‘That’s a lie’ accusation obscures bipartisan Social Security reform talks -sources

By Richard Cowan

WASHINGTON (Reuters) – A Republican U.S. senator’s accusation on Thursday that Treasury Secretary Janet Yellen had lied during a tussle over the future of the Social Security program obscured behind-the-scenes talks between the White House and lawmakers that have been underway for months, according to sources.

The verbal war began at a Senate Finance Committee hearing, when Republican Senator Bill Cassidy questioned Yellen if he knew that Social Security funds would run out in the next decade unless Congress strengthens the popular retirement program with 66 millions beneficiaries.

Biden replied to Yellen. “stands ready to work” Cassidy fought back with legislators. “That’s a lie because when a bipartisan group of senators has repeatedly requested to meet with him about Social (Security) … we have not heard anything on our requests.”

Cassidy, along with independent Senator Angus King who caucuses together with Democrats, has been working to fix Social Security underfunding, as around 10,000 baby boomers age each day.

Within a decade, both tax revenues and a backup trust fund dedicated to this purpose will be insufficient in order to pay the payouts of what is often regarded the most successful program administered by the federal government since Social Security was established in 1935.

The Cassidy-King bipartisan effort centers on the creation of a trust fund that would allow money to be used in the stock market instead of traditional Treasury securities, which offer lower returns.

It would be modelled after a railroad pension fund, which invests in stocks.

The recent bank failures and concerns about a wider crisis could prompt lawmakers to reconsider the possibility of investing Social Security funds as stocks.

Cassidy, King lead a group that includes Republican Mike Rounds and Democrat Tim Kaine as well as independent Kyrsten Sinema.

While there have not been any meetings between Senators Biden and Senators, a source with knowledge of the discussions indicated that White House aides are in talks with Senate. However, a formalized plan is not yet in place to present to Biden.

Officials from the White House did not respond to our request for comment.

“It’s going to be tough. I don’t think we should sugarcoat it. But there are serious conversations in the Senate … on a package that would improve Social Security’s finances,” Shai Akabas was the economic policy director at Bipartisan Policy Center in Washington.

Social Security is not just being saved by the senators.

Democrats could unite around the bill that Representative John Larson will announce by April 1, which would increase benefits across all levels and make it easier for those in need.

“There are close to 5 million Americans who get below-poverty level checks from Social Security,”Larson stated. Larson’s bill would establish a new floor for benefits at 125% poverty level. “making sure no one can ever retire into poverty.”

Any proposal that is successful would require the support of both Democrats who control the Senate and Republicans who hold the majority in Congress.

Many House Republicans are pushing for an external commission to recommend reforms in a fast-track approval process. This is similar to the one that was part a successful 1983 effort.

“If someone’s got a better idea that they can pass, that’s great. I tend to be conservative and say this worked once, let’s try that again,” Tom Cole, Republican Representative, told Reuters.

“That’s really just a way to have (benefit) cuts without leaving your fingerprints on it,” Nancy Altman, President of Social Security Works and Head of a Coalition of Labor Unions and Other Liberal-Leaning Groups, said the statement.

(Reporting by Richard Cowan, Editing by Scott Malone, Josie Kao).

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