A Knock-Down, Drag-Out Brawl in the Making

On Feb. 2, President Barack Obama released his planned budget for fiscal year 2016.  Almost immediately, Republicans in both the U.S. House of Representatives and the Senate made it clear that they’re looking for at least a vigorous debate, and more likely a knock-down drag-out brawl, over Social Security.

Specifically, the President’s budget would transfer tax revenues from Social Security's retirement fund to its disability fund.  Without this transfer, of a type known as reallocation, the disability fund would be unable to pay full benefits beginning in late 2016.  House Republicans voted in January to block such transfers unless Social Security's overall solvency was improved.  They made it known that the need for reallocation was, to them, a reason to pursue broader changes to Social Security.  Democrats, on the other hand, have campaigned for reallocation based, not on overall changes to Social Security, but rather on individual needs for reallocation as they arise.

How will this be resolved?  The budget released Feb. 2 is in effect the Obama administration’s line drawn in the sand.  It’s to be expected that the administration will not shirk a fight over how to manage Social Security.

If you’re wondering whose plan to bet on, here’s a clue.  To quote the budget directly, the Administration will oppose any measures that privatize or weaken the Social Security system and will not accept an approach that slashes benefits for future generations or reduces basic benefits for current beneficiaries.


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