In a typical presidential campaign, Social Security would have by now reared its head, either though a candidate’s thoughtful presentations of reform proposals or, more often, accusations that the opposing candidate’s plans would doom the program and the millions of retirees who depend upon it. Al Gore promoted the famed “lock box” while George W. Bush discussed his ideas for personal retirement accounts.
In 2012, however, Social Security has been conspicuous by its absence. Yet the issue remains as important as ever. Social Security is today running deficits, and the system’s Trustees project that the trust fund – meaningful or not – will be depleted by around 2034. When this happens, by law benefits whole be cut across the board by around one-fifth. Social Security’s 75-year deficit totals roughly $8.6 trillion, and for each year we delay addressing it the shortfall only grows larger.
So where do President Obama and Gov. Mitt Romney stand on Social Security. At first glance, you’d think their positions were the same – at least if you took President Obama’s word for it. In the first debate with Romney, Obama said, “I suspect that on Social Security, we've got a somewhat similar position.” These were about the last words I’d expected to hear from the President, if only because beating the GOP over Social Security is on page 1 of the Democratic political playbook.
Obama himself has put forward nothing on Social Security since his 2008 campaign, in which he called for a surtax of 2 to 4 percent on earnings over $250,000. As I argued at the time, this plan would fix only around half the Social Security deficit. More recently, Vice President Biden told Virginia voters “I guarantee you, flat guarantee you, there will be no changes in Social Security. I flat guarantee you.” Assuming Biden let the President know of their new position, this doesn’t leave Obama many options beside more tax increases.
Romney, however, has proposed a different approach. Romney’s campaign website puts forward two principles for Social Security reform:
- First, for future generations of seniors, Mitt believes that the retirement age should be slowly increased to account for increases in longevity.
- Second, for future generations of seniors, Mitt believes that benefits should continue to grow but that the growth rate should be lower for those with higher incomes.
Together, these would address most of Social Security’s long-term deficit.
The question is where Obama’s views truly lie. His 2008 proposal has lain dormant for four years and Biden’s statements are almost surely the extemporaneous statements of what Clint Eastwood termed “the grin with a body behind it.” If Obama, whose campaign is surely aware of Romney's positions on Social Security, is willing to adopt a similar approach then there may be hope for a post-election resolution regardless of who wins the election. But with the race so tight, the temptation to fall back on old demagoguery may be difficult to resist.