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THE MUSINGS OF A TRADITIONAL SOUTHERN DEMOCRAT

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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Monday, April 06, 2015

Democrats Rethink Social Security Strategy - Shift from fighting cutbacks to boosting benefits could challenge a Clinton candidacy

From The Wall Street Journal:

For years, liberal Democrats have fought against proposals to cut Social Security benefits. Now, they’re pushing the party not just to defend benefits but to increase them, and that could present a problem for Hillary Clinton.

The call for higher benefits is a marked difference from recent years in which the White House and Republicans were negotiating deficit-cutting deals, leaving liberals to argue merely for staving off benefit cutbacks. Separately, many experts in both parties have long argued that extending the solvency of the program would require a combination of benefit cuts and tax increases.

The liberals’ argument is that Social Security benefits are meager and that people in retirement need more, not less, money. Some also contend that concerns about the program’s solvency are exaggerated. And inside the Democratic Party, that argument is gaining traction. Legislation increasing benefits, and boosting payroll taxes to cover the cost, now has 58 co-sponsors in the House.

But there could be a conflict between this sentiment and the heavy favorite for the party’s 2016 presidential nomination. When Mrs. Clinton last weighed in on Social Security, she supported a bipartisan commission to tackle the program’s long-term financial imbalance. The widespread view was that such a commission would lead to a compromise in which Democrats support benefit cuts in return for Republican support for a tax increase, all to extend the life of the program.

Social Security, the long-cherished retirement income program, suffers from a demographic imbalance, with an increasing number of retirees collecting benefits and a decreasing number of workers paying taxes to support them. The program’s trustees project that, without changes, reserves will run out by 2033, at which point the program would be able to pay only about 77% of promised benefits.

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