Senate Majority Whip Dick Durbin (D-Ill.), a member of the gang, has been trying to forge a grand bargain on the deficit in the Senate by convincing fellow party members that Republicans will come to the table only if they can talk Social Security, too.
Republicans are insisting the retirement benefit be reformed if they are going to take heat from tackling tax loopholes that benefit corporations. Sen. Lindsey Graham (R-S.C.) is a leader in this effort; he will propose a bill next week that would cut benefits to make the program sustainable past 2037 when its trust fund runs out.
The president’s debt commission last year included Social Security reform in its debt plan, even though Social Security is not paid for from general funds and does not currently increase the debt.
Panel co-chairman Erskine Bowles said Tuesday it was in the plan because the chairmen felt it was the “moral” thing to do to tackle the solvency issue now.
“Social Security reform should not be part of our deficit conversation,” Harkin said Wednesday.
“I don’t mind looking at long-term solutions to Social Security separate and apart from the talks we have on deficits and balanced budgets … but we have to keep in mind that people are talking about Social Security in sort of a panic,” he said. “Social Security will pay out 100 percent of benefits until 2037.”
Harkin said Republicans have an ulterior motive for trying to get Social Security reform on the table: It’s a prelude to the GOP pushing to convert the program to a system of private accounts, he said.
“I think this is all really part and parcel of trying to privatize Social Security,” he said. “Wall Street and people like that have been anxious to get their hands on any slice of Social Security. You are talking about hundreds of billions of dollars they could manage.”
Harkin would make the program solvent by raising the cap on the amount of payroll income that can be taxed. Currently, individual income earned above $102,000 is not subject to Social Security taxes.
Harkin said he would support Medicare and Medicaid being reformed as part of a bipartisan debt package.
This post was corrected to accurately descrbe the Social Security payroll cap at 2:43 pm.