Campaign rhetoric muddies Social Security reform

[October 22, 2010]  WASHINGTON (AP) -- For 75 years, seniors have loved their Social Security benefits and for almost that long, politicians have loved to warn them that the other party would take those benefits away. This election year is hardly an exception.

Democrats, grasping for senior support to blunt Republican gains, are running ads around the country saying that Republicans would privatize the system. They've pounced on GOP candidates who have suggested ending Social Security or making it voluntary. Republicans in turn accuse Democrats of distorting the facts and scaremongering.

The overheated rhetoric is hardly encouraging for those who would like to see Congress find ways for the retirement and disability system to survive in the coming decades. Last year, the system paid out $700 billion in benefits to more than 53 million people. But it faces a $5.3 trillion shortfall over the next 75 years as the nation ages and fewer workers support more retirees.

"It serves to poison the well," said Rep. Paul Ryan of Wisconsin, the senior Republican on the House Budget Committee. He's a favorite target of Democrats because of his proposal to give workers under 55 the option of investing part of their Social Security taxes in personal retirement accounts to be run by the Social Security Administration. "The problem for us is these things stick," he said of the attack ads. "If scaring seniors didn't work, they probably wouldn't do it."

President Barack Obama, in an August radio address, said some Republicans are "pushing to make privatizing Social Security a key part of their legislative agenda" and warned seniors of tying "your benefits to the whims of Wall Street traders and the ups and downs of the stock market."

While some Republicans do support privatization, it's not part of the House Republican agenda, and Ryan insists that his plan does not include a privatized investment option.

Obama and Democratic leaders upped the ante last week, telling voters they want a $250 bonus for Social Security beneficiaries who, because of low inflation, will be going two years without a cost-of-living increase. Republicans have tied their support of the idea to paying the bonuses from unused stimulus funds or other government programs rather than adding the $14 billion cost to the federal debt. Democrats balked at that earlier this year.

Social Security has been a source of partisan division since President Franklin Delano Roosevelt pushed it through Congress in 1935 amid Republican prophecies that it would lead to job losses, economic decline and a government takeover of society.

In 1964 Democrats ran an ad showing a pair of hands slowly ripping a Social Security card into pieces to attack GOP presidential nominee Barry Goldwater's advocacy of making the system voluntary.

"Say no to this radical attack on Social Security," President Bill Clinton said in 1994 when Republicans made similar proposals that the system be made voluntary and the retirement age gradually be raised to 70.

President George W. Bush, in his 2005 State of the Union address, said the key to saving Social Security was introducing personal savings accounts coupled with reductions in future benefits promised to younger workers. The idea went nowhere in Congress, with solid Democratic and some Republican opposition.

This year, too, Republicans have supplied Democrats with plenty of ammunition. Democrats have picked up on comments by tea party-backed favorites such as Senate hopefuls Joe Miller of Alaska and Sharron Angle of Nevada that Social Security should be phased out or ended.

House Republican leader John Boehner drew fire for comments to the Pittsburgh Tribune-Review in June that the retirement age should eventually be 70. "I think we need to look at the American people and explain to them that we are broke," he said. Republicans pointed out that House Majority Leader Steny Hoyer has made similar suggestions for putting the Social Security house in order.

Then, Alan Simpson, former Republican senator from Wyoming who co-heads a bipartisan commission appointed by Obama looking into ways to reduce the national debt, had to apologize for referring to Social Security as "a milk cow with 310 million tits."

What the commission and others are trying to deal with is the reality that Social Security will run out of money in 27 years on its current path. It's still in better shape than Medicare, which faces insolvency just seven years from now.

Experts say it wouldn't take much -- modest changes to increase the payroll tax, reduce inflation adjustments or gradually raise the age for full benefits, perhaps a combination of all three -- to right the system. But for the moment, the political will to do any of those things doesn't appear to be there.

Republicans strongly oppose tax increases. And earlier this month, 136 House Democrats sent Obama a letter saying they would stand firmly against debt commission recommendations, slated to be made in December, that "cut or diminish Social Security in any way."

Changes to Social Security "can't be done piecemeal and can't be done at a time when we are giving all these tax breaks to wealthy people and fighting two wars," said Rep. Eliot Engel, D-N.Y.

There is a precedent for compromise. In 1983, President Ronald Reagan, economist Alan Greenspan, who headed a commission on Social Security reform, and House Speaker Tip O'Neill, D-Mass., came together on a plan to prolong the life of the system by accelerating an increase in the payroll tax rate and raising the retirement age over time.

Barbara Kennelly, a Democratic member of the House at the time and now the head of the National Committee to Preserve Social Security and Medicare, recalled that it was a "very civil discourse."

Kennelly has doubts about what the debt commission will come up with, saying its purpose is to cut the deficit, not resolve Social Security problems. A Social Security solution is possible, she said, but "just not right before an election."

[Associated Press; By JIM ABRAMS]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.