During the Democratic presidential debate in Philadelphia Tuesday night, there was pressure on New York Sen. Hillary Clinton from all sides. Clinton answered challenges from her Democratic rivals for her views on Iraq, Iran, free trade, illegal immigrants — and Social Security, which is emerging as a hot issue among both Democrats and Republicans.
Prior to Tuesday night's debate, Barack Obama had complained that Hillary Clinton was not offering specific solutions for fixing Social Security's financial problems. Obama, campaigning in Iowa over the weekend, said that on an issue as fundamental as Social Security, "a candidate for president owes it to the American people to tell us where they stand."
Obama has offered a specific proposal. He says he would tax the wealthy to close Social Security's long-term funding gap. Currently, annual incomes over $97,500 are not subject to Social Security payroll taxes. Obama says he would impose the tax on all incomes over $200,000, a move that could significantly improve Social Security's financial picture.
A number of other Democratic presidential hopefuls support this option. Clinton, however, has refused to be pinned down in public. But recently an Associated Press reporter overheard Clinton tell an Iowa voter in a private conversation that she would consider taxing incomes over $200,000 to fix Social Security.
Last night, moderator Tim Russert of NBC confronted Clinton on the subject. He asked Clinton why she had one position in public and another in private. Clinton claimed she didn't.
"I have said consistently that my plan for Social Security is fiscal responsibility first," she told Russert. She went on to say that to deal with any long-term challenges, she would set up a bipartisan commission.
Clinton argued the first step toward a solution is a return to balanced budgets and surpluses so the country has the resources to fix Social Security the right way. Getting into a campaign argument now over raising taxes or cutting benefits, she said, would be falling into a Republican trap.
"I am not going to be repeating Republican talking points," she said. "So, when someone asks me would something like [raising the cap on wages subject to payroll taxes] be considered, well, anything could be considered when we get to a bipartisan commission," Clinton said. "But personally I am not going to be advocating any specific fix until I am seriously approaching fiscal responsibility."
Obama was not satisfied by Clinton's response. He warned that 78 million baby boomers are preparing to retire and there are fewer workers to support them.
"It is common sense that we are going to have to do something about it," he said. "That is not a Republican talking point." He went on to argue ..."it is important if we are going to lead this country that we be clear with the American people about what our intentions are."
Clinton and Obama did agree on one thing Tuesday night: that Social Security's financial situation is a problem, not a crisis. There's a different view among Republicans running for the White House.
Fred Thompson had a different description in a recent candidate debate in Florida
"The fact of the matter is we're bankrupting the next generation," Thompson said. "We're spending the money of our grandkids and those yet to be born." He bemoaned that fact that something that is "unsustainable and threatens our economy not being discussed more on the campaign trail."
Most of the other Republican candidates have played it safe, advocating private accounts for Social Security, something always popular with their party's constituency. But, Thompson says he's got some ideas he thinks could avoid generational warfare and big tax hikes or benefit cuts in the future. "And the indexing of benefits from wages to prices is one way to do that," he said.
But while it sounds innocuous, calculating benefits for future retirees based the rise in prices instead of wages, is a big change. Despite Thompson's suggestion, price-indexing would lead to a significant cut in promised benefits for future retirees. On the other hand, it's clear price-indexing would also go a long way toward fixing Social Security's financial problems. In any case, Thompson's prescription takes a road largely untraveled in a party that has often suffered politically when raising Social Security as an issue.