On Tuesday, Will Obama Stand Up for Social Security?

President Obama will deliver his State of the Union speech next Tuesday amid a new flurry of Republican attacks on Social Security. Will he stand firm and defend the popular program, or step aside and let the attacks continue?

Changing The Rules

No wonder Republicans despise Social Security. It's extremely popular among Americans of all political persuasions. It provides better benefits and service than any comparable private-sector program, and does so at a fraction of the cost. Social Security's very existence undermines the GOP's free-market, anti-government ideology.

Republican candidates certainly didn't campaign in 2014 on a platform of gutting Social Security. But now that they control both houses of Congress, that's been their first order of business. Their arguments are based on bad arithmetic. They've also relied on phony “crises,” and the new Congress moved to trigger another one on its very first day in office by blocking a minor shift of funds between the retirement and disability funds with a procedural "rule change."

This adjustment's been made 11 times before. But the Republicans characterized it in histrionic terms, describing a shift of one-tenth of one percent of the retirement fund as a fundamental threat to its stability. Their action, if upheld, would lead to a 20 percent cut in disability benefits by late next year.

The disabled are being used as pawns in a larger, and very cynical, game. The House's action can only be undone if changes are made to the overall Social Security program – which, in this Congress, can only mean cuts to retirement benefits.

Spreading Panic

The GOP's latest move is part of its escalating rhetorical war against Social Security. Rep. Sam Johnson (R-Texas), the head of the Social Security Subcommittee, inflated two recent court cases in order to argue that the disability program is “plagued by fraud conspiracies.” The fraudsters were caught in both cases, and they represented only a tiny fraction of disability claimants. Nevertheless, Johnson said, “the public is fast losing faith in Social Security, and I don’t blame them, because I have too.”

Republicans have been asserting widespread disability fraud for years, but the Social Security Administration's Office of the Inspector General (OIG) has found no evidence to support them. Still, the histrionics keep coming. The new chairman of the House Budget Committee, Rep. Tom Price, told a conservative gathering that Social Security “is a program that right now on its current course will not be able to provide 75 or 80 percent of the benefits that individuals have paid into in a relatively short period of time ...”

This assertion, like those of Price's GOP colleagues, is flatly untrue. Without any other changes, Social Security will be forced to reduce its retirement benefits by approximately one-fourth in the mid-2030s – not by 75 or 80 percent, as Price asserts. But even that relatively modest shortfall is easily addressed, primarily by “lifting the cap” (so that wealthier people pay into the fund at the same rate as other Americans.

Why don't the Republicans ever mention “lifting the cap”? Because they hate taxes as much as they hate government, and because they've received a great deal of financial support from people who would pay more if the “cap” were lifted – people like hedge-fund billionaire Pete Peterson, a major backer of anti-”entitlement” initiatives. Social Security privatization, another Republican goal, would also bring trillions of dollars under Wall Street's control.

No Bargain

Normally one would expect a Democratic President to be one of Social Security's most stalwart defenders. Together with Medicare, it's one of the Democratic Party's signature achievements. Unfortunately, the party's so-called “centrist” wing has also embraced the Peterson crowd's spin.

Economist Monique Morrissey of the Economic Policy Institute told Talking Point Memo's Dylan Scott that “advocates do not trust the President on Social Security.” There are reasons for that. President Obama appointed two Peterson-backed anti-Social Security operatives, Alan Simpson and Erskine Bowles, to head a “deficit commission” whose mandate included Social Security. He proposed the “chained CPI” benefit cut in his budget for the 2014 fiscal year. And he has repeatedly expressed interest in a “grand bargain” with Republicans that includes benefit cuts.

Now there are worrisome signs that the “Grand Bargain” may be coming back. And the White House refused to comment on the Republican move to slash disability benefits, and perhaps the entire program, despite Scott's repeated attempts to get the administration on record.

What Will the President Do?

We agree with Mark Miller of Reuters, who said “the new Republican-controlled Congress has handed (Obama) another opportunity to act boldly ...”

But is that even a possibility? It could happen. The president has taken a firmer stance against the Republicans in recent months. He's shown more inclination to use his executive authority, and less inclination to meet Republicans further than halfway in his rhetoric. (Perhaps he's tired of all the rabbit punches they've thrown when he does.)

The White House now seems to sense that over-eagerness to compromise was perceived as weakness. It paid a steep political price for offers that were too generous toward the Republicans. It knows it must also now deal with Democrats in the House and Senate who are less willing to sign on to unprogressive and unpopular agreements.

It's also time for the president to consider his legacy. Does he really want to be remembered for rolling back one of his own party's greatest achievements?

If the president is feeling especially bold he could join with senators like Elizabeth Warren, Bernie Sanders, and Sherrod Brown by endorsing an increase in Social Security. Although that would represent a sharp break with his past positions, the idea is very popular with voters.

At a minimum, the president must take a firm stand against the Republicans by drawing a line in the sand and opposing any cuts to Social Security.

That's not to say he will. He may remain silent on the issue, forgoing an opportunity to draw a sharp distinction between the parties. Or he may offer Republicans a new “grand bargain.” But that could create a rift with members of his own party, and would further weaken the once-striking political advantage his party once enjoyed on this issue.

Social Security is a critical issue for Americans. The Republicans' unexpectedly fierce attacks on it offer the President an opportunity to set the political tone for the next two years. Next Tuesday we'll see whether he seizes that opportunity.