As the 2016 campaign approaches, the hot idea in Democratic Party circles is to increase Social Security benefits. Last month, Sen. Elizabeth Warren. D-Mass., staged a vote on a “sustainable expansion” resolution in the Senate, garnering 42 “yeas” and laying down a new orthodoxy from which only two members of her party’s caucus deviated. Meanwhile, in Iowa, potential presidential contender Martin O’Malley, former governor of Maryland, came out in favor of higher benefits, putting pressure on front-runner Hillary Rodham Clinton to follow suit.
Progressives are patting themselves on the back for shifting the terms of a fiscal policy debate that has allegedly been unduly tilted in favor of deficit “hawks.” Indeed, even President Obama has, in the past, favored trims to Social Security — in the form of a slower cost-of-living increase, not actual cuts — if they were part of a comprehensive deal on the long-term deficit. Now that cautious, responsible position is seen as capitulation to the right.
Of course, there’s nothing particularly original about the progressives’ campaign, either politically or policywise. Pandering to the elderly may be especially urgent for Democrats now, given that the formerly reliably blue 65-and-older set has evolved into a Republican constituency in the past decade, according to Gallup. But buying votes with Social Security promises is a hoary ploy whose master practitioner was none other than President Richard Nixon; he helped seal his landslide re-election in 1972 by approving a 20 percent benefit increase on July 1 of that year.
As for policy, proponents of a benefit boost warn of a looming “retirement crisis,” but the arithmetical support for this tends to be highly selective. The poverty rate among the elderly is lower than that of society as a whole and significantly lower than that of children. Social Security is an essential poverty-fighting program and must be protected, especially for lower-income seniors. It’s also true, as advocates suggest, that funds could and probably should be raised by imposing Social Security payroll taxes higher up the income scale. Even the rich, however, have finite resources. More lavish retirement benefits for the middle- and upper-middle-class seem like an odd purpose to choose for the United States’ ostensibly progressive political party.
Compared with Medicare and other medical programs, Social Security is not an especially egregious driver of the long-term debt. It’s hardly irrelevant, though. And a significant component, the Social Security Disability Insurance (SSDI) program, is on course to exhaust its trust fund by late 2016.
The trust funds are a bit of an accounting fiction, to be sure, but their parlous condition does underscore the fact that SSDI has been expanding rapidly in recent years because of program rules changes, the recession and an aging population. Many economists fault the program for discouraging work. Modernizing SSDI should form part of a broader strategy to boost the sagging labor force participation rate. Working on that challenge might not be as helpful to Democrats’ short-term political prospects, but it would be more helpful to the nation in the long run.
FROM AN EDITORIAL IN THE WASHINGTON POST