WH Splits on Social Security Reform
The Hill reports:
Social Security reform is splitting President Obama’s economic and political advisers.
Obama is being pulled in opposite directions by those whose priorities are fiscal and those whose No. 1 concern is electoral.
Treasury Secretary Timothy Geithner, National Economic Council Director Gene Sperling and Sperling’s deputy, Jason Furman — leading figures in the president’s economic team — are pressing Obama to cut Social Security benefits if necessary, say sources familiar with their positions.
But Obama’s political team, led by David Axelrod, David Plouffe and Jim Messina, are urging the president to understand that backing benefit cuts could prove disastrous to his 2012 reelection hopes, sources say.
The political team is winning the argument so far, but internal debate rages at the White House as Republicans in Congress insist sweeping efforts to restore government finances must include Social Security reform.
“Gene Sperling and Jason Furman and some of the Treasury people started with the posture that we’re the best people to reform Social Security — that was when the Democrats had a majority in both houses of Congress,” said a Democratic policy expert who has met Obama’s economic policy team over the past two years.
“The same people have continued to make that argument even as they’re now responding to conservatives who are stronger in the Congress,” the source, who strongly opposes benefits cuts, told The Hill.
“There are two camps,” the source added. “One camp wants to be able to throw a bone to Republicans and some [centrist] Democrats.
“The political people would prefer not to be accused of being the party that cuts Social Security in those ways. Some political people would like to see the president out there defending the program and making the case that it has nothing to do with the deficit.”
A second Democratic source, who has pushed to reform Social Security by increasing the flow of revenues to the trust fund and reducing benefits, said, “Geithner’s been the most forward-leaning.”
Obama’s economics team is telling the president that benefit cuts would be less draconian with Democrats controlling the White House. Cutting costs for the safety net would help bond markets and restrain future interest rates, they add.
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