it goes back to just the fact that it can be interpreted as a benefit cut for Social Security beneficiaries. That's a really tough thing to sell to people, a hard thing to do politically.

Ironically, that tough sell on Social Security is insulating Medicare from similar cuts, according to Brown. Touching one "third rail" is a tall enough order for politicians as is.

Given that there's so much else being discussed, there's not as much of a focus right now on Medicare. But there are potentially hundreds of billions of dollars in savings they could be looking at.

Each side's bottom line

Restructuring entitlement benefits was supposed to be the last straw for Democrats: something they'd never support, never vote for, and never expect their leader to bargain with during a debt ceiling negotiation. And yet, here we are.

So where is the bottom line for Democrats? Where is it for Republicans? At what point do they throw up their hands and say 'no'? When do they concede, and where? Brown laid out familiar battle lines.

For Republicans, it's how you get the $1 trillion in new tax revenue potentially to get a $4 trillion deal...When it gets to scaling back tax cuts for wealthier families, letting the Bush tax cuts expire...Quite frankly, the numbers are not there in the House.

For Democrats, it's going to be using Social Security to pay down the debt. That's not going to happen. They want to keep Social Security walled off and I think they're going to have to see some kind of job creation effort, especially after today's job report—the idea of a payroll tax or more unemployment insurance.


Carrie Budoff Brown


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Comments [26]

Pat from New Jersey

How did we let the conversation on deficit reduction even include Social Security? Social Security and Medicare have their own dedicated taxes. The last I heard they were not contributing to the deficit at all, in fact their "surplus" has been wrongly udes to mask the siz of the real deficit. They each have their own long term funding issues, but they should be dealt with separately. Nothing you do to them afffects the Budget deficit, which is the current problem and the source off our horrendous debt.

Jul. 08 2011 06:04 PM

To all the conservatives (like the first caller) who say we have to cut SS and Medicare for the sake of our children--- Don't we all hope our children are around long enough to BENEFIT from SS and Medicare themselves??? And hope that those programs are strong for them in their old age?

Jul. 08 2011 01:25 PM
Latish from Brooklyn

Xtina you are talking about now, not a few years from now. Also don't count children or even 100% of working age people because not everyone can or does work. It's not called a baby boom for nothing. Even the echo boom is not as large. Sorry to disappoint you. Also you need to take SS in context with medicare and repayment of the debt to get a good picture of what we will face as a people.

Jul. 08 2011 11:33 AM

"By the way, those selfish greedy BOOMERS, who have been causing trouble for this nation since birth, who never prepared for their retirement, who continue to run this nation into the ground want the rest of us to care for them in their old age and the same time younger people are told sorry, survival of the fittest, you are on your own now."

As a non-boomer who has often been critical of that generation, may I say that what you wrote is beyond offensive? If you replaced "black" with boomer, or "female" with boomer, it might strike you how hateful your statement was.

Jul. 08 2011 11:12 AM
Guest from NYC

Overpopulation is the problem. Long term approach needs to involve some form of population control as it is related to income. The richer the person the less the children. This week I heard on bbc news that there is famine in Africa. Although I feel the empathy for sure, I ask myself, how is it that some of this families have over 5 children? How is this possible? Over here in America we also have poorer families with more children that they can afford. Overpopulation and population control? It is better to be on top of this, than to let wars decide this for us. Thank you!

Jul. 08 2011 10:55 AM
Xtina from E. Village

Also, Latisha from Brooklyn - please get your facts straight. The number of workers exceeds the number of retirees. Always has and always will. Except for maybe if you are in Japan.

Jul. 08 2011 10:52 AM
Xtina from E. Village

Latisha from Brooklyn - the mathematics is called compound interest.

Ronald Reagan solved the problem of increasing number of beneficiaries living longer by raising Social Security taxes. Now that money is gone because the piggy bank has been raided.

Jul. 08 2011 10:50 AM

Ms. Floyd

As part of the journalism establishment and, specifically, covering this topic today, I lay a lot of the blame for the problems of the lower, working and middle classes at your doorstep.

You claim that you read up on the issue.

You treat political reality as THE reality.

You spend almost a half hour talking at the third rail and the raising of the debt limit and do not mention a word about what the people who elected these officials who are making a mockery of the social safety net.

You treat spinning and facts as "two different points of view, rather than what they actually are.

People are going to suffer and die as a result of the gutting of the social safety net.

And YOU will have contributed, however far removed you imagine yourself to be or however you justify the dissemination of talking points that help the rich and powerful at the expense of those who are having a tough time even surviving.

