There is a report that Obama is considering featuring Social Security reform, including benefit cuts, in his State of the Union address:
… The tax deal negotiated by President Barack Obama and Senate Republican leader Mitch McConnell of Kentucky is just the first part of a multistage drama that is likely to further divide and weaken Democrats.
The second part, now being teed up by the White House and key Senate Democrats, is a scheme for the president to embrace much of the Bowles-Simpson plan — including cuts in Social Security. This is to be unveiled, according to well-placed sources, in the president’s State of the Union address.
The idea is to pre-empt an even more draconian set of budget cuts likely to be proposed by the incoming House Budget Committee chairman, Rep. Paul Ryan (R-Wis.), as a condition of extending the debt ceiling. This is expected to hit in April.
White House strategists believe this can also give Obama “credit” for getting serious about deficit reduction — now more urgent with the nearly $900 billion increase in the deficit via the tax cut deal. …
Bad idea. Dean Baker suggests another route:
…supporters of Social Security and Medicare have to … push President Obama to announce in advance that he will never sign a debt ceiling bill that includes cuts to Social Security and Medicare, the countries two most important social programs.
These programs are crucial to the financial security and health of tens of millions of people. If there are to be changes in these programs then they should occur after a full public debate in the light of day, not as the result of Republican trickery and parliamentary game playing.
This would be a hugely popular position since not only Democrats, but also independents and even Tea Party Republicans overwhelming support Social Security and Medicare. …
Why not propose raising the ceiling on payroll taxes instead? The rich and powerful are used to getting their way, the recent tax cuts are an example of this, so they see no downside to pushing for deficit reduction and reductions in social programs they don’t need. They believe they have no reason to fear a tax incrase of any kind, an increase in the ceiling on payroll taxes included, and the recent tax deal lends support to that notion. But if it’s clear that they will be asked to shoulder a large chunk of the costs of deficit reduction (I can dream), the powerful interests pushing for cuts may suddenly find that Social Security is in much better shape than they realized.