The Rose Garden: Obama Backed Off Social Security Push

Posted May 15, 2009 at 5:54pm

The White House quietly sought to get the ball rolling on overhauling Social Security earlier this year, but it either abandoned or significantly downgraded the process under pressure from Speaker Nancy Pelosi (D-Calif.) and outside liberal interest groups, according to sources familiar with the stalled effort.

[IMGCAP(1)]Though President Barack Obama wants to move first this year on health care reform and energy legislation, senior aides — and according to one Congressional source, the president himself — were in touch with lawmakers about putting together a task force of Members and possibly others who would informally compile recommendations about what should be done to shore up Social Security and what would be feasible politically.

With a recent Social Security Trustees report showing the system’s financial prospects to have worsened, White House aides are now reassessing the timing of a move on Social Security. But with health and energy legislation both well out of the gate, it is unlikely that Social Security could find an opening until next year at the earliest. And the prospect of Congressional action on the “third rail— of U.S. politics during an election year is dim at best.

Sources cited several reasons for the White House outreach early this year, not the least of which is the long-standing interest of top White House aides in fixing the nation’s retirement system.

Among the key players on the White House side was Office of Management and Budget Director Peter Orszag, who as an economist was a recognized expert on the issue. During former President George W. Bush’s failed effort to overhaul Social Security in 2005, Orszag co-authored one of the prominent reform plans designed to influence debate. Also involved was White House Chief of Staff Rahm Emanuel, who is avidly maintaining his wide contact base on Capitol Hill.

But officials with knowledge of White House strategy said the president’s advisers also hoped the task force could be used as ammunition to help pass the economic stimulus bill, which they knew would cost hundreds of billions of dollars even as the federal deficit ballooned.

The task force would become a public sign of Obama’s commitment to taming the government’s long-term fiscal crisis, something that might pick up votes for the stimulus among Blue Dogs and other fiscally conservative lawmakers.

The effort also came at a time when the White House was touting its outreach to Republicans. Several GOP lawmakers were contacted by Obama aides, and the task force was envisioned as a bipartisan affair.

Among the lawmakers said to be in the loop on the discussions are several long known to be concerned about the issue, including Senate Majority Whip Dick Durbin (D-Ill.), Senate Budget Chairman Kent Conrad (D-N.D.), Senate Budget ranking member Judd Gregg (R-N.H.), Sen. Lindsey Graham (R-S.C.), Pelosi, several members of the Blue Dog Coalition and House Budget ranking member Paul Ryan (R-Wis.). Most of the major seniors groups were also aware of the push, as were labor officials.

But Pelosi, backed by union allies and officials with some of the more liberal seniors advocacy groups, was cool toward addressing the issue.

“Pelosi pushed back,— said an official with one of the outside organizations. He indicated that moving hastily in a climate of urgency might lead to hasty solutions that could weaken the program. “She has the same reasons we do — this should go through the regular committee process and be handled by people who have proper knowledge of the program,— he said. “We don’t want to see any fast-track, base closing’-style effort.—

But Pelosi, whose office did not respond to requests for comment, is said to be wary of touching the politically charged issue. Pelosi also argued that the task force would take power away from her committee chairmen, according to a senior House Democratic aide. And she asserted it would distract from the effort to move health care and energy legislation, the Democratic aide said.

A statement released by Pelosi in response to the trustees report omitted a specific commitment to Social Security overhaul and instead suggested indirect methods of fixing the system.

“By strengthening our economy and creating jobs and by finally tackling the challenge of health care, we are already working to protect the promise of Social Security and Medicare for all Americans,— she said.

By contrast, House Majority Leader Steny Hoyer (D-Md.) is publicly pushing for Congress to begin addressing the issue later this year.

In a statement after the latest report was issued, Treasury Secretary Timothy Geithner, who serves as one of the trustees, signaled Obama’s determination to fix Social Security at some point.

“The longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be,— Geithner said. His rationale was reminiscent of that made by Bush officials during 2005.

“This president will work to build a bipartisan consensus to ensure the long-term solvency of Social Security,— Geithner said. “The president explicitly rejects the notion that Social Security is untouchable politically and instead believes there is opportunity for a new consensus on Social Security reform.—

But without a public commitment to move forward on a date certain, some are skeptical whether Obama has the will to spend political capital and defy the powerful political forces arrayed against acting in the near term.

White House officials did not respond to requests to comment.