Barack Obama on Social Security

Last Updated : Sep 04, 2012

Summary

President Obama has remained consistent in his views that overall social security is fiscally sound with the exception of the actuarial anomoly caused by the baby boomers. To address this problem, President Obama supports removing the payroll tax cap for anyone earning more than $250,000. He has remained opposed to any form of privatization. Under Presdient Obama, the structure of the Social Security system has changed significantly by altering the system from one that did not take in funds from the general tax fund to one that does.

2008 Presidential Election

Social security was not a particularly hot topic during the 2008 election, especially after the economic crash. However, there were a large number of debates and forums in which Senator Obama and Senator Clinton addressed the issue. Throughout these debates and forums, President Obama's was consistent in his view that social security should not be privatized. He asserted that privatizing the system would open it up to the wil ups and downs of the stock market. He stated that while playing the stock market would allow for some people to increase their savings through playing the market well, some people would inevitably lose their savings in the market and the US would still have to pay for those people.

Another consistent view of President Obama is that social security is not in financial trouble, but needs to be slightly altered to address the large number of people retiring the coming years. To address this problem, Senator Obama stated early in the election that all options should be on the table. As the election progressed, his view to address the problem coalesced to raising the payroll tax cap. To prevent this increase from affecting middle class people, he proposed removing the cap only for those making more than $250,000 a year.

This plan to remove the cap would also change the social security system. The cap is in place because social security was enacted as a system in which each person pays into the system and receives that money back when they retire. The cap represents the highest amount that a person can pay into the system and still receive that money back. Removing the cap would alter that system where some people are required to pay in money that they can never receive back.

Payroll Tax Cuts

Social Security is funded through a payroll tax. This tax consists of the employee and the employer each paying 6.4% of the employees income into the social security trust fund. Under President Obama, a payroll tax cut was implemented that reduced the employee side of the tax down to 4.2%. The revenue lost from the reduction of this tax has been made up by taking an amount of funds equivalent to those lost from the general revenue fund. Thus the social security system has been changed under President Obama from one that in entirely self contained, generating its own revenue and paying out funds from those revenues, into one that is funded in part through general revenue taxes.

2012 Presidential Election

President Obama does not address Social Security as part of his economic plan or within his campaign website except to state that the system is sound and that he will continue to protect it.

 

The Audacity of Hope

In his memoirs, The Audacity of Hope, Senator Obama discussed why he opposed privatization of social security. He referred to the philosophy of social security as one where we are all in it together while the Bush privatization scheme is a "you're on your own" mentality. He states that while the stock market produces higher gains for those who invest well, in a privatization scheme there are those who invest poorly and loose their own money. He asks what would we do with those people.

 

Facebook debate

The facebook debate took place on January 6, 2006. In that debate, Senator Obama stated that to address social security, we needed to raise the payroll tax. He used the example of Warren Buffett to show that there were people who were capable of paying more into the system.

 

Youtube debate

The youtube debate took place on July 23, 2007. When asked about what to do with social security, Senator Obama stated that raising the payroll tax cap was an option that needed to remain on the table. He also cautioned that the system must not be privatized.

 

Dartmouth debate

The Dartmouth debate took place on September 6, 2007. He was again asked about raising the payroll tax cap and stated that this was the best option.

 

Drexel Debate

On October 30, 2007, Senator Obama took part in a debate in a debate at Drexel University. He asserted that social security was not in crisis, but was fundamentally sound. He did note that there was an actuarial problem in the coming years with the baby boomers retiring and stated that raising the salary cap was the best option.

 

Meet the Press

In a meet the press interview on November 11, 2007, Senator Obama was asked about previous statements regarding raising the retirement age. He states that he would not now support raising the retirement age or cutting benefits.

 

Des Moines Register Interview

In December 2007, Senator Obama gave an interview for the Des Moines register and discussed social security.  He again stated that social security was not in a crisis.

 

Stephanopoulos Interview

In January on 2008, Senator Obama gave an interview to George Stephanopoulos and spoke about social security.  Senator Obama noted that everything should be on the table to deal with the issue of social security with the exception of privatization of the system.  This contradicts both the notion that there is a no problem with social security and the previous statements that he opposed raising the retirement age.

  

Philadelphia primary debate

In the Philadelphia primary debate, which was held on April 16, 2008, Senator Obama again reaffirmed removing the cap on those making over $250,000.

 

 

Fox Interview - Presidential Series

In an interview on Fox on April 27, 2008, Senator Obama reasserted his desire to raise the cap on social security taxes.

 

Columbus Townhall

In June of 2008, Senator Obama gave a speech at a town hall in Columbus Ohio. In that speech, he discusses his opposition to privatizing social security. He also notes the actuarial problems created by the baby boomers and the need to raise the payroll tax cap to address the system.

 

Blueprint for Social Security

During the 2008 election, Senator Obama made a series of campaign videos called "blueprints" that outlined his plans for various items. In the one for social security, Senator Obama gave a summary of his views on social security and outlined them in bullets.  In the audio, Senator Obama states that he favors removing the cap on those earning more than $250,000, and that he opposes reducing benefits or increasing the retirement age.  He also begins to promote the automative workplace enrollment pension.

  • Protect Social Securityrn
    • Adjust payroll tax for earnings above $250,000
    • No change in taxes for 97% of Americans
    • Extend social security without cutting benefits or raising the retirement age
    • Eliminate income tax for retirees earning less than $50,000rn
      • Completely eliminate income taxes for 7 million seniors
  • Secure hard earned pensionsrn
    • worker pensions a top priority in company bankruptcy
    • increase worker wages and benefits during bankruptcy
    • companies must disclose pension fund investments
    • no golden parachutes for executive during bankruptcy
    • eliminate bankruptcy for medical debt
  • Help Americans save morern
    • Automatic workplace pensions
    • No red tape or complicated forms
    • opt out at any time

 

Blueprint for Fiscal Discipline

As part of the blueprint for fiscal discipline, Senator Obama noted that he would not privatize social security, not raise the retirement age, and pay for social security by "getting the wealthiest Americans to pay their share."

 

2008 Campaign Website

Senator Obama's official campaign website re-iterated his opposition to the privatization of social security and removing the payroll cap on those making more that $250,000. 

 

        

The origins of social security

In December of 2010, President Obama was answering questions about a tax compromise and the health care reform. In defending his compromises, President Obama attempted to assert that most programs start small and eventually expand. In doing so, he cited social security and stated that the program started as one for orphans and widows. This is not true, and is the exact opposite of the program's original purpose to reimburse those who paid in throughout time.

 

Continued Opposition to Privatization

In August of 2010, President Obama used his weekly address to restate his opposition to the possibility of privatizing social security.

 

Voting Record

Amendment - Social Security Reserve Fund

In 2007, congress attempted to pass an amendment to create a reserve fund for social security. This action was prompted by the increasing awareness that the Social Security program may not be financially solvent in the near future. Opponents claimed that the move was an end-around method to privatize social security. The amendment was largely supported by Republicans and largely opposed by Democrats. The amendment failed in a 45-52 vote. Barack Obama voted against the amendment to create a reserve fund for social security.

Barack Obama voted against the amendment to create a reserve fund for social security.

 

Sponsored and Cosponsored Legislation

Session-110; Bill Number-S 206; Social Security Fairness Act of 2007 - Cosponsor

A bill to amend title II of the Social Security Act to repeal the Government pension offset and windfall elimination provisions.

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