The Winning Card: Obama and Democrats Need Social Security and Medicare

There's a lot of post-debate analysis going on -- some would say too much -- but not enough is being said about the ace in the Democrats' deck: defending Social Security and Medicare. That's not just a winning card for the candidates who play it.Seniors, young people, the disabled, the jobless: Everybody at the table wins.

Everybody, that is, except the Republican in the race.

So why didn't the President play this winning card last night? Why aren't more Democrats using it? It's as if they've all signed a secret pledge to appear fair and reasonable - by not admitting they hold a better hand.

One-Sided Argument

Jim Lehrer asked the President, "Do you see a major difference between the two of you on Social Security?" The answer: "You know, I suspect that on Social Security, we’ve got a somewhat similar position. Social Security is structurally sound. It’s going to have to be tweaked the way it was by Ronald Reagan and Speaker -- Democratic Speaker Tip O’Neill. But the basic structure is sound."

The President didn't mention the deeply unpopular Republican attempt to privatize Social Security, which was spearheaded by Romney's running mate and would have led to financial catastrophe for millions of people after the 2008 crisis. (Which, he might have added, was created by financiers not unlike Mitt Romney.)

The Reagan/O'Neill mention was also significant. It's been clear for a long time that the President almost venerates the Social Security agreement those two leaders made in the 1980s. But that agreement was striking because Reagan and O'Neill shared a characteristic which both the President and Mr. Romney lack: They were passionate and eloquent voices for their political philosophies.

The agreement between O'Neill and Reagan was remarkable, not because they weren't "ideological" (a word which has been unfairly tarnished in today's Washington) but because they were.

You can't "rise above your differences" if you don't express those differences.

Fair, Smart, Popular

More importantly, back then the program really was in crisis. Today's funding concerns are long-term and will only become problematic in the late 2030s. That's no reason not to act immediately, of course, and we should. Fortunately there are immediate solutions available which are both practical and popular.

The most effective solution is to lift the payroll tax cap, which currently stops collecting for Social Security at roughly $110,000 in income, or to offer a 'window' and begin collecting for it again at $250,000 in income or a similar figure. (Sen. Bernie Sanders has proposed a bill along these lines.)

This would be both effective and eminently fair, since economists like L. Josh Bivens have shown that these long-term shortfalls were caused in large part by a radical shift in our national earnings that has favored the "1 percent" - and has favored the "0.01 percent" even more.

The other practical solution is equally fair: A very low tax on financial transactions could make up any remaining shortfall. Social Security's revenues have also taken a hit from the unemployment caused by Wall Street misbehavior, so this solution is also fair. (This tax would also have the side benefit of discouraging high-speed, high-volume computerized trading, which is dangerous and non-productive.)

Out of Commission

So why didn't the President bring it up? Both his 2008 and 2012 campaign comments have included the idea of lifting the payroll tax cap. But as soon as he was elected he appointed the now-notorious "Simpson/Bowles Deficit Commission," which deadlocked and failed to reach an agreement. Social Security was included in its mandate, even though it doesn't contribute to the deficit, and even though both Simpson and Bowles were on record in favor of cutting its benefits.

In another failure to draw distinctions, both the President and Romney had kind words for the private proposal these two gentlemen issued after their commission failed to issue a report. Why? Perhaps the President genuinely believes these cuts - which he described as "tweaks" - are necessary.

But that position is both unpopular and economically unsound one. And for the seniors, disabled, and children on Social Security, those "tweaks" would actually be a hard blow [1]. Obama's campaign advisors, and his fellow Democratic candidates, should demand that he instead join with Vice President Joe Biden and "flat guarantee [2]" that there will be no benefit cuts to either Social Security and Medicare.

Democrats have already squandered an political advantage on Social Security once before, according to polling data, in large part because of both parties' inside-the-Beltway fascination with Simpson Bowles-style austerity:

Dems led Republicans by 25 points after the GOP's disastrous privatization attempt, but had squandered it and let the Republicans gain a slight (and very undeserved) lead by the time the 2010 election rolled around. Republicans were able to run against the Democrats with a fraudulent "Seniors' Bill of Rights" that year. And they retook the House.

As for the supposedly "bipartisan" team of Republican Alan Simpson and Democrat Erskine Bowles, here's all you really need to know: They just endorsed [3] a Tea Party Congressional candidate in New Hampshire over a progressive Democrat who's pledged to fight any benefit cuts.

