Social Security fight to split Dems?

posted at 10:12 am on January 17, 2011 by Ed Morrissey

A fight over Social Security reform could wind up splitting the Democratic caucus in the Senate, Vermont’s Bernie Sanders warned yesterday.  Unions have lined up against any change in benefits for Social Security and have begun warning Barack Obama to avoid the entitlement debate in his State of the Union address.  Sanders says he counts Harry Reid among his allies in this fight:

The battle lines are forming within the Democratic Party over the charged question of reforming Social Security in the days leading up to President Obama’s State of the Union address.

Liberals, such as Sen. Bernie Sanders (I-Vt.), and labor unions, such as the AFL-CIO, AFSCME and SEIU, have taken a firm stand against cutting Social Security benefits. …

Sanders told The Hill on Friday that a group of Senate Democrats may support raising the retirement age. But he said there is also a faction of the caucus, led by Senate Majority Leader Harry Reid (D-Nev.), staunchly opposed to benefits cuts.

“I raised my concerns on this payroll tax holiday and it was raised by a number of other Democrats — Harry Reid was very strong on the Social Security issue,” Sanders said.

Sanders claimed that Republicans would fight the end of the FICA “holiday” in 2012 and call it a “tax hike” in the next election cycle.  However, Republicans didn’t push the FICA tax holiday in the first place; that idea came from Democrats.  The tax deal Obama cut with Republicans included the employee-side temporary reduction, which the GOP didn’t oppose but didn’t enthusiastically support, either.  Public statements from Republicans at the time indicated that they weren’t interested in extending it beyond this year.

However, Sanders knows that the GOP have to start reforming entitlement programs to get the budget reductions they promised.  The unions want to stop those from occurring, even though the option without entitlement reform would be widespread reductions in the federal workforce, which leaves them over a barrel politically and economically.  Unfortunately for Sanders, a large number of his colleagues have to stand for re-election themselves, and with 77% of voters demanding reductions in federal spending, the pressure to comply will be more than the unions can rebuff.

A fight over Social Security reform could split Democrats ahead of the next election, and perhaps even split Obama from the Senate as well.  If Obama backed serious Social Security reform in his effort to triangulate, along the lines Bill Clinton did with welfare reform, then it will make any naysayers in the Senate look even more out of touch ahead of their re-election bids next year.  They will fall in line instead — but only if Republicans seize the initiative and make it an issue in 2011 as part of the budget-reform fight.


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“Just more signs of infighting, backstabbing, confusion, and turmoil in the Republican party.”

-NYT

Bishop on January 17, 2011 at 10:14 AM

Unions have lined up against any change in benefits for Social Security and have begun warning Barack Obama to avoid the entitlement debate in his State of the Union address

Since public unions dominate the union world nowadays, and many public workers do not participate in SocSec, correct me if I am wrong on that one, why is SocSec reform such a big thing to unions?

WashJeff on January 17, 2011 at 10:19 AM

Variations on a theme; another community agitator stirring up trouble.

Skandia Recluse on January 17, 2011 at 10:19 AM

The Washington Post is al ready reporting that Obama will not tackle entitlement or spending reform, at least not before 2012.

It would be suicide for him to do so anyway, at least politically speaking from my view point. Al though we NEED entitlement reform or else any attempts at tackling spending are futile, having a President, in an election year, go before the nation and say “we need to cut your benefits,” would be a sure fire way to get tossed out.

Indy82 on January 17, 2011 at 10:20 AM

Yes, I’ve heard Reid say SocSec is solvent for decades, and is not a problem. What a joker.

Paul-Cincy on January 17, 2011 at 10:21 AM

Since public unions dominate the union world nowadays, and many public workers do not participate in SocSec, correct me if I am wrong on that one, why is SocSec reform such a big thing to unions?

WashJeff on January 17, 2011 at 10:19 AM

They do not want to participate in SocSec.

Slowburn on January 17, 2011 at 10:21 AM

“However, Republicans didn’t push the FICA tax holiday in the first place.”

No, but you must admit that it is something of a Republican idea. Senate Republicans have said, on the record, that it wasn’t their idea, but it falls in with their ideology. They would have simply preferred a pay roll tax holiday for employers in addition (or maybe instead of) to employees.

