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Why even President Obama won’t champion social security
Sound familiar? Very interesting article on Guardian website by Dean Baker, co-director of the Centre for Economic and Policy Research, looking at why President Obama won’t champion social security. Here’s a few selected sections.
President Obama has consistently refused to rise to the defense of social security. In fact, in the first debate, he explicitly took the issue off the table, telling the American people that there is not much difference between his position on social security and Romney’s.
On its face, this is difficult to understand. In addition to being good politics, there are also solid policy grounds for defending social security. The social security system is perhaps the greatest success story of any program in US history. By providing a core retirement income, it has lifted tens of millions of retirees and their families out of poverty. It also provides disability insurance to almost the entire workforce. The amount of fraud in the system is minimal, and the administrative costs are less than one 20th as large as the costs of private-sector insurers.
But there is another set of economic considerations affecting the politics of social security. These considerations involve the economics of the political campaigns and the candidates running for office. The story here is a simple one: while social security may enjoy overwhelming support across the political spectrum, it does not poll nearly as well among the wealthy people – who finance political campaigns and own major news outlets. The predominant philosophy among this group is that a dollar in a workers’ pocket is a dollar that could be in a rich person’s pocket – and these people see social security putting lots of dollars in the pockets of people who are not rich.
Cutting back benefits could mean delays in repaying the government bonds held by the Trust Fund. The money to repay these bonds would come primarily from a relatively progressive income tax revenue. The wealthy certainly don’t want to see changes like raising the cap on wages that are subject to the social security tax, which is currently just over $110,000.
For this reason, a candidate who comes out for protecting social security can expect to see a hit to their campaign contributions. They also can anticipate being beaten up in both the opinion and news sections of major media outlets. While, in principle, these are supposed to be kept strictly separate, the owners and/or top management of most news outlets feel no qualms about removing this separation when it comes to social security – and using news space to attack those who defend social security.
For the whole article, see Why even President Obama won’t champion social security