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Democrats Start To Discuss Entitlement Program Changes

Thu, 12 Dec 2013 12:54:02 CST
By: Charlie Schlenker

Democrats Start To Discuss Entitlement Program Changes For many years, the concept of changing Social Security, or even talking about it, has been called the "third rail" of national politics, especially for Democrats. Touch it at the peril of your office. But, the issue is starting to come up for next year's election cycle, even in Democratic congressional primaries. WGLT's Charlie Schlenker reports...

For a couple years now, the Social Security System has been paying out more in benefits than it took in...in contributions. There's been talk of a need to tweak the system to get more funding since the early 1990s. Now, Republicans say Social Security needs more than a tweak, it needs a major overhaul. Democrats don't like to talk about changes to Social Security. Voters tend not to reward talk of sacrifice.

"Look if you buy into the idea that there is a problem with Social Security, you are already lost. It's a phony crisis."

Some candidates like 13th District Democratic House Candidate David Green of Champaign Urbana think the GOP rhetoric is a veiled attempt to gut the program entirely. Yet the subject is starting to come up as it did at a recent Democratic Congressional Candidates forum held in Bloomington. Still, cautious Democrats, like Ann Callis of Troy ...hedge so much they don't even firmly acknowledge there is a problem.

"Let's see where we're at in a cohesive manner. And then if there are issues if they say definitively this is a looming problem, this is going to happen to your grandchildren then we're going to have to see what's there, and what we remove, and what we don't."

Republicans suggest policy choices such as cutting benefits with a Chained CPI cost of living formula, means testing benefits, creating private investment accounts with part of the witholding, and raising the retirement age. Rob Mellon, an 18th District candidate from Quincy minimizes the scope of the issue saying nothing that major needs to happen.

"With some minor changes we could extend the social security system for 75 or a hundred years. They did it before. They could do it again."

Congress DID do it before, in 1983 when President Ronald Reagan and House Speaker Tip O'Neil struck a bargain to tax 90% of all income in the U.S. for Social Security. The value of that bargain hasn't kept pace with the times. Only 85% of total income is now subject to Social Security withholding. Middle incomes have stayed flat. Growth has happened in upper income brackets and the amount of income taxed per person is capped, this year at about $113,000. Some Democrats want to change that. George Gollin is a U of I Physics Professor running in the 13th District as a Progressive.

"Why should someone with a pretty good job earning $119,000 a year pay the same amount into Social Security as someone with a stupendously well paying job who is making five million dollars a year. That is not just. That is not fair."

The rationale for the cap is that the government won't pay benefits on amounts over the cap. But, the cap hasn't kept up with inflation. David Green says talking about changing the Social Security system is addressing the wrong thing, Better topics he says are rich people not paying enough taxes and too much money being spent on war.

"There is no reason to have a deficit if people were paying enough taxes and if we had a decent healthcare system like everybody else in the developed world."

Green is on the left of the Democratic Party. More centrist Democrats like Anne Callis are still uncomfortable embracing even the least of changes.

(Would you support lifting the cap?) "I wouldn't say right now that I would support lifting the cap. I'd say let's see where the numbers are because I do not like to talk about something unless I see where the numbers are. Let's see where the numbers are. Let's see where we are in a definitive graph and then we'll talk about that." (Would you support adding a year to the working life of people if necessary.) "No, I would be against that."

Technically, the Social Security system has 2.8 trillion dollars which should last about twenty years. But, even that cushion is problematic for Darrell Miller of Danvers, a former Republican who is running in the 18th District Democratic Primary.

"The surplus gets lent to the government in T-bills. Now, yes on the books that is in the Social Security Trust Fund. But to redeem it, we have to go to China and borrow it. And that's why there is a problem."

And if nothing is done, Miller says the changing demographics of an aging nation means fewer future workers will support an increasing number of retired workers.

"Me in my 60s, I'm gonna come out with about $320,000 to the good from what I put in in a lifetime of work Social Security and the benefits I get. My granddaughter that was born last year, she's gonna be to the bad 420,000. It's a bad deal for young people."

Bill Houlihan says "We've gotta talk about the issue of age."

Houlihan is the downstate Chief of Staff for U.S. Senator Dick Durbin. At the candidates' forum, Houlihan is defending his boss's statement that the age of retirement is something that might be negotiable.

"People are living much longer and getting Social Security benefits. Also on the table he said maybe we gotta add a year. You know people are going to have to work another year. People don't want to hear that."

A displeased crowd of Democrats murmurs at that remark. And 13th District Candidate Bill Byrnes of Bloomington rejects the need to negotiate over entitlement reform.

"I get tired of hearing that word entitlement, don't you? It's earned benefit, earned benefit, not entitlement."

But, Houlihan says Senator Durbin sticks to the practical idea that even in an era of almost complete partisan deadlock, you have to have some basis to pass a measure.

"In the Senate you gotta get 60 votes on any issue today. So, there's only 54 Democrats. So you gotta figure out yes Senator Durbin says everything should be on the table. That doesn't mean he agrees with everything that's on the table."

Paradoxically the important history of Social Security as a New Deal Program makes it both harder for Democrats to think about changing the legacy and more necessary for them to preserve it in the end. George Gollin recalls what times were like before the social insurance program began.

"Unless you were very lucky and had saved. When you retired when you were too old to work, you tumbled into poverty and your life came rapidly to an end. Social Security has really fixed that as an issue."

Increased taxes on the wealthy are anathema to most Republicans. But, for the primary, this is the ground most Democrats hold. It makes partisan differences on other huge issues such as Medicare funding look even more formidable.

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