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The Bernie-Biden clash over Social Security, explained

The potential return of the “grand bargain” on budgetary balance.

Sanders and Biden. Al Diaz/Miami Herald/Tribune News Service via Getty Images

Social Security hasn’t been at the top of the American political agenda for years, but Bernie Sanders is putting it back — to take on Joe Biden.

Sanders’s camp heavily previewed the argument that Biden has a worrying track record of pushing for Social Security cuts before the most recent Democratic debate, but then whiffed, leaving Biden largely uncriticized as Sanders instead got pulled into a dispute with Elizabeth Warren.

Then, over the weekend, David Sirota, a Sanders adviser known for his attack-dog persona, wrote in a campaign email that “Biden for years has tried to slash Social Security and Medicare — all while Bernie was working to stop those cuts.” He included a ream of supporting links, including one to a video of a 2018 Biden event that Sirota said showed Biden “lauded Paul Ryan for proposing cuts to Social Security and Medicare.”

Biden’s campaign pushed back ferociously, accusing Sanders’s allies of circulating a “doctored” video and demanding an apology.

Sirota’s characterization of that specific video is wrong, though so is the charge that it was “doctored.” And the overall characterization of Biden’s record doesn’t appropriately capture the full context of what was going on.

But on the core point, the video misstep has allowed Biden’s camp to try to avoid confronting the facts.

For the vast majority of his career, Biden has been a deficit hawk who’s willing to sacrifice Social Security and Medicare benefits for the sake of achieving smaller budget gaps. He’s even bragged about it to establish a rhetorical contrast with Republican fiscal irresponsibility. And unlike some Biden-related controversies, this isn’t ancient history. It’s a position Biden maintained as Barack Obama’s vice president — and that Sanders and Warren fought against.

Consequently, behind the fog of fact checks is a real question about electability in a world where even the GOP’s leader has mostly abandoned the idea of scaling back retirement programs.

But even more profoundly, the argument reveals a question about governance, one that frames the actual choices available differently than the typical “revolution versus pragmatism” argument that’s dominated the Democratic campaign so far: What kinds of concessions should or would the next president make in order to advance other priorities?

The tale of the tape

Sirota’s claim that Biden “lauded Paul Ryan” links to a column by the Week’s Ryan Cooper published about a year ago. Cooper was running with an interpretation of a 2018 Biden speech at the Brookings Institution that was first offered by Sirota himself and flagged as misleading by Ben Cohen.

The text of what Biden said is a bit ambiguous, and to understand what’s happening, you probably need to watch it on video. But here is a selection of the transcript that puts his remarks in context, with the key line Sirota is quoting in bold:

As I say where I come from, get a life. Look what’s happened with the latest tax cut. Once again those at the very top get the biggest breaks and what do we have to show for it? Even our Republican friends are now beginning to admit there’s no evidence these tax cuts are being put to work in the economy. No new growth, just more debt. And that puts middle class programs that they rely on and they’ve worked for at real risk.

Paul Ryan was correct when he did the tax code. What’s the first thing he decided we had to go after? Social Security and Medicare. Now, we need to do something about Social Security and Medicare. That’s the only way you can find room to pay for it.

Now, I don’t know a whole lot of people in the top one-tenth of 1 percent or the top 1 percent who are relying on Social Security when they retire. I don’t know a lot of them. Maybe you guys do. So we need a pro-growth, progressive tax code that treats workers as job creators, as well, not just investors; that gets rid of unprotective loopholes like stepped-up basis; and it raises enough revenue to make sure that the Social Security and Medicare can stay, it still needs adjustments, but can stay; and pay for the things we all acknowledge will grow the country.

If you watch the video, Biden is saying that stuff about Social Security and Medicare in a funny affected voice. It’s supposed to be satirizing Paul Ryan’s view — the view that first you do a regressive tax cut that makes the budget deficit bigger and then later you come around to cut Social Security and Medicare.

Biden isn’t calling for Social Security cuts, and he certainly isn’t lauding Ryan.

He’s saying that Ryan’s preferred tax policies — policies that Biden opposed — will lead inevitably to cuts in popular retirement programs. This is close to the reverse of the view Sirota attributes to him. Which is odd, because Biden really has advocated cuts to Social Security on various occasions over the years.