Indy82 on January 17, 2011 at 10:24 AM

When people, in the majority, put SSA reform at the top of the ‘how to cut the budget and save money list’ then they really do expect this to be the top of the agenda for cutting the budget.

Thus the D’s are faced with the ‘there’s nothing to worry about la-la-la-la’ faction and the other faction seeing the brick wall coming up on Barry’s bus as he floors it.

A bit of survival instinct is a wonderful thing.

ajacksonian on January 17, 2011 at 10:24 AM

They do not want to participate in SocSec.

Slowburn on January 17, 2011 at 10:21 AM

They already do not participate in SocSec. Even the IL state workers are not part of SocSec (e.g., teachers). Like Ed said, a bigger SocSec budget means less money for future and current public employees.

WashJeff on January 17, 2011 at 10:25 AM

A fight over Social Security reform could wind up splitting the Democratic caucus

TONE DOWN THAT RHETORIC, COMRADE.

You don’t want to incite violence, do you?

Good Lt on January 17, 2011 at 10:25 AM

It’s always those goofy Republicans! Why don’t they just sit down quietly and behave and stop causing trouble?

CH on January 17, 2011 at 10:26 AM

why is SocSec reform such a big thing to unions?

WashJeff on January 17, 2011 at 10:19 AM

Because if they can successfully reform it (and show that it can be done without committing political suicide), there is NOTHING that we can’t reform. Including public sector unions.

And the public sector union leeches know it.

Good Lt on January 17, 2011 at 10:27 AM

They already do not participate in SocSec. Even the IL state workers are not part of SocSec (e.g., teachers). Like Ed said, a bigger SocSec budget means less money for future and current public employees.

WashJeff on January 17, 2011 at 10:25 AM

And they want to keep it that way.

Slowburn on January 17, 2011 at 10:30 AM

The D’s, by decoupling FICA from SSA with a tax holiday have turned SSA into just another program the government runs, no different than the Dept. of Agriculture, save that the recipients don’t need Monsanto to lobby for them. What started in the Johnson Administration now comes home to roost: there is no coupling between what you pay out and what you expect to receive, and this is just wealth transfer from the young to the old, who should have gained some wisdom for investing for later in life.

No one can run a Ponzi scheme forever, and SSA is starting to come apart not with the paint job but with the frame of the vehicle, itself. And yet our Congresscritters and Presidents can’t get an Enron or Madoff perp-walk…

ajacksonian on January 17, 2011 at 10:32 AM

Anything that Bernie “The Socialist” Sanders is opposed to, I am 110% for!

Let the Democrats beat each other into a pulp over this one, while The Republicans stay on the sidelines with boxes of popcorn in hand and enjoy the show.

pilamaye on January 17, 2011 at 10:35 AM

Don’t shrink the welfare state … LOL

tarpon on January 17, 2011 at 10:35 AM

And the public sector union leeches know it.

Good Lt on January 17, 2011 at 10:27 AM

I can buy that one. Once people see\feel they can live without a government entitlement, they have less need\desire for big government (i.e., less public employees\union members).

WashJeff on January 17, 2011 at 10:37 AM

“However, Republicans didn’t push the FICA tax holiday in the first place.”

No, but you must admit that it is something of a Republican idea. Senate Republicans have said, on the record, that it wasn’t their idea, but it falls in with their ideology. They would have simply preferred a pay roll tax holiday for employers in addition (or maybe instead of) to employees.

Indy82 on January 17, 2011 at 10:24 AM

I don’t recall this being said, nor the idea coming from the Republicans. This is typical Democrat window dressing.

JSGreg3 on January 17, 2011 at 10:40 AM

i dont get it…they get such great pensions, why are the unions worried about ss bennies….

cmsinaz on January 17, 2011 at 10:41 AM

WashJeff on January 17, 2011 at 10:19 AM

sorry, didn’t read your post first…

cmsinaz on January 17, 2011 at 10:42 AM

should have read the thread through

:(

cmsinaz on January 17, 2011 at 10:44 AM

I don’t recall this being said, nor the idea coming from the Republicans. This is typical Democrat window dressing.

