SOTU theme: 'How We Win the Future'

[flpoljunkie]

SOTU theme: "How We Win the Future"

by Jed Lewison
Mon Jan 24, 2011 at 03:00:04 PM PST

ABC's Jake Tapper reports:

A cavalcade of Democratic talking heads were beckoned to the White House to be briefed on the president’s State of the Union address by White House senior advisers David Axelrod and Stephanie Cutter and communications director Dan Pfeiffer. ... Attendees were told, as ABC News and others have reported, that the theme of the speech is "How We Win the Future," a subject for which the president will outline five pillars: innovation, education, infrastructure, tackling the national debt, and government reform.

President Obama's focus on economic growth will provide a clear contrast to the GOP's first three weeks in control of the House. Although Republicans are scrambling to take credit for economic recovery, they haven't a passed a single piece of legislation that has become law. Moreover, instead of working with the administration or the Senate to focus on job creation, the Republican House has been entirely focused on a right wing agenda totally disconnected from anything to do with the public's number one priority: jobs.

While President Obama will argue that long-term national debt is an economic problem, he won't embrace the GOP's $2.5 trillion austerity plan, which would slash non-defense discretionary spending and freeze it at 2006 levels for the next decade. In addition, as Joan noted earlier, President Obama won't get sidetracked by calling for cuts in popular programs like Social Security, though he will say that if Republicans want to propose cuts, everything should be in the table. (Sorry, Howard.)

In contrast to the GOP's program of indiscriminate, across-the-board budget cuts, President Obama will argue that any reductions should be limited to ineffective programs. He'll also argue that our economic future depends on increasing our national investment in things like infrastructure, education, and new and renewable sources of energy. As Greg Sargent notes, the media will likely interpret the speech as a "return to centrism," but that will say more about their changing definition of "centrism" than anything else. The political context in which the State of the Union will be delivered is certainly different than that of 2009 of 2010, but the underlying principles will remain the same.

(Emphasis mine.)

[high density]

1. Why on earth would Obama call for cuts in Social Security?

Obama also won't call for killing grandma or kittens in his state of the union address.

[flpoljunkie]

2. Why, indeed. Is it still not the 'third rail' of politics?

Social Security does not add to the budget deficit. It is funded separately.

Social Security Defenders Discredit Linking Social Security to Deficit

Well, the defenders of Social Security repeatedly insisted that Social Security does not cause one dime of debt but pays its own way with income from three dedicated revenue streams -- the Federal Insurance Contribution Act, taxation of a portion of high-income recipients' Social Security benefits and interest payments on U.S. Treasury obligations purchased with trust fund surpluses. Further, they said, to assure the public that future benefits would be paid, the 1983 Social Security legislation purposely designed the program so that revenues would exceed benefit payout for several decades. Those surpluses now amount to over $2 trillion and are projected to exceed $4 trillion. More than that, Social Security is permitted to pay benefits only to the extent that it has resources to do so. Further, it cannot borrow. Those real life facts shredded the charge that Social Security contributes to the federal deficit. It does not and cannot.

Chairs' Claim That Social Security Is Unsustainable Does Not Hold Up

They claim that Social Security on its current course will fall "to its knees... it is spending more on benefits than it receives in revenues." They reach that conclusion by limiting "revenues" to FICA receipts and ignoring the two other income streams. Further, the chairs undermine the unsustainability argument by explaining that the long-term, 75-year Social Security shortfall is only 1.92 percent of payroll. In other words, merely increasing the FICA rate by one percentage point for both employee and employer would put the program into long-term 75-year actuarial balance. That's all. It would be that easy. Indeed, employee earnings are projected to surpass that; as a result, the 1% boost would not diminish their living standards. Increasing the employee and the employer FICA rate by 1/20th a year for 20 years would do the trick. And, the chairs embrace a proposal made by Candidate Obama to restore the amount of pay subject to FICA to the 90% of total national pay it was meant to cover. That alone would reduce the shortfall by a third. In combination, the two measures would enable Social Security to fully fund currently promised benefits for 75 years and, indeed, improve benefits. Far from being unsustainable, modest measures would fully fund the program and enable increased benefits. Unsustainability charges dismissed.

http://www.huffingtonpost.com/joan-and-merton-bernstein/deficit-commission-chairs_b_812399.html