When Dems give lip service to the Simpson Bowles plan, they're "riding with Dick Armey."

Voucherize This

The President was almost diffident in the face of Romney's repeated Medicare lies. He did bring up the Romney/Ryan Medicare voucher plan, which was smart. But he immediately did his opponent's work for him, too, by offering a rebuttal to his own words: "Now, in fairness, what Governor Romney has now said is he’ll maintain traditional Medicare alongside it."

Let's have a show of hands: How many people believe Romney and Ryan will really preserve traditional Medicare if elected?

Obama then launched into a very accurate description of the problem health economists describe as "adverse selection." That's one of key economic issues, but if it isn't one of your, you probably think it's boring as hell. I doubt that one voter in 1,000 was really listening to Obama's exposition. (Even I was tweeting [4] like crazy by that point. We all have our coping mechanisms ..)

The Simpson/Bowles plan would inevitably lead to benefit cuts for Medicare as well. It doesn't address the real driver behind Medicare's cost problems, one that neither candidate has raised: our for-profit health care system, which encourages needless and dangerous overtreatment, drives physicians into high-cost specialties while leaving other critical ones understaffed, and spikes up prices for everything from drugs to diagnostics.

That's a shame, because the President could also have pointed out that Romney's own business model at Bain Capital has encouraged [5] exactly the kinds of fraud and patient abuse that are sending our health care costs through the roof - and are the real root cause of our country's long-term deficits.

Battleground: Senior America

Polling data continues to show that benefit cuts are unpopular [6] across the political spectrum. Even two-thirds of self-described Tea Party members oppose them. Democratic advisors may be pointing candidates toward key words like "significant" to describe those cuts, which is why the President and so many others lean toward using words like "tweak." But those "tweaks" are actually significant (see above) - and unpopular - benefit cuts.

But the electorate is very supportive of higher taxes on the wealthy, so the most practical solution would also be the most politically savvy one.

And when it comes to battleground states, these issues don't just affect Florida. Many battleground states have high percentages of senior voters. Seniors are 17.3 percent of the electorage in Florida, but they're also 15.4 percent in Pennsylvania, 14.1 percent in Ohio, 13.7 percent in South Carolina ... the list goes on and on.

What's more, Ohio voters are even more supportive [7] of Social Security than the country as a whole, which likes the program very, very much. Sure, the President has a commanding lead there at the moment. But is it a good idea to endanger that lead?

Here's a campaign slogan to consider: "No senior left behind."

The Real Generational War

Then there are youth voters, a critical Democratic voting bloc that has lost a lot of enthusiasm [8] for this race. While people think of Medicare as an "older person's issue," Obama missed a chance to present himself as a youth advocate. Romney said "neither the president nor I are proposing any changes for any current retirees or near retirees, either to Social Security or Medicare. So if you’re 60 or around 60 or older, you don’t need to listen any further. But for younger people we need to talk ..."

Obama could have used that moment to point out that these benefit cut proposals, which increase over time, are the real "generational war" in today's politics. These cuts - excuse me, "tweaks" - would make young people pay the price for today's lack of political resolve on these programs.

Democrats can position themselves as youth's champions, too, by fighting benefit cuts that unfairly target a generation whose long-term financial security has already been battered by unemployment.

You Gotta Know When to Hold 'Em ...

But time is growing short. Last night's debate further weakened the Democrats' position on these key political issues. Who'll tell them that? Who can convince the President - and other Democrats, like Minority Leader Pelosi - that Simpson/Bowles is policy puffery and political poison, that benefit cuts are unnecessary, unwise, and unpopular?

To be sure, there are some heroes out there. Bernie Sanders' Social Security bill created an ironic situation: The Senate's only socialist was also its strongest spokesperson for the views of most Republicans.

Harry Reid's been a stalwart defender of Social Security, no doubt against tremendous pressure. That makes him a hero in my book. Joe Biden's "flat guarantee" promise was terrific, and should be followed by a signed pledge from his fellow party members - from the President ond own.

The Dems are still holding that ace, and when it comes to these programs all the Republicans have up their sleeve is the Joker. (I mean the card, not the psychopathic archvillain from Batman - but, hey: If the shoe fits, wear it.)

But you can't beat the other guy, with the best hand in the house, unless you play it. Word to the Democrats: It's time to lay your cards on the table. It's time to fight for Social Security and Medicare - no cuts, at no time, no how.