In some of the more detailed comments on Social Security of his entire Presidency, President Obama insisted that Social Security does not have a funding crisis, but that bringing it into long-term actuarial balance would require some “modest adjustments.” He didn’t specify as to the nature of those adjustments.
The president acknowledged at a small town hall gathering in Columbus, Ohio, Wednesday that the pension fund “has to be tweaked because the population is getting older” but said Republicans’ plans to drastically overhaul the program are wrong.
“Social Security is not in crisis,” Obama said. “We’re going to have to make some modest adjustments in order to strengthen it.” […]
“There are some fairly modest changes that could be made without resorting to any newfangled schemes that would continue Social Security for another 75 years, where everybody would get the benefits they deserve,” he said.
“I have been adamant that Social Security should not be privatized, and it will not be privatized as long as I am president,” he added.
Obama also said his bipartisan fiscal commission could come up with proposals to extend the life of the program.
“I am absolutely convinced it can be done,” he said.
I’m glad somebody asked the question. Because this shows that the President is falling for the familiar trap that Social Security faces problems due to an “aging population.” That just misreads life expectancy statistics. Most of the changes in life expectancy can be attributed to reductions in infant mortality and deaths at a young age. Life expectancy for those who have reached the age of 65 is basically the same. So it’s just not the case that massively more people are collecting Social Security than before. And that certainly shouldn’t precipitate any calls for raising the retirement age to 70.
As I said, Obama did not reveal in any way the nature of the “modest adjustments” that would need to be made. He did not, for example, back the enormously popular policy of lifting the payroll tax cap that doesn’t even capture as much of a percentage of compensation as it was historically intended to capture.
Yes, it’s a better position than, to pick at random, Sharron Angle, who has been on a crusade to get the government to stop funding entitlement programs for two decades. But that doesn’t quite make it the preferable policy. We know now that President Obama will not privatize Social Security, will not overhaul it, but would look at unspecified “modest adjustments,” including what may come out of his fiscal commission, whose members have a proclivity toward benefit cuts and privatization.
Is that good enough?
UPDATE: More smart takes from Marshall Auerback.