A journalist is supposed to tell people what they need to know to make informed decisions.

In my mind, you fail as a journalist.

Jul. 08 2011 10:41 AM
Latisha from Brooklyn

kim, you may have paid into the system, but you will (if you live a normal modern lifespan) pull multiple times what you paid in, out of the system. Now please enlighten me on what mathematics allows one to have a smaller number of workers pay for a larger number of retirees? If you just outright seized all the money of the rich, it still couldn't pay fr the trillions required. I hope they can fix this problem because I would rather see people get smaller payments than have the social destruction caused by the system simply breaking down.

Jul. 08 2011 10:40 AM
gary from queens

For the benefit of the ignorant liberals:

1. GW Bush and his big government republican friends on Capital Hill were not conservatives. Real Conservative pundits like Deroy Murdoch (a black man, my liberal friends) castigated Bush's spending.

2. there is a quantitative difference between Bush's average 150 Billion annual deficit, and Obama's 1.6 trillion annual deficit. DUHHHH!

3. SENATOR Obama voted against raising the debt ceiling when the deficits were far less.

Jul. 08 2011 10:39 AM
moo from manhattan

change the rules so companies can't be sued by their boardmembers if they don't do whatever makes the most most money (ex - sending jobs overseas) and start a public campaign to employers that puts value on their role in SOCIETY not just as money machines. connect the dots between the choices employers make and how this affects our nation.

Jul. 08 2011 10:37 AM
kim oliver from new york

SOCIAL SECURITY AND MEDICARE, MEDICAID aren't entitlement programs. We have paid for these programs all our working lives. Stop repeating the republican line that these are entitlement programs. Nothing is given to us for free (at least not in this country)!

Jul. 08 2011 10:32 AM
gary from queens


In his bizarre press conference on Wednesday, Obama made no fewer than six references to corporate-jet owners. Just for the record, the tax break for corporate jets was part of the “American Recovery and Reinvestment Act of 2009” — i.e., the stimulus. The Obama stimulus. The Obama-Pelosi-Reid stimulus. The Obama-Pelosi-Reid-Democratic-party stimulus that every single Republican House member and all but three Republican senators voted against. The Obama–Corporate Jet stimulus that some guy called Obama ostentatiously signed into law in Denver after jetting in to host an “economic forum.”

Charles Krauthammer did the math. If you eliminate the Obama-Pelosi-Reid Corporate Jet Tax Break, you would save so much dough that, after 5,000 years, you would have clawed back enough money to cover one year of Obama’s debt. Five thousand years is the year 7011.

Mark Steyn
July 2, 2011 7:00 A.M.
Obama’s Declaration of Dependence
The self-reliant citizenry is history.

Jul. 08 2011 10:31 AM
Latisha from Brooklyn

even as a social liberal, i don't understand how people can continue to say SS doesn't add to the debt. There really is one pie, there is no such thing as a lock-box. Its the same taxpayer paying into both. As the population of retirees eclipses the working population there is no way to sustain the payments, period. add in the fact that the same younger generation will need to pay the debt services (compounding interest) piled up by the same generation under both parties and you need to be on a different planet to not understand the collapse awaiting us.

Jul. 08 2011 10:31 AM
NJEve from NJ

To the conservative caller just on the air, I say: The time to worry about our children and grandchildrens' future and the future of this country, was before you voted for George Bush twice!

It is because of so-called Neocons, Republicans, and conservatives that we're in this mess to begin with! Will our not-at-all conservative 'friends' please keep this in mind?

Jul. 08 2011 10:28 AM
gary from queens

The ignorance of listener's of this show is appalling. one of them actually thinks it is solely republicans who are in the pocket of the ethanol lobby?!

The EPA’s Ethanol Boondoggle
July 7, 2011 4:00 A.M.
By James Sensenbrenner

Congress may have finally recognized the absurdity of subsidizing the ethanol industry, but, unfortunately for America, the Environmental Protection Agency (EPA) has its own agenda.

In January, the EPA issued a waiver that allowed E15 (gasoline with a 15 percent ethanol blend) to be sold for vehicles with model years 2001 and later. This decision was made at the behest of the ethanol industry, but it will come at the expense of American drivers.

While the EPA deemed E15 environmentally safe for models produced after 2001, this higher blend of gas could seriously damage cars. Don’t take my word for it, just ask those who built them.


Jul. 08 2011 10:28 AM
pjbeee from NYC/Northern NJ

It's appalling, even obscene, that according to some economists, the bottom 40% of the population own less than one-third of one percent of the total national wealth (!).