JSGreg3 on January 17, 2011 at 10:40 AM

JS-That is not Dem window dressing. Many Republicans have urged for a payroll tax holiday for years. That is a GOOD thing, not a bad thing. Following the tax deal, even Paul Begala and Charles Krauthammer both agreed this is a Republican idea, al though this was not pushed by them to be apart of the tax deal. It’s nothing to be ashamed of. People who are center-right (like me) have long argued for a payroll tax holiday, and we got one with this tax deal. The only thing we didn’t get was a payroll tax holiday for employers, which would have greatly contributed to growth.

Indy82 on January 17, 2011 at 10:51 AM

Can’t wait to start hearing the old line: “I paid my money into it…I deserve to get my money back!” Sigh.

Or even worse the media spin: “The Republicans want to take all of your hard earned money away”

search4truth on January 17, 2011 at 10:53 AM

The unions want to stop those from occurring, even though the option without entitlement reform would be widespread reductions in the federal workforce…

If we could do only one or the other, I’d make widespread cuts in the federal workforce. Shrink the gubmint. Downsize DC.

petefrt on January 17, 2011 at 10:57 AM

The greedy unions are against Social Security reform because they know if the government will cut Social Security outlays, nothing is sacred and they will come next.

States will want bailouts because of huge state deficits mostly caused by those greedy unions. That’s the brewing battle.

slickwillie2001 on January 17, 2011 at 11:05 AM

I am 66 and receive SS. Part of any major change in the system may impact those of us who retired and considered SS as part of our living expenses. When you combine the pension problems for private and public workers, the losses like those I have had in my single private retirement fund, my 401k, the outlook for seniors is not too dang good.

If, as I expect, we will have serious stagflation, we will be hurt even more. Already the Misery Index is moving upward. I don’t know the answer, but someone is going to get hurt and there needs to be a very open discussion to make sure that there are NO special interest groups that are exempt from the shared sacrifice needed.

The state and federal budges must be cut. But where. For example my state has mandates on class sizes what are about 3/4 of those from my classroom days and yet we hear that there is much less class discipline and even less learning. If what I see locally is true across the nation, all this money thrown into education has enriched management, not children. We also have a maintenance of effort state law such that school budgets can not be cut. And a worthless federal dept of education that robs from the rich and gives to the poor; that doesn’t seem to have worked either for the low end school systems. The feds take, say, $1 from me, extract 30 cents for federal management and send the 70 cents somewhere. Who needs this failed system of redistribution to continue. Just saying.

amr on January 17, 2011 at 11:13 AM

Of course. If we know there’s a problem, but we ignore it, it will just go away.

unclesmrgol on January 17, 2011 at 11:34 AM

amr on January 17, 2011 at 11:13 AM

The problem with SS is that the lockbox has already been raided and the population of young worker have been aborted, so to speak, so those who are younger and still earning wages have to ante up more taxes for the Social Security entitlement.

FDR did the ultimate screw-over with this Ponzi Scheme. Rather than it being a pay-in-advance plan, he made it a pay-as-you-go plan, thus giving the first generation of recipients benefits from a program to which they did not contribute. Such a plan would work fine as long as there were many more young workers paying into the system than there were old people taking money out. That’s not the case any more. Expect that the plan will go bankrupt, and that said bankruptcy will occur within the next 10 years. You are the last generation which will benefit from Social Security. Whatever benefits you have — treasure them — for those who follow you will have paid diligently into the system but will get nothing back.

unclesmrgol on January 17, 2011 at 11:40 AM

SS is important, but more important?

Spending.

Get the spending down. Immediately.

Contrary to pundit intelligence sources, people who are interested enough to show up to Teaparty events aren’t wackadoodles.

They don’t expect instant results.

They do expect a real effort toward CURRENT spending.

And that includes the military, entitlement programs such as the new HCR, and even congressional boondoggle trips.

Cut it out, people.

AnninCA on January 17, 2011 at 12:13 PM

And if Obama has to admit that his expansion into Afghanastan was a mistake? (Contrary to Bush, McCain, and even Clinton),

Well, I’m prepared to let him suck that one up.

