Obama Throws Down Gauntlet On Social Security In New Budget

AP

President Barack Obama signaled in his fiscal year 2016 budget released Monday that he was ready for the fight over Social Security that congressional Republicans made clear last month they wanted

Obama’s budget included the transfer of tax revenue from the program’s retirement fund to the disability fund, which would otherwise start being unable to pay full benefits in late 2016. House Republicans passed a rule in January that would block the transfer — known as reallocation — unless Social Security’s overall solvency was improved.

The GOP made clear that it wanted to force a debate over the program, and some conservative policy wonks said that they hoped Congress would use the need for reallocation as an opportunity to pursue broader changes to Social Security. Democrats on the Hill have advocated for a ‘clean’ reallocation not predicated on changes to the program. Reallocation has happened 11 times in the past on a bipartisan basis; the most recent reallocation occurred in 1994.

The White House had previously told TPM that it generally opposes proposals like the House rule that limit the ability to reallocate money. Monday’s budget is another sign that the administration will be confrontational if Republicans try to use the pending crisis as leverage to enact changes to Social Security. Both the retirement and disability funds would be solvent until 2033 under the president’s plan.

While Obama’s budget acknowledges that reallocation can coincide with “a longer-term solution to overall Social Security solvency (being) developed with the Congress,” its proposal is a clean reallocation with no strings attached. It also included a warning of sorts for any GOP proposals that would privatize or cut the program.

“Any reforms should strengthen retirement security for the most vulnerable, including low-income seniors, and should maintain robust disability and survivors’ benefits,” the budget documents say. “The Administration will oppose any measures that privatize or weaken the Social Security system and will not accept an approach that slashes benefits for future generations or reduces basic benefits for current beneficiaries.”

Liberals portrayed Obama’s proposal as a clear counterweight to the House move last month. House Budget Chair Tom Price (R-GA) has also indicated that he will propose changes to Social Security in the new Congress.

“I think this is the White House laying down its marker on the fight that’s coming,” Rebecca Vallas, a Social Security expert at the liberal Center for American Progress, told TPM. “The White House is sending a clear signal that the Social Security system is too important to the American people to hold it hostage to congressional politicking.”

UPDATE: 4:10 p.m. ET

Rep. Sam Johnson (R-TX), chair of the House Ways and Means subcommittee and co-sponsor of the House rule, criticized Obama’s proposal in a statement to the Huffington Post.

“With nearly 11 million people counting on the Social Security disability program, kicking the can down the road five years as the President proposes just doesn’t make sense,” he said. “All Americans deserve to hear answers from our President on how he will save the disability program that will go broke before he leaves office.”

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