Wealth is not trickling down; indeed, poverty is rapidly trickling UP and into the middle classes. This has been happening for quite awhile now.

I fear that this is an unstoppable train-wreck in progress, unless the President and progressive voices in Congress and the American public wake up to this sad reality.

Jul. 08 2011 10:28 AM
Rick from Connecticut Coast

So after 31 years of phony tax cuts that were mostly borrowed from foreigners, with the wealthy paying rates lower than their receptionists, the Republicans will burn down the house if we don't balance the budget on Social Security and Medicare? We are now a 2 party country: Radical Republicans and Regular Republicans (formaerly called democrats)

Jul. 08 2011 10:27 AM

The caller from Staten Island who identified himself as conservative is just DEAD WRONG on the facts. Absolutely wrong.

Social Security would be perfectly sound with _very_ modest changes now. Raise the cap on FICA to something like $200,000 -- or eliminate the cap altogether -- and the problem is solved.

Increase taxes on those making over $500,000 per year to something in the 45% to 50% range and the problem is solved.

Cut the monstrously bloated military budget and the problem is solved.

The Social Security trust fund is solvent for over 20 more years. If anything we should be _increasing_ the number of people covered by Medicare, given that the so-called 'reform' of health care will do little.

99% of conservative rhetoric on Social Security and Medicare is just wrong on the facts -- and Republicans _know_ this. They want to destroy Social Security and Medicare -- solvent or not. They oppose social safety programs across the board and in principle.

The sad fact is that Obama does not differ much from Boehner & Co.

Jul. 08 2011 10:24 AM

Your framing of this segment is pathetic & wrong.

1) Social Security has no effect on the debt.

2) Social Security benefits have been frozen for 3 years even though Part D premiums, copays have increased.

3)Social Security can be fixed by simply eliminating the salary & wage cap & including all compensation including unearned income.

You should be examining whether the DC/GOP talking points are valid or just echo chamber BS trumpeted by DC-centric media [ like Politico].

Jul. 08 2011 10:24 AM
Angela from Brooklyn

Social Security is not an entitlement program - it's a government run insurance program. We pay into this program with every paycheck - it is not welfare.

Jul. 08 2011 10:21 AM

What shift?!

From day 1, Obama surrounded himself with Clinton-era neo-liberal economists who supported and support privatization of Social Security and Medicare. Obama has repeatedly, consistently excluded genuine liberals and labor voices (not just on SocialSecuroty).

We have _every_ reason to believe that Obama has always taken an essentially conservative line on the American social safety net. He is solidly aligned with increasingly conservative Democratic positions on American fiscal policy.

Jul. 08 2011 10:20 AM
Xtina from E, Village

Don't you just love the framing Jamie has adopted - benefit cuts for revenue increases?

How about acknowleding that Social Security doesn't contribute to the deficit? How about acknowledging what really caused the staggering deficit - the Bush tax cuts and the unfunded wars?

How about solving the problem by approaching the issues that caused the problems. Who ever heard of lowering taxes during wartime? Now they want to raid Social Security and Medicare to pay for it.

Jul. 08 2011 10:19 AM
Susan from nyc

I am appalled that Obama and the so-called progressives are rolling over once again. The current two-party (actually, one party) system breeds distrust and contempt, as our purported representatives ignore their constituents in favor of their corporate paymasters, obscuring their bought-and-paid-for favors with endless, incomprehensible layers of taxes and deductions. If the Democrats and Republicans can't (or won't) act in our interest, we will vote for a third party, one with a moral compass.

Jul. 08 2011 10:19 AM
Judith from Brooklyn

Unfortunately we have seen Obama go down this road before-giving up what he vowed to defend and getting nothing in return. I don't know why he continues to be hoodwinked by Republicans. Any cuts to entitlement programs will go to further tax cuts for corporations and the wealthy. My only hope at this time is that gridlock will prevent Obama for doing much more harm and that Democrats will step up and challenge him in the primaries giving us Democrats someone to vote for. Otherwise I fear dispirited Democrats will sit out the next election in great numbers.

Jul. 08 2011 10:18 AM

By the way, those selfish greedy BOOMERS, who have been causing trouble for this nation since birth, who never prepared for their retirement, who continue to run this nation into the ground want the rest of us to care for them in their old age and the same time younger people are told sorry, survival of the fittest, you are on your own now.
good luck all.

Jul. 08 2011 09:55 AM

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