AnninCA on January 17, 2011 at 12:15 PM

Unions have lined up against any change in benefits for Social Security and have begun warning Barack Obama to avoid the entitlement debate in his State of the Union address

Pretty good evidence that Obama and company are in thrall to the Unions.

jeanie on January 17, 2011 at 1:05 PM

With these ‘I got mine’ groups such as unions out there ranting…makes you want to throw in the towel and just wait for the country to collapse ala CA. Then it will be more ‘equal’ for the proletariat with the fat cats running what’s left of the country and the rest of us just slowly, equally starving to death and dying off. Of course, the down side for the greedy is that eventually they will have to exploit each other.

jeanie on January 17, 2011 at 1:22 PM

Unions have lined up against any change in benefits for Social Security

About 10% of Americans belong to a union and of that 10%, 99% vote Dem. The GOP should fight this with everything it has. Nothing to lose and everything to gain since I doubt the squishy middle has much love for unions either.

angryed on January 17, 2011 at 1:52 PM

unclesmrgol on January 17, 2011 at 11:40 AM

I hate to defend FDR on anything. But with SS there is no way he could have predicted the baby boom. The real fault lies with the boomer generation that knew SS was doomed to fail but did nothing to fix it.

angryed on January 17, 2011 at 1:58 PM

What could be seen during FDR’s time was that life expectency was increasing, with the only noticeable two year downtick due to the Spanish Influenza epidemic post-WWI. That had been a long-standing demographic trend going back at least to the beginning of the century and census statistics would also show this trend going back further. Putting into place any sort of age-based retirement system with a steady state of increasing life expectency then leaves a larger and larger pool of retirees drawing from the active workforce. That alone would increase funding pressures on any retirement system that was not investment based but tax based.

FDR had plenty of fine analysts available in his day and if he wasn’t made aware of this phenomena he needed to have it brought to his attention. The Republicans in Congress pointed that this system was going to go broke at some future time (sans baby boom) as it was a generalized ponzi scheme and unsustainable. Only the large workforce and demographic change of the baby boom made it possible for the system to limp along, and without a baby boom the steady line of life expectency increase without any subsequent changes in the program would doom it to insolvency. Even with such changes the event of insolvency is only being forestalled, not removed, due to the way the program is funded.

No one can make a ponzi scheme work forever: someday you run out of new entrants to the scheme and have too many people expecting payouts. Enron and Madoff got us lovely perp-walks…

I am more than willing to see those in the system getting benefits continue to get them.

If you believe you ‘invested’ in the government, then taking that attitude should mean you are prepared for the day when your ‘account’ runs out of money. That hasn’t happened with those spouting this line of reasoning. Thus, to end the scheme it must be closed to new retirees, those inside the system paid via general revenues, FICA removed as well as large parts of the federal government to pay for these current retirees. At some future time, unless we truly do get to a 1 year of added life expectency for 1 year lived, the system will close down… and if it goes to 1:1 we can expect rejuvenation treatments to be part of that and then the system goes, anyways, as biological age ceases to be meaningless. One way or another the scheme will crash… we can do it gently, now, or wait for much more pain for our children, grandchildren and ourselves for the day of that happening is drawing very near, indeed.

ajacksonian on January 17, 2011 at 3:01 PM

What would be the budgetary implications of canceling unspent stimulus funds? unspent TARP funds?

Angry Dumbo on January 17, 2011 at 5:54 PM

What would be the budgetary implications of canceling unspent stimulus funds? unspent TARP funds?

Angry Dumbo on January 17, 2011 at 5:54 PM

How would the Bamster fund his reelection efforts?

slickwillie2001 on January 17, 2011 at 6:00 PM

The “FICA holiday” was a transparent Democrat move to change the structure of Social Security from a retirement plan with a substantial personal cost component to a welfare program financed by employer taxes and general revenue.

The “FICA holiday” was and is irresponsible. It dooms Social Security to an even earlier failure, and drags business and jobs down with it!!

landlines on January 17, 2011 at 8:08 PM

I hate to defend FDR on anything. But with SS there is no way he could have predicted the baby boom. The real fault lies with the boomer generation that knew SS was doomed to fail but did nothing to fix it.

angryed on January 17, 2011 at 1:58 PM

Not the problem of the Boomer generation as a whole — it’s a problem with the Democrats of the Boomer generation. And it’s not the Baby Boom that’s the problem — that helped out their living ancestors tremendously. The problem is a falling birthrate — we are not replacing ourselves, and hence either the load must increase to near unbearable levels upon our descendants, or they must shed their entitlement obligation.

I think, in the end, they will shed. The fix will be the dismantlement of Social Security.

unclesmrgol on January 22, 2011 at 12:15 AM