White House To Remain Mum In Social Security Fight — Until Congress Comes Up With a Plan

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The White House will not prominently inject itself into congressional negotiations on Social Security reform until after key legislators in both the House and Senate unveil their plans to reduce projected long-term deficits, according to administration officials.

That won’t please Republican leaders on Capitol Hill, who have attacked Obama for remaining silent in this debate. And these 64 Senate Republicans and Democrats won’t be too happy either. But it’s part of a broader political and policy strategy the administration is employing to keep Obama’s powder dry while Republicans struggle to reduce deficits without increasing revenues in any meaningful way.

The White House’s reticence has been characterized by some as a symptom of a rift between Obama’s economic and political advisers. Some, like Treasury Secretary Timothy Geithner, do in fact believe that a bipartisan deal on Social Security would result in real economic benefits, while others argue that Obama shouldn’t embrace any plan that substantially cuts benefits at all.But while opinions vary within the administration his advisers are united in the belief that achieving a workable deal with congressional Republicans will be difficult, and that it would be foolish for Obama to speak up now.

At a roundtable meeting earlier this month, a senior Treasury official described the landscape to about a dozen reporters and bloggers. The optimal moment for President Obama to substantively weigh in on Social Security reform proposals, the official said, will come when House Republicans unveil their budget resolution for fiscal year 2012 and a bipartisan working group in the Senate unveils its deficit reduction package, assuming they reach an agreement.

Those two proposals will force Republicans to grapple with the tensions between their broad opposition to increasing federal revenues and their professed goal in these discussions of reducing the deficit. It’s put them in a bit of a box, the official said, and it’s possible they may abandon their efforts, and lay the blame at Obama’s feet, before unveiling anything. But if their efforts are serious, Obama’s economic team sees an opening — to take pressure off the non-defense discretionary portion of the budget, and to send a signal to markets that the U.S. government isn’t so paralyzed that it can’t address larger, looming fiscal challenges.

So what constitutes a serious effort? Basically a recognition that Social Security revenues and general revenues have to rise, if the administration is going to accept anything that cuts benefits, even modestly.

President Obama laid out a comparable framework in his State of the Union address.

“[W]e should also find a bipartisan solution to strengthen Social Security for future generations,” Obama said. “We must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.”

The administration has been purposefully evasive about what constitutes “slashing,” but the senior treasury official made it clear that the White House will only consider plans that harm their progressive interests if revenues are on the table in a significant way. Indeed, as something of an opening bid, Obama’s OMB director Jack Lew has recently, and prominently argued that Social Security is not driving current or medium-term deficits.

At an earlier White House briefing with reporters and bloggers before he left the White House, David Axelrod explained that the nature of the issue will make it difficult for players in Congress to reach agreement, but that the result will have to reflect the balance Obama described.

“I don’t think — there’s not going to be a bipartisan agreement for him to veto,” Axelrod said. “I think if there’s a bipartisan agreement that it’s going to be hammered out around the principles that he articulated last night [in SOTU] or it’s probably not going to move forward.”

Republicans on the Hill are wary. House GOP leaders have promised that their forthcoming budget will include entitlement cuts. Others, like Senate Minority Leader Mitch McConnell insist Obama’s leadership is a predicate for any action. Thus, there’s still some chance that the GOP will back off, and retrain their focus on narrower aspects of the budget. Or — and this would make those Obama political advisers happy — the House GOP will introduce a heavily conservative approach, including partial privatization, and Democrats can unite in opposition to it.

Neither outcome would surprise a key member of Obama’s economic team. In his book, The Pro-Growth Progressive, Gene Sperling, who recently replaced Larry Summers as chief economic policy adviser, wrote, “There is no historical precedent for addressing a major entitlement challenge — whether to Social Security or Medicare — well in advance of a crisis.”

ABOUT THE AUTHOR

Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at brian@talkingpointsmemo.com
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