Heads-Up !!! - 'Orszag Coming for Your Social Security' - FDL

The most important area for spending restraint is entitlement reform. Democrats should offer changes to the system that would save hundreds of billions of dollars while preserving the safety net for our neediest. For instance, we could introduce “progressive indexation,” which would provide lower cost-of-living increases for more affluent Social Security recipients, or devise a more accurate measure of inflation’s effects on all recipients’ income.

Social Security is not the nation’s key long-term fiscal problem — health care is. (A column in Thursday’s Times will discuss health care.) But Social Security does face a long-term deficit, and a variety of reasonable reform plans (including one I wrote with Peter Diamond, a winner of this year’s Nobel Prize in Economics) have been proposed to address that deficit.

The left, though, seems adamantly opposed to restoring actuarial balance to Social Security now. I have trouble understanding this reluctance for several reasons: the key issue progressives had been concerned about — individual accounts within Social Security — has been definitively won in their favor (for now); they have a president from their party in office, which will not always be the case; acting now would allow changes to take effect more gradually, cushioning the blow; and establishing some credibility on out-year fiscal problems by enacting Social Security reform could open up (admittedly limited) running room to pass necessary additional stimulus legislation in the short run.