Obama’s new director of Office and Management and Budget, Peter Orszag, is one of the administration’s chief proponents of the idea that it’s wrong to think of Social Security as in “crisis,” because its problems can fixed with a few relatively minor tweaks. Instead, Orszag argues that country’s fiscal woes are primarily the result of exploding health-care costs, and that our top fiscal priority ought to be controlling those outlays.
There’s a lot to this idea — health-care costs are projected to expand dramatically, and Social Security costs look likely to level off — but over at The Plank, Josh Patashnik offers one of the better rebuttals to Orszag’s line of thinking:
I’ve never understood the argument that simply because their growth rates are close to zero they shouldn’t be part of the conversation. If you thought one part of your household budget were going to expand dramatically, wouldn’t you want to look for savings everywhere, rather than betting (probably unrealistically) that you can get the one offending budgetary item entirely under control?
President Obama’s laudable decision to move to honest budgetary reporting underscored the basic reality that, gimmicks aside, all federal revenue effectively goes into one big pot, and all federal outlays come out of it. Ultimately, we’ve got to decide where we want that last marginal dollar of federal spending to go. It’s true that Social Security, viewed in isolation, doesn’t have a major solvency problem—but why would you view Social Security in isolation? Of course it nominally has its own revenue stream, but the whole point here is that there are tradeoffs: dedicating that money to Social Security (or defense, or infrastructure, or anything else) means there’s less to spend in other areas. Those who advocate no changes to Social Security have to do more than point out that there’s no funding crisis; they need to make an affirmative case for why sending Social Security checks to future affluent retirees is a better use of that money than funding more expensive-but-livesaving health treatments, or child anti-poverty programs, or keeping future marginal tax rates to manageable levels, or anything else.
Orszag’s approach basically assumes there are no substantial inefficiencies in Social Security, no room to make the program all that much leaner, nothing to do with it except tinker at the margins. It implicitly suggests that not only is there no room to reconsider what Social Security does — provide Americans with a relatively safe retirement cushion — but that there’s no place for rethinking how the program accomplishes its goals.