OMB CHIEF: ‘SOCIAL SECURITY ISN’T THE PROBLEM’…. For all the talk about “entitlements” and the need to “reform” the various programs in the context of long-term fiscal challenges, the White House seems acutely aware of the fact that not all entitlements are created equal. Given that much of the political establishment has forgotten this, I’m glad the Obama team gets it.
Jacob Lew, director of the Office of Management and Budget, has a worthwhile piece in USA Today, for example, separating Social Security from the larger budget mess. Indeed, Lew, after noting the importance of understanding “the causes of the pressing fiscal problems,” reminds readers that Social Security “does not cause our deficits.”
Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries. […]
Blaming Social Security for our fiscal woes is like blaming you for not saving enough in your checking account because the bank lost all depositors’ money.
The problem is not Social Security; the problem is the mismatch between outlays and revenues in the rest of the budget. Closing that gap and paying down our debt will take tough choices, and the president’s budget makes them. Strengthening Social Security is an important, but parallel, issue that needs to be addressed as quickly as possible. But let’s not confuse it as either the cause of or a solution to our short-term fiscal problems.
I have no idea if arguments like these are connecting, but I’m glad officials are making them. Last week, at a White House press conference, the AP’s Ben Feller noted in his question “the the long-term crushing costs of Social Security, Medicare, Medicaid — the real drivers of long-term debt.” President Obama took the time to emphasize the distinctions between them: “The truth is Social Security is not the huge contributor to the deficit that the other two entitlements are… Medicare and Medicaid are huge problems because health care costs are rising even as the population is getting older.”
I suspect we’re seeing this push because the White House realizes congressional Republicans want to cut Social Security, and the administration is laying the groundwork for the larger argument: Social Security just isn’t in the same category as Medicare and Medicaid, so it’s a mistake to treat them all as equivalent “entitlements.”
Social Security is in pretty good shape. Its long-term finances could be improved even more with some minor tweaks that most folks probably wouldn’t even notice, but there’s no crisis, the system isn’t going bankrupt, and if policymakers decided not to do anything for a while, that’d be fine, too. The more the White House reminds folks about this, the better.