This morning's Washington Post has a front page story that not only says social security deficits start in 2011 (2017 according to the Trustees intermediate projection), but reports that Obama has now specifically included social security as an item to be dealt with in the broader analysis of longer term deficit reduction. The precise quote, " 'Social Security can be solved," he said with a wave of his left hand," with him then going on to accurately note medicare and the health system as the more important and more difficult problem. There is no word on what he intends to do or even what sort of mechanism he intends to set up for figuring out how to do it, whatever it is. The only real positive here is that, perhaps looking to the bright side of that piece on huffingtonpost, there will be no privatization scheme as part of any proposal from his administration.
I see two factors in this. The first is the noxious influence of Larry Summers being in the apparent catbird seat as "economics czar." He was part of the Clinton group that was pushing this kool-aid back in the late 1990s. The other may be a more short-term political motive. In particular, "blue dog" Democrats are reportedly unhappy about the scale of the deficits in the fiscal stimulus and want to see some moves to lowering longer term ones. The most important figure in this is Kent Conrad of ND, Chairman of the Senate Finance Committtee, who in late 2007 was part of an effort with Treasury Secretary Paulson to cook up a deal involving both fica tax increases and future benefit cuts for social security, Conrad having long been a deep drinker of the ss kool-aid baloney. That effort was killed from both the left ("no benefit cuts, leave social security alone") and the right, particularly Dick Cheney ("no new tax increases"). Again, Obama's platform called for a possible imposition of fica on higher income individuals, "if needed" in 2019, with no call for benefit cuts. But the Conrad gang wants that, and I have long pointed out that any change would involve benefit cuts, as Republicans will simply filibuster any tax increase that does not also involve benefit cuts. As it is, I hope that Obama's plan runs into complications, and that in the end, nothing is done with or to social security.