When August’s debt limit deal created the bipartisan
deficit-reduction committee, it also created one of the most
powerful legislative tools Washington has ever seen — subject to
neither amendment nor filibuster.
To say this would make it easy to reform Social Security
would be naïve. Still, it would be an oversight not to recognize
the unprecedented opportunity this presents.
The 12-member bipartisan congressional committee faces a
tough job: achieving a deficit-reduction of “at least $1.5
trillion” in 2012-2021 in addition to the $917 billion in annual
spending savings already mandated separately.
The deal’s bipartisan congressional deficit reduction
committee and its accompanying legislation closely tracks
procedures in Washington’s normal budget process, as laid out in
the 1974 Budget Act. One aspect of that earlier legislation in
particular stands out: reconciliation.
Under reconciliation, committees are assigned
deficit-reduction targets and the resulting legislation is
protected — almost exactly as in the case of today’s bipartisan
committee and its legislative product. Reconciliation is therefore
among Congress’s most powerful legislative tools. There are
expedited rules for its consideration and the Senate needs just a
simple majority vote (filibusters are prohibited) to pass it —
just like the bipartisan committee’s product.
However, in two crucial aspects, the bipartisan
committee’s mandate is more powerful. Under reconciliation,
amendments are still allowed and Social Security cannot be touched:
“[I]t shall not be in order in the Senate or the House of
Representatives to consider any reconciliation bill… that contains
recommendations with respect to… Social Security…”
While Congress’s most powerful existing deficit reduction
tool can’t reform Social Security, no such limitation exists on the
bipartisan committee’s untouchable product. Unlike any other
legislation, the committee’s product could reform Social Security
with simple majority votes in both bodies.
That Social Security is in need of reform is without
question. As the Congressional Budget Office points out, last
year’s Social Security spending equaled 4.9 percent of GDP and will
grow to 6.1 percent in 2035. In 2037, its trust funds will be
depleted. To make ends meet, it requires an immediate and
continuing 1.6 percentage point increase in the payroll tax or a 19
percent reduction in benefits in 2038.
The bipartisan committee’s short timeline for
decision-making makes long debates difficult. However, unlike other
programs, Social Security’s inherent problems — basically,
pay-as-you-go dependency unmasked by deteriorating demographics —
are quite clear.
Earlier this year, CBO published a book of deficit
reduction options containing six proposals that would save Social
Security $652.3 billion over 2012-2021 — roughly half of the
committee’s mandate. Nor did CBO leave out those who believe
additional revenues are the route for deficit reduction: CBO also
included two Social Security options for increasing revenues by
$552.7 billion during 2012-2021.
The committee therefore could still have its debate over
spending cuts versus revenue increases, but in a more meaningful
context of serious and specific program reform.
Unquestionably Social Security needs reform. The
bipartisan committee presents an unequalled opportunity for doing
so and Social Security’s long-known reform options meet the
committee’s time constraints for decision-making.
By tackling entitlements — particularly the oldest
program — rather than the continued pursuit of
annually-appropriated spending, it would immediately show
Washington meant business.
Finally, it would also prove that deficit reduction is not
just a temporary exercise, but a permanent policy change toward
fiscal sustainability. Social Security reform’s deficit reduction
in the first decade, while sizeable, would be dwarfed over the
long-term — when Washington’s deficit is projected to be even
worse.
Congress’s bipartisan deficit reduction committee has the
means for reform and Social Security has the need. The only
question is whether Washington has the will.
