Tags: Obama | Social | Security | Budget | Plan

Obama Holds Line on Social Security in Budget Plan

Monday, 14 Feb 2011 11:20 AM

Social Security would not change significantly under President Barack Obama's 2012 budget plan, leaving for later an eventual fiscal reckoning on the massive U.S. pension program for the elderly and disabled.

Saying he wants to work with Congress on reform, Obama laid out principles reflecting Democrats' long-held commitment to defending the politically popular program, but offered no breakthrough proposals to secure its long-term stability.

"Social Security is a solemn commitment to America's seniors that we must preserve," the president said in his 2012 budget message. "That is why I have laid out my principles for reform and look forward to working with the Congress."

In a statement that could leave the door open for negotiation on modest benefit cutbacks for future beneficiaries, Obama said he "will not accept an approach that slashes benefits for future generations. No current beneficiaries should see their basic benefits reduced."

Taking a stand on the issue of privatizing part of the program, an idea some Republicans have embraced in the past, Obama said "the administration will oppose any measures that privatize or weaken the Social Security system."

He said any reform must bolster the program and he backed strengthening retirement security for low-income seniors and maintaining "robust" disability and survivors' benefits.

Along with the Medicare and Medicaid healthcare programs, Social Security is one of the three major entitlement programs that in fiscal 2010 accounted for 44 percent of non-interest federal spending, up from 30 percent in 1980.

By 2035, when surviving baby boomers will be 70 or older, these three programs could account for more than 60 percent of non-interest federal spending.

The U.S. budget deficit is forecast to reach $1.48 trillion this fiscal year, or 9.8 percent of U.S. gross domestic product, the highest it has been in decades.

Due to reforms in 1983, Social Security had been running a cash surplus, with taxes exceeding costs, until 2010.

"The 2010 Social Security trustees' report projects that the trust fund will return to cash surplus briefly as the economy improves, but that cash deficits will reappear in 2015," said long-term analysis in the budget plan.

© 2017 Thomson/Reuters. All rights reserved.

   
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Social Security would not change significantly under President Barack Obama's 2012 budget plan, leaving for later an eventual fiscal reckoning on the massive U.S. pension program for the elderly and disabled.Saying he wants to work with Congress on reform, Obama laid out...
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Monday, 14 Feb 2011 11:20 AM
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