- The Washington Times - Tuesday, July 13, 2010

In a rare departure from this year’s intense political posturing over the soaring budget deficit, House leaders of both parties recently signaled that they are prepared to tackle a leading long-term liability — Social Security — by raising the retirement age.

Politicians often talk in generalities about cutting the deficit, but discussing specifics about how Congress may curb the growth of the biggest and most popular programs such as Social Security and defense is controversial and usually taboo in an election year.

But lessons learned from the debt crisis in Europe and worries that the U.S. could soon confront its own debt crisis, with annual deficits projected at about $1 trillion for years to come, may have prompted the unusually frank comments by House Majority Leader Steny H. Hoyer, Maryland Democrat, and House Minority Leader John A. Boehner, Ohio Republican.

Speaking in unrelated forums, both leaders stressed that with people living longer and enjoying better health in their senior years, the nation simply can’t afford any longer to be paying out benefits for as long as 30 years after retirement.

“We need to look at the American people and explain to them that we’re broke,” Mr. Boehner said in an interview last week with the Pittsburgh Tribune-Review.

Besides raising the retirement age for full Social Security benefits to 70 for people now 50 or younger, Mr. Boehner suggested curbing benefit growth by tying cost-of-living increases to the consumer price index rather than growth in wages, and providing benefits only to those who need them.

“If you have substantial non-Social Security income while you’re retired, why are we paying you at a time when we’re broke?” he said. “We just need to be honest with people.”

Mr. Hoyer also said it was time to be honest with the public that the sheer size of the deficits and public debt means any serious effort to cut them back to manageable levels will require cuts and reforms in all major programs — including defense and Social Security — as well as tax increases.

“We could and should consider a higher retirement age, or one pegged to life span,” he said in a speech last month before the Third Way think tank. Like Mr. Boehner, he suggested making Social Security and Medicare more “progressive,” that is, providing benefits primarily to low-income people who need them the most.

Mr. Hoyer also endorsed specific cuts in defense weapons systems sought by the White House, and said the House Armed Services Committee is considering whether to adopt them.

“I fear that if we cant decide what we can afford to do without today, well be forced to make much more draconian cuts in the years to come,” he said.

The comments reveal that, beneath the heated rhetoric as each party seeks to gain a political advantage by blaming the other for surging deficits, congressional leaders appear to be laying the groundwork for negotiations on a solution — possibly as early as this fall.

A deficit commission appointed by President Obama is due to present its findings on how to reform major programs like Social Security and defense in November, and it is widely expected to endorse measures like raising the retirement age and others mentioned by the leaders.

Mr. Obama refused to rule out charging the commission with finding deficit solutions, including a value-added tax that would be the first-ever broad national tax on consumption.

One clue that both parties are getting serious about addressing the deficit problem is neither the White House nor congressional leaders of either party chose to single out for attack the others’ unusually frank discussion on Social Security.

In fact, the interview in which Mr. Boehner detailed his views on Social Security was the same one in which he suggested that the Democrats’ Wall Street regulatory reforms were like killing “ants” with a nuclear weapon — comments that the White House and liberal groups immediately denounced.

Mr. Boehner and Mr. Hoyer repeated the same political talking points that analysts say would make it harder to control the deficit in the future.

Mr. Boehner advocated continued free spending on defense and said that should Republicans take control of the House in the fall elections, one of his first acts as speaker would be to repeal the $534 billion in Medicare cuts used to finance the Democrats’ expansion of health care this year.

Many of those cuts are the same ones seen in a Republican budget plan, the only one to date that carries out the GOP pledge to get the deficit under control without tax increases, authored by Rep. Paul D. Ryan of Wisconsin.

Mr. Hoyer repeated a frequent Democratic defense of the gaping exemptions in congressional budget rules, which generally require new spending programs to be offset by spending cuts or tax increases elsewhere in the budget.

Excluded from those “pay-as-you-go” rules are such major trillion-dollar expenses as Medicare doctor reimbursements and President George W. Bush’s tax cuts for the middle class. Mr. Hoyer said that was because Congress would routinely override the rules to keep those programs in place, and render the law “toothless.”

Still, good government groups were impressed at how far the leaders went toward signaling a consensus on ensuring the solvency of Social Security — one of the government’s biggest long-term budget challenges.

“It seems political leaders are finally getting the message” that the public wants action, said the Committee for a Responsible Federal Budget in a blog on Social Security. “Just getting congressional lawmakers to propose solutions in public has been difficult to come by. Not anymore.”

Congressional leaders have come to realize that Social Security — once considered the untouchable “third rail” of politics — is now the “low-hanging fruit” among the many seemingly intractable budget problems facing Congress, the committee said.

“Compared to fixing Medicare or making significant changes to our tax system, reforming Social Security is a walk in the park,” it said. “The funding gap is much smaller than it is for Medicare, and the options to solve Social Security’s problems are clear and easy to quantify.”

It helps that European countries from France and Britain to Greece are moving toward raising the retirement age for their pension systems to address their serious overspending problems and reassure investors in European debt markets.

The International Monetary Fund recently noted that solving such long-term budget problems carries the advantage of calming financial markets today while posing no immediate threat to economic growth like raising taxes or cutting stimulus spending.

• Patrice Hill can be reached at phill@washingtontimes.com.

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