Yes, Joe Biden Has Long Pushed Cuts to Social Security. End of Story.

Bernie Sanders is right to call out Biden’s objectionable record on cutting Social Security—no matter what Paul Krugman says.

Max B. SawickyJanuary 22, 2020

Bernie Sanders: 1, Paul Krugman and Joe Biden: 0 (Photo by Al Drago/Getty Images)

The 2020 Demo­c­ra­t­ic pri­ma­ry took a new turn this week as Joe Biden came under fire from the Bernie Sanders cam­paign over his record on propos­ing cuts to Social Secu­ri­ty. The two cam­paigns now have each released com­pet­ing ads over the issue, with the Biden camp accus­ing Sanders of an unfair attack, and Sanders respond­ing with a 30-sec­ond spot that quotes Biden say­ing, When I argued if we should freeze fed­er­al spend­ing, I meant Social Secu­ri­ty as well.”

The Krugman charge (and Biden’s defense) is patently false.

Right on cue, the main­stream media has wad­ed into the issue, with the ten­u­ous­ly lib­er­al Paul Krug­man con­tin­u­ing his anti-Sanders jere­mi­ads from the New York Times edi­to­r­i­al page.

The lat­est Sanders atroc­i­ty alleged by Pro­fes­sor Krug­man is that Sanders spread false­hoods about Joe Biden’s record in sup­port of cuts to Social Secu­ri­ty benefits.

It does not pay to get too worked up about polit­i­cal back­bit­ing in a pri­ma­ry. In Novem­ber, we will need every­body to defeat Don­ald Trump, so remarks that could have the effect of dri­ving oth­ers to deny the even­tu­al Demo­c­ra­t­ic nom­i­nee their vote should be avoided.

Sanders him­self has cau­tioned his sup­port­ers, We don’t need to demo­nize those who may dis­agree with us.” A sim­ple test for a gen­uine Sanders cam­paign sup­port­er is whether they are march­ing in this direction.

Still, the Krug­man charge (and Biden’s defense) is patent­ly false. 

The first shot in this brouha­ha was an email released by the Sanders cam­paign that includ­ed clips of Biden on the floor of the U.S. Sen­ate in 1995 tout­ing his polit­i­cal courage by embrac­ing cuts in Social Secu­ri­ty ben­e­fits, osten­si­bly to save the pro­gram. Sanders argues that such cuts would be bad pol­i­cy, and that Biden’s past advo­ca­cy would make him vul­ner­a­ble to Trump in a pres­i­den­tial elec­tion. Sanders, for his part, has long advo­cat­ed expand­ing Social Secu­ri­ty and intro­duced a bill in Con­gress to do so last year. 

Biden’s remarks placed him in good com­pa­ny. The Demo­c­ra­t­ic Par­ty estab­lish­ment, includ­ing Pres­i­dents Bill Clin­ton and Barack Oba­ma, as well as House Speak­er Nan­cy Pelosi, have tra­di­tion­al­ly embraced the main­stream view of Social Secu­ri­ty: name­ly that because it is out of bal­ance, if viewed in iso­la­tion over the next 75 years, some com­bi­na­tion of pay­roll tax increas­es and ben­e­fit cuts will be required to pro­tect” or mod­ern­ize” the pro­gram. A relat­ed objec­tive is to reduce the fed­er­al bud­get deficit over the long term. The con­nec­tion is that if Social Secu­ri­ty rev­enues are not suf­fi­cient to finance ben­e­fits, the mon­ey must come from some­where else.

This argu­ment has been hashed out many times. There is a good polit­i­cal rea­son to view Social Security’s finances in iso­la­tion: it pro­vides sup­port if you accept that intakes from the wide­ly accept­ed pay­roll tax must match out­puts for pro­gram ben­e­fits. Such a view requires a belief that the rev­enues, large­ly from pay­roll tax­es, must mea­sure up to ben­e­fit oblig­a­tions in real-time (annu­al­ly, in oth­er words). Such a restric­tion on Social Security’s finances is not applied sim­i­lar­ly to oth­er gov­ern­ment spend­ing. We don’t demand that the Depart­ment of Defense, for instance, be self-financing.

The advo­ca­cy of trim­ming ben­e­fits for the sake of pro­tect­ing Social Secu­ri­ty, or to reduce the bud­get deficit, is a respectable posi­tion, though I and many oth­er pro­gres­sive econ­o­mists hap­pen to believe it is com­plete­ly wrong. Econ­o­mists Dean Bak­er and Mark Weis­brot offer an exten­sive ver­sion of this case in their clas­sic book Social Secu­ri­ty: The Pho­ny Cri­sis in which they argue, there is no eco­nom­ic, demo­graph­ic, or actu­ar­i­al basis for the wide­spread belief that the pro­gram needs to be fixed.”

