Social Security hasn't really been a major issue in Barack Obama's presidency. Insofar as it came up at all, it was in the context of Obama's attempts to reach a "grand bargain"with congressional Republicans to reduce entitlement spending and increase taxes.
So it's startling to see him declare Wednesday that Social Security shouldn't be cut, but instead expanded.
"We should be strengthening Social Security," he declared. "Not only do we need to strengthen it, it is time we finally made Social Security more generous and increase the benefits so that today’s retirees and future generations get the dignified retirement that they have earned." The expansion, he argued, should be financed by "asking the wealthiest Americans to contribute a little bit more."
In doing so, Obama is getting on board a movement that's been brewing within the Democratic Party for a while now. Bernie Sanders, for instance, has introduced legislation that would increase benefits and pay for it by taxing payroll above $250,000 a year; currently, only the first $118,000 in income is taxed. Martin O'Malley responded with an even more ambitious proposal. Elizabeth Warren has been a particularly vocal advocate, proposing an amendment calling for benefits to be increased that every Senate Democrat, save two, voted for. Rep. John Larson (D-CT), Rep. Gwen Moore (D-WI), Sen. Brian Schatz (D-HI), Sen. Mazie Hirono (D-HI), and Sen. Sherrod Brown (D-OH) have eachintroduced their own plans.
|President Obama’s huge reversal on Social Security is a big win for liberals|
There's expanding Social Security, and there'sexpanding Social Security
That being said, most expansion proposals are fairly modest. Sanders, for example, wants to increase the minimum benefit for poor workers, to use CPI-E (a faster inflation measure that would mean bigger cost of living adjustments), and do an across-the-board benefit hike by changing what's known as the Primary Insurance Amount formula (for the nitty-gritty on how this would work, click here).
That's an expansion, but it wouldn't bring Social Security close to playing a central role in retirements, capable of replacing private pensions and 401(k)s that are collapsing and gobbling up billions in fees, respectively. It also wouldn't eliminate senior poverty, the way establishing a poverty-level minimum benefit for all seniors, not just ones who worked, would do.
New America's Michael Lind, Steven Hill, Robert Hiltonsmith, and Joshua Freedman outlined a more ambitious option, which would add on a basic income set at about the poverty line (the specific number is $11,669) to existing Social Security. That has a shortcoming in that only retirees with earnings get the benefit, but it's simple enough to expand to encompass everyone, and it would do much more to take the place of private pensions.
Of course, it's unlikely Obama would get on board a plan quite that drastic. And it's basically impossible to imagine anything he does endorse getting enacted. But the very fact that he now wants to expand Social Security is a huge success for the movement for expansion, and a sign that the party as a whole is moving significantly leftward on this issue.
For more on the case for moving away from private savings and toward a vastly expanded social security system, see this piece.