As the presidential campaign winds down I’m starting to see political commercials put out by VP Biden addressing Social Security. That’s a topic that Democrats have long used against Republicans. They have portrayed Republican willingness to address Social Security’s growing crisis as a desire to take Social Security benefits away from needy seniors. They’ve been successful in their efforts for more than a decade now, in large part because the media has failed to cover the crisis in a meaningful way.
However, in this year’s case, it is especially upsetting to see Vice President Biden using the issue of Social Security against President Trump and the media not pointing out the hypocrisy.
In his commercial Vice President Biden criticizes President Trump for proposing a Social Security payroll tax holiday. The payroll tax holiday would stop a portion of the Social Security payroll tax withholding from taking place in order to leave more money in the individuals’ net pay. This would be done to help spur on the economic recovery. I don’t disagree with VP Biden’s position that this would be a bad idea, but hearing it from VP Biden is surprising. When faced with a slow recovery the Obama/Biden Administration used a Social Security payroll tax holiday to attempt to spur on the economy. It was passed by Congress in 2011 and extended for an additional year in 2012. An article in The Hill on the extension of the tax holiday included the following quotes from President Obama:
“It’s amazing what Congress can accomplish when they focus on doing the right thing instead of playing politics.”
“Today, we took one important short-term step to strengthen the economy.“
So it was an “important short term step to strengthen the economy” when the Obama/Biden Administration instituted a Social Security payroll tax holiday, but now it’s threat to the Social Security program when the Trump Administration wants to use it to “strengthen the economy”? Consistency of position was never the hallmark of Vice President Biden or many politicians.
But what makes it even more upsetting to me to see VP Biden use Social Security against a Republican Administration is the record of the Democrats on “saving Social Security”.
In their 2005 Trustee Trust Fund Report to Congress the trustees urged Congress to act in a “timely way” in passing changes to the program that would improve its financial position. President Bush took the trustee’s urging to heart and proposed a restructuring of Social Security that would not only improve its financial position, but would give individuals more control over their benefits. The changes were designed to not only bring about long term stability to the program, but also to make Social Security a wealth building program for working Americans. This would have been the first modernization of Social Security since it was passed in 1935.
Democrats’ response to the proposal was loud and strong. Republicans want to sabotage Social Security. They used it in the 2006 election to win back the House. and they have used it every two years since.
But each year, the Social Security Trustees have issued a statement in the conclusion section of their annual Trust Fund Report urging Congress to act in a “timely way” to reform the program and make it feasible for the long term.
I started downloading the WH OMB’s budget projections with the Obama/Biden’s first budget, the 2010 Budget released in early 2009. I began compiling my own reports and databases. One of them has to do with the Social Security, Medicare and Medicaid Outlays and Payroll Tax Receipts. In the 2010 Budget’s 10 year projections Social Security outlays exceeded Social Security payroll tax receipts by $204 billion. In the 2011 budget projections the shortfall had increased to $554 billion and in the 2012 Budget to $1,001 billion.
Republican’s won back the House in 2010 and in 2011 began a new effort to follow the Trustees’ urging. President Obama was even quoted as saying he might back the effort. This time Sen. Harry Reid led a group of Senators in a “Hands Off Social Security” rally. He is quoted as saying:
‘“It’s in great shape for the next many decades. Let’s worry about Social Security when it’s a problem — today it’s not a problem,” Reid said.’
“The rally follows Reid’s remarks on MSNBC last week that he would only be open to changing the program in 20 years, as well as an amendment he introduced with Sanders prohibiting the Senate from cutting or privatizing Social Security in crafting deficit-reduction legislation.” Michelle Hirsch; Fiscal Times March 28, 2011
So the leader of the Senate Democrats said we should and could wait 20 years to make any changes to Social Security? But that’s the exact opposite of what the Trustees were saying. And the trustees included three cabinet members of the Obama/Biden Administration (Sec. of Treasury, Labor and HHS) in addition to the Social Security Administrator. All of them were urging Congress to act in a “timely way”, not wait 20 years.
By the time the 2013 Budget projections were released in early 2012 the projected shortfall had increased to $1,586 billion. The jump ($1,032 billion) was in large part due to the SS Payroll Tax Holiday that Congress had enacted in 2011 and extended in 2012 at the Obama/Biden Administration’s urging. So early that year I sent a letter to each of the three cabinet secretaries that were trustees. I received a thoughtful letter back from the Assistant Secretary for Economic Policy of the Treasury Department, Janice Eberly. She confirmed that my numbers were materially correct and the shortfall would continue to increase until Congress passed reforms. She included two statements of importance:
“As you note, the Social Security Trustees have for many years recommended in the Social Security Trustees Report that lawmakers take swift action to address Social Security’s long-term financial shortfall. The Trustees can do no more.”
“I assure you that the Administration is committed to making reforms to Social Security…”
Senate Democrat’s continued to delay any efforts to reform Social Security over the next four years. In the 2017 Budget the shortfall increased to $2,611 billion. So in the eight years the Obama/Biden Administration was in office the shortfall in the ten year projections for Social Security grew by $2,407 billion. Yet the Obama/Biden administration never put forward a plan to stop the destruction of the program. In fact, in 2016 President Obama joined Sen. Sherrod Brown and others in calling for an increase in benefits that would have just accelerated the decline of the Social Security Trust Funds.
So for VP Biden to be attempting to use Social Security against President Trump is the ultimate hypocrisy. Democrat’s have been delaying any attempt to reform the program for sixteen years!