A Crossroads for Hillary
Hillary Clinton is making all the early moves of someone preparing to run for president, though she has given herself plenty of time to rest, rejuvenate, and review a final decision. Now, however, President Obama’s ill-conceived plan to cut Social Security benefits via a “technical” change in the inflation index will force Clinton to make an awkward choice.
Most Democrats in both houses of Congress are not happy with this backdoor cut in Social Security. It is both fiscally unnecessary and spectacularly bad politics. Republican leaders are already bashing Obama for selling out retirees. After Obama released his budget, Republican Congressional Committee Chairman Greg Walden of Oregon went on CNN to accuse the president of "a shocking attack on seniors." Resolutely defending Social Security in the face of periodic Republican forays at cutting or privatizing America’s most popular program has always been one of the Democrats’ great appeals. Obama gave that away.
Clinton, of course, narrowly lost a bitter contest for the 2008 nomination to Obama. But since then, the Clintons and the Obamas have been thick as thieves. Hillary served with distinction as Obama’s secretary of state. Bill’s Global Initiative has partnered with the administration. The former president served effectively as both a surrogate and adviser to the current one, at moments when Obama’s 2012 re-election campaign seemed to be faltering.
At some point between now and 2016, Hillary Clinton would need to signal to a restive party rank and file that she will not just be an Obama third term or an Obama policy clone; that she will not be the fourth consecutive Democratic president since 1976 (Carter, Bill Clinton, Obama) to be disappointingly to the right of the party base on key pocketbook issues. Also, as any good feminist executive can attest, a part of the necessary ritual breaking of the glass ceiling involves distancing oneself from a male predecessor and becoming a leader in your own right. (In the case of someone named Clinton, it wouldn’t hurt to break with Wall Street, either. Bob Rubin was a top adviser to both Bill and Hillary.)
In the grand scheme of Hillary Clinton’s need to make herself the inevitable, irresistible nominee for 2016 (this time for real), May 2013 is far too early to break with Obama. She will need his blessing as part of her big-tent strategy. But given Obama’s blunder on Social Security, a selective break is exactly what Clinton needs to do. She has been silent on the issue so far, but she needs to say what she thinks.
Will Clinton be loyal to her president on a core (and bad) policy? Will she duck? Or will she say forthrightly, as Elizabeth Warren did, that cutting Social Security via a change in the inflation index—or any other way—is a terrible idea? With Warren as a leader and possible candidate of the party’s progressives, Clinton will find herself repeatedly benchmarked by progressives against Warren, even if Warren makes gestures that she does not intend to run if Clinton is a candidate. So far, Clinton has said nothing about the proposed Social Security cut, and efforts to get a spokesperson to divulge her views were futile. But Democrats should press Clinton to state her position.
The Social Security issue directly connects to the larger deficit debate. Obama threw Social Security onto the pyre only because he thinks we need a decade of deficit reductions. But the story that we need to target a particular debt ratio by a certain date was always a perverse idea. Cut the budget in the face of a depressed economy, and you further depress growth. The debt may decline, but so does GDP. Many Democrats have been seduced by this faulty logic (and by the campaign contributions of the Wall Streeters behind such campaigns as Fix the Debt). For some Democrats in Congress, such as those who backed the Bowles-Simpson Commission, this as a debate about how to cut the deficit—by reducing spending or raising taxes.
However, that’s the wrong debate—the whole premise that we need to reduce the deficit as a path to recovery is bad economics. Obama’s foolish proposal to cut Social Security has one big virtue: It got the congressional Democrats’ attention. Now there is pushback—not just against the Social Security cuts—but against the entire premise of a ten-year march to debt reduction. Beyond Hillary Clinton’s political needs and calculations, the Democratic Party desperately needs leaders to wean their president from a foolish and self-defeating policy. Who better than Hillary?
Robert Kuttner’s just-published book is Debtors’ Prison: The Politics of Austerity Versus Possibility.
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