NYT: Social Security Too Hot to Touch? Not in 2008

[Omaha Steve]

http://www.nytimes.com/2008/08/14/us/politics/14retire.html?_r=3&adxnnl=1&oref=slogin&adxnnlx=1218751437-TA9qXK4hIBzYmnk9eprIlw&oref=slogin


Alice Keeney/Associated Press

John McCain, last year in Port Royal, S.C., discussed an issue that has meant trouble for many presidential candidates.


By LARRY ROHTER
Published: August 13, 2008

Ignoring the warnings that Social Security can derail political careers, Senator John McCain has infuriated his party’s right wing by saying that “everything has to be on the table” in discussions about keeping Social Security solvent.

Mr. McCain, the presumed Republican presidential nominee, does indeed seem to have put everything on the table. In the space of one week, he opened the door to an increase in Social Security taxes, denied he would raise payroll taxes and then, through an ally, called a tax increase a “dumb idea.” He has also sowed confusion about whether he favors privatizing Social Security, or continuing with the current system.

Senator Barack Obama, Mr. McCain’s likely Democratic rival, has been attacked for offering his own, far more specific plan that would raise payroll taxes, though only for the rich. But that criticism has not come from his party and has not been as intense as the denunciations of Mr. McCain.

Party elders and analysts who have seen many a politician fall victim to the jinx of Social Security, which was signed into law 73 years ago Thursday, say they are not surprised.

“All you have to do is open your mouth and you’re dead meat,” said Bill Frenzel, a former Republican congressman from Minnesota who is now a Social Security analyst at the Brookings Institution. “If you say you might have to raise payroll taxes, the no-tax crowd jumps all over you. Say you might have to decrease benefits, and the AARP and the Democrats will kill you.”

Both candidates agree that adjustments to the Social Security formula are necessary because the trust fund, though in surplus now, will begin showing a deficit around 2018, according to actuarial forecasts. Some project that the fund will be exhausted shortly after 2040; others, using less pessimistic calculations of economic and population growth, say that would occur decades later.

Still other economists say such warnings are fear-mongering, and argue that economic growth and immigration, combined with some tinkering, could keep the system solvent indefinitely.

FULL story at link.

http://www.nytimes.com/2008/08/14/us/politics/14retire.html?_r=3&adxnnl=1&oref=slogin&adxnnlx=1218751437-TA9qXK4hIBzYmnk9eprIlw&oref=slogin