By Alexander Bolton - 02/25/11 01:20 AM EST
Senate Democrats want to put the Social Security trust fund in a lockbox and insulate it from a broader budget-cutting package designed to reduce the national deficit.
It’s a revival of the concept that former Vice President Al Gore (D) made famous when he sparred with George W. Bush over a proposal to invest a portion of Social Security funds in the private market.
During his State of the Union address, President Obama called on Congress to “find a bipartisan solution to strengthen Social Security for future generations.”
But labor unions and liberal groups have waged a blistering campaign to steer budget cutters away from Social Security, a widely popular safety-net program.
Leading Senate Democrats say Social Security reform should not be part of a deficit reduction package under negotiation.
Senate Budget Committee Chairman Kent Conrad (D-N.D.), who is at the center of bipartisan talks, said he wants to prolong the solvency of Social Security to 75 years. Under its current setup, the program is projected to pay 100 percent of benefits for the next 26 years.
But Conrad does not want Social Security to be part of a broader proposal to reduce the $1.6 trillion federal deficit.
“It might be useful to have Social Security treated on a separate track because it is not part of the deficit reduction package,” Conrad told The Hill before the Presidents Day recess. “I think it should be separated.
“There are many who recognize we have a long-term challenge with Social Security, but that’s very separate from the deficit reduction,” Conrad said. “When those two get put together, it creates huge problems to getting the deficit reduction done, because it confuses the issue.”
Conrad says lawmakers should look instead to reducing projected costs in other entitlement programs, such as Medicare and Medicaid. He notes that one of every six dollars in the economy is spent on healthcare and argues that further reform and savings must be found in the healthcare accounts.
Conrad’s stance should please House Democrats who warned the Senate last week to keep Social Security out of a plan to reduce the general government budget deficit.
“Divorce this conversation about deficit reduction from Social Security and making it a better program!” Rep. Xavier Becerra (D-Calif.) told a meeting of Social Security advocates on Capitol Hill last week.
But it’s an area of potential disagreement with Tom Coburn (R-Okla.), who is meeting regularly with Conrad and Sens. Dick Durbin (D-Ill.) and Mike Crapo (R-Idaho) to put together a deficit reduction plan.
Coburn warns that if Social Security reform is not part of the package, Congress won’t address it for years.
“Nothing will ever happen if we do it that way,” Coburn said of the prospect of separating Social Security from a deficit reduction package.
Liberal Democrats were concerned over Conrad’s role in deficit reduction talks because, as a member of Obama’s fiscal commission, he voted for a plan to raise the Social Security retirement age and lower cost-of-living adjustments.
They are reassured that Conrad has said Social Security reform should be kept apart from a broad deficit-reduction package.
“I appreciate what Sen. Conrad said,” said Sen. Bernie Sanders (I-Vt.), founder of the Senate Social Security Caucus. “I can tell you that I think there is growing sentiment within the Democratic caucus to make sure that Social Security is not dealt with within the context of deficit reduction.”
Sanders said once Social Security is separated from deficit reduction talks, lawmakers could debate ways to extend its solvency. He favors raising the cap on income subject to payroll taxes, which is now $106,800.
Other Senate Democrats have called for Social Security reform to be handled separately from a comprehensive deficit reduction package.
“Social Security isn’t contributing to the deficit now,” said Sen. Chris Coons (D-Del.). “We need to be working to ensure the long-term survivability of Social Security, but we’ve got a lot of other big budget challenges in the short term.
“What I think is important is for the broad public to realize that any changes to Social Security are going to stand on their own to ensure that Social Security is viable,” he said. “It’s not part of fixing the deficit.”
Sen. Carl Levin (D-Mich.) said Social Security reform should be handled separately “because it doesn’t affect the deficit.”
Senate Majority Leader Harry Reid (D-Nev.) has also argued against linking Social Security reform to deficit reduction.
Jim Kessler, vice president of policy at Third Way, a centrist Democratic think tank, said lawmakers can separate Social Security from the deficit reduction package but they must reform the entitlement program sometime during the 112th Congress.
He argues that Democrats should agree to reforms to extend solvency while they control the White House and Senate.
“When is going to be a better environment to do something on Social Security?” he said. “The whole political formulation of Congress and the White House could change, and then you’re really in bad shape. I’d like to see them do something this Congress.”