As a quick clarification to Jane Hamsher's post, no one at the White House ever mentioned the Orszag-Diamond plan to me. I brought it up in this post as an example of the sort of thinking that administration members had done on Social Security in the past, not as something that anyone was floating for implementation. If I was unclear on that, I apologize.What people at the White House have told me on Social Security -- and what I wrote in the post she's referencing -- is that there's no intention to touch Social Security in the foreseeable future. It's not a priority and it's not a political winner. Some have lamented that fact. In a perfect world, they suggested, it would be preferable for progressives to fix the system's minor liabilities now rather than wait for conservatives to opportunistically hammer away at it later. They did not say what those fixes should look like, because the White House isn't building policy on that score. (If you want an idea, though, you can look at Obama's plan from the election.) The problem, they say, is health care, not Social Security, and that's where the White House is focusing.Meanwhile, there have also been changes in the thinking of the center-left economic community on how to fix Social Security. My interview with Henry Aaron over the weekend -- which has now made for quite a few blog posts -- touched on this. "One way to handle Social Security is that we cut benefits and raise taxes and split the difference," he said. "That's sort of where I was. It's not where I'm at. I think it's a bad idea to cut benefits at all. There’s a better case for raising them than lowering them. That means you have to find the financing to cover things, of course. But benefits were reduced statutorily in 1983, and there are more cuts yet to be implemented from the legislation. The take home pay from Social Security is down in addition because you take out Part B premiums. And third, everything else everyone that serves as retirement income has become riskier. The importance of stability from the one remaining large defined benefit plan is enhanced." If you're really interested in this question, Aaron kindly gave me permission to upload a speech he gave further detailing his thinking on the question. It includes this nice table laying out how relatively stingy the U.S. pension system is:
It's unclear why the richest nation in the world would have to cut its peculiarly spare pension program further. It's even less clear why we'd do it having just seen how unstable other sources of savings can become.
It's unclear why the richest nation in the world would have to cut its peculiarly spare pension program further. It's even less clear why we'd do it having just seen how unstable other sources of savings can become. 