What fix­ing the pro­gram” gen­er­al­ly means is rais­ing rev­enues (by reduc­ing ben­e­fit costs) that won’t be need­ed for more than 15 years. Instead, they would be deposit­ed into the Social Secu­ri­ty Trust Fund, which in 2018 had reserves equiv­a­lent to 289% of annu­al pro­gram costs. By mid-range esti­mates, the fund is not pro­ject­ed to run out of mon­ey until 2036. By more opti­mistic assump­tions, it would nev­er run out. Even if it did, the fed­er­al gov­ern­ment would still have pay­roll tax rev­enue and could eas­i­ly sup­ple­ment it to meet ben­e­fit obligations.

Ene­mies of the pro­gram like to say the Trust Fund is going broke” — or isn’t real. In fact, the Trust Fund is quite real. It holds U.S. gov­ern­ment secu­ri­ties, the safest finan­cial asset in the world, backed up by the pow­er to tax the rich­est coun­try in the world.

The real agen­da here is to use deficit pan­ic to arrest any growth in the pub­lic sec­tor. And it’s worked pret­ty well. For Fis­cal Year 2019, fed­er­al out­lays were 21.3% of GDP. Under Repub­li­can Pres­i­dent Ronald Rea­gan, they were as high as 22.9%.

The game here is that Democ­rats do the hard work of cut­ting spend­ing, out­rag­ing their con­stituents and los­ing elec­tions, and then Repub­li­cans come in and set about blow­ing up the deficit all over again, with tax cuts for their rich donors. Bill Clin­ton and Barack Oba­ma both fell into this trap — and Joe Biden was a stead­fast ally. Krug­man has writ­ten about all this elo­quent­ly, so he had to real­ly stretch to gin up his attack on Sanders.

At the end of the Sanders cam­paign email, there is a brief ref­er­ence to a speech Biden made at the Brook­ings Insti­tu­tion in 2018. Krug­man seizes on this ref­er­ence to claim that it does not sub­stan­ti­ate Sanders’ crit­i­cisms, con­clud­ing that Sanders flat-out lied.” In fact, while Biden’s lan­guage is less than forth­right, he does push a posi­tion, pop­u­lar among cen­trist Democ­rats, that has long been used to jus­ti­fy cuts to Social Security.

In his Brook­ings speech, Biden claimed that Social Secu­ri­ty and Medicare can stay — it still needs adjust­ments — but it can stay.” This is per­fect­ly in line with the estab­lish­ment deficit nag­ging dis­cussed above, these days often crit­i­cized by Krug­man him­self. Even if you doubt that infer­ence, the video clips, described by Biden as doc­tored” (itself an…untruth, accord­ing to the New York Times), are unambiguous.

Here is Biden speak­ing to Meet the Presss Tim Russert in 2007:

Tim Russert: Sen­a­tor, we have a deficit. We have Social Secu­ri­ty and Medicare loom­ing. The num­ber of peo­ple on Social Secu­ri­ty and Medicare is now 40 mil­lion peo­ple. It’s going to be 80 mil­lion in 15 years. Would you con­sid­er look­ing at those pro­grams, age of eligibility…

Biden: Absolute­ly.

And Biden’s advo­ca­cy of Social Secu­ri­ty cuts hasn’t just been the­o­ret­i­cal. As David Dayen lays out, it’s had real con­se­quences by pop­u­lar­iz­ing the regres­sive chained CPI” approach to cal­cu­lat­ing benefits.

To sup­port his argu­ment, Krug­man links to a piece from Poli­ti­Fact, which has its own his­to­ry of man­gled eco­nom­ic analy­sis, accord­ing to no less than Paul Krug­man!

PolitiFact’s argu­ment is that Biden was aim­ing to pro­tect the pro­gram,” which, as not­ed above, is the time-hon­ored excuse for aus­ter­i­ty of all types. So, Krug­man is wrong to affirm that Sanders lied about Biden’s sup­port for ben­e­fit cuts, and dis­hon­est to imply that the Brook­ings speech is a deci­sive refu­ta­tion of that charge.

In sum­ma­ry, there should be no doubt that Joe Biden has long advo­cat­ed cuts to Social Secu­ri­ty. So have many oth­er Demo­c­ra­t­ic Par­ty lead­ers, but, as they say, the times they are a‑changin’. Biden is now sup­port­ing ben­e­fit increas­es. Again, in a spir­it of comi­ty, we should wel­come all converts.

Krug­man mis­led his read­ers by call­ing Sanders a liar on this issue. Going for­ward, the appli­ca­tion of the lib­er­al commentator’s for­mi­da­ble pow­ers of eco­nom­ic analy­sis upon Sanders’ pro­pos­als should be received with circumspection.

Thank­ful­ly, Social Secu­ri­ty appears to cur­rent­ly be out of the dan­ger zone. But it will always be vul­ner­a­ble due to delu­sions about the long-run dan­gers of bud­get deficits, and politi­cians will­ing to describe ben­e­fit cuts as mea­sures to save the pro­gram. We shouldn’t buy it.

Max B. Saw­icky is an econ­o­mist and writer based in Vir­ginia. He pre­vi­ous­ly worked for 18 years at the Eco­nom­ic Pol­i­cy Insti­tute in Wash­ing­ton, D.C.
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