Joe Biden is a longtime deficit hawk

The connective tissue between the times Biden has proposed Social Security cuts and the time Biden criticized Ryan is that for most of his career, Biden has taken the view that a large budget deficit is bad (he signed on to a balanced budget amendment proposal way back in 1995, for example).

The core problem with Social Security, to deficit hawks, is that for various reasons, the long-term projected revenue raised by Social Security taxes will not be sufficient to cover the benefits that have been promised over the long term. While Republicans have at times tried to use this imbalance as a pretext to privatize the program, mainstream Democrats have been more likely to see it as a problem that needs to be fixed with a mix of higher taxes and lower spending.

For illustrative examples of what that might look like, you can delve into a 2005 blueprint released by Peter Diamond (whom Obama later tried to appoint to a Federal Reserve Board seat) and Peter Orszag (who served as Obama’s Office of Management and Budget director for years) or a 2010 plan that the Obama-aligned Center for American Progress think tank put out.

In this vein, the same Sirota email that was misleading about Biden’s 2018 speech accurately flagged a Biden retirement security plan from his 2008 campaign that floated the idea of raising the retirement age. Specifically, asked by Tim Russert during that campaign if he was open to cutting Social Security and Medicare, he said “you’ve got to put all of it on the table.”

The larger context here is that when George W. Bush was president, Democrats routinely assailed him for running up a high budget deficit and frequently forecast dire consequences to come if it was not addressed. And one thing you have to understand to make sense of Obama’s first term in office is that mainstream Democrats were completely sincere about this. As Columbia University’s Adam Tooze writes in Crashed, his history of the Great Recession, Obama and his team were already prepared for an economic crisis before it arrived. The problem is they were prepared for “the wrong crisis” — a crisis of confidence in the US dollar and soaring interest rates provoked by Bush’s irresponsible fiscal policy.

In his book The Audacity of Hope, Obama writes that “solving America’s problems will be hard. It will require tough choices, and it will require sacrifice. Unless political leaders are open to new ideas and not just new packaging, we won’t change enough hearts and minds to initiate a serious energy policy or tame the deficit.”

At another point, he observes that “the problems with the Social Security trust fund are real but manageable. In 1983, when facing a similar problem, Ronald Reagan and House Speaker Tip O’Neill got together and shaped a bipartisan plan that stabilized the system for the next sixty years. There’s no reason we can’t do the same today.”

The Reagan-O’Neill plan was a balanced package of tax hikes and benefit cuts, exactly what the Diamond-Orszag plan featured, and what Biden meant when he said “you’ve got to put all of it on the table,” and exactly what Obama meant when he said we would need “tough choices” and “sacrifice.”

The underlying presumption of this is that the deficit was a major long-term problem, comparable to climate change. And that's a view that persisted into Obama’s administration even though he wound up getting the wrong crisis.

The Grand Bargain era

By the time Obama took office, it was clear that Democratic Party deficit hawks had been preparing for the wrong crisis. During the financial crisis that precipitated the Great Recession, the value of the dollar went up, not down, and interest rates went down rather than up. And all this happened even though the recession itself automatically pushed the deficit up quite a bit.

The administration responded, sensibly, with a stimulus package that made the deficit even larger.

But once the stimulus was enacted — and especially after getting beaten badly in the 2010 midterms — the administration pivoted back to the deficit question, even though it had no immediate urgency.

This eventually took the form of a search for a “grand bargain” between the administration and House Republicans, one that would pair tax increases with cuts to long-term spending on entitlement programs. Initially the hope was that a grand bargain would be reached as part of a deal to raise the statutory debt ceiling.

That failed, and instead the debt ceiling was raised but paired with big automatic short-term cuts to discretionary spending on both military and non-military spending. The idea was that ultimately both Democrats and Republicans would prefer a grand bargain on long-term issues to economically harmful short-term cuts, and so would reach the bargain in order to avert them. That effort failed, too. Last but by no means least was the “fiscal cliff” occurring shortly after Obama won reelection, when the White House tried and failed to get House Republicans to agree to a deal that would raise taxes and cut long-term spending.

In all these cases, cuts to Social Security — typically either raising the age at which one could claim full benefits, switching the cost of living adjustments to a less generous measure of inflation, or both — were, broadly speaking, on the table. And in all cases, the Obama administration, Biden included, was very much hoping for a deal. The reason Social Security and Medicare left the Obama years untouched was fundamentally that Republicans didn’t want to make a deal. Rather than raising taxes and cutting entitlements, their idea, outlined in multiple budget documents written by Paul Ryan, was to cut taxes as well as entitlement spending.

Meanwhile, a dissident faction of left-wing Democrats, led by Sanders and Warren, said this was a bad idea, that the search for a grand bargain was misguided, and that Social Security should be expanded rather than cut. This group was not influential during the search for a grand bargain — had a deal been reached, it simply would have passed without their votes — but, in part due to Republican intransigence, they wound up winning the argument.

Lots of people have changed their position

Bernie Sanders has the same position on Social Security in 2020 that he had in 2011 — it should be expanded. Elizabeth Warren, too, is a longtime champion of expanding Social Security, and for the 2020 campaign she outlined a Social Security expansion plan that is even more generous than the one Sanders has embraced.

Most other leading figures in American politics, however, have shifted positions — generally to the left of where they were five to 10 years ago.

The shifts were, to an extent, gradual. In early 2014, Obama released a budget proposal that, unlike the ones from his previous few years, no longer included the idea of cutting Social Security by switching to the less generous inflation index. Then in June 2016, Obama came out in favor of expanding Social Security benefits. Biden seems to have broadly tracked Obama’s thinking.

In his 2018 Brookings speech, he’s not talking about doing a grand bargain; he’s complaining that GOP tax cuts are imperiling Social Security. And in the summer of 2019, he fleshed out his Social Security expansion proposal.

Meanwhile, Donald Trump won the 2016 election, but he also ruined the GOP establishment’s plan to cut entitlements without a grand bargain. Trump as a candidate vowed to avoid cuts to Social Security, Medicare, and Medicaid.

As president, he has flagrantly violated those promises on Medicaid, backing bills that would have enacted sweeping cuts and doing everything in his power to use executive discretion to toss people off the program. Trump’s budget director and chief of staff Mick Mulvaney, meanwhile, has bragged about talking Trump into supporting cuts to parts of Social Security by convincing him that Social Security Disability Insurance isn’t really Social Security (the name is a hint that it is), and his promise really only covered old-age benefits. But Trump really has avoided cuts in benefits for retirees, which helped give him a moderate image with a critical swath of voters and has changed the basic pattern of American political arguments.

One important consequence of this is that Mitch McConnell — who helped kill the grand bargain when Obama and Biden wanted one — now says he wants a bipartisan deal to “adjust those programs” and reduce the deficit.

This sets up an important question of what will happen if Trump loses in 2020.

Joe Biden wants to get things done

If you view the whole history of their respective records in context, the Sanders camp is going too far in trying to pitch Biden as some kind of fanatical Social Security slasher.

Biden did for a long time buy into the idea that it was critically important to try to reach a bipartisan deal on deficit reduction, even if such a deal entailed significant cuts to Social Security and Medicare. Sanders and Warren, by contrast, always opposed such dealmaking. At the end of the day, it turned out not to matter, because Republicans weren’t interested. But unlike many of the other domestic issues that candidates have argued about in the 2020 cycle, the gap here has real implications.

There are at least some indications that McConnell and other GOP leaders may have changed their minds on a deficit deal. And while nobody running for office is going to discuss in detail the specific outlines of unsavory compromises they might be willing to make with a GOP legislative majority, the candidates’ records indicate that if McConnell were interested in making a deal, Biden would be a lot more willing than Sanders to give up Social Security cuts if he could get something in exchange that he thought was important.

Biden has mused sporadically about the possibility of a post-election “epiphany” that would restore bipartisan cooperation to Washington, generally only to be met with derision.

But while an epiphany almost certainly isn’t in the cards, it’s not out of the question that post-Trump congressional Republicans would decide that they were too intransigent on the specific grand bargain question and want to make a deal with a Biden administration. A Warren or Sanders administration would almost certainly reject any such overtures, whereas Biden — like Obama before him — might see concessions on Social Security as a potentially viable way of moving the ball forward on other priorities.

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