* Program not contributing to deficit-Jack Lew
* Obama 2012 plan excludes deficit commission cuts
(Adds Lew comments, background, byline)
By Kevin Drawbaugh
WASHINGTON, Feb 14 Social Security would not
change significantly under President Barack Obama's 2012 budget
plan, leaving for later a fiscal reckoning on the massive U.S.
pension program for the elderly and disabled.
Saying he wants to work with Congress, Obama offered
general principles for reform reflecting Democrats' long-held
commitment to defend the politically popular program, but he
offered no new proposals to secure its long-term stability.
"I want to make clear, first, that Social Security isn't
contributing to the deficit in the next 5 to 10 years or
considerably beyond that," Jack Lew, Obama's budget director,
told reporters at a briefing on the budget proposal.
"Social Security is something that we need to address in
the long term ... The president wants to work together on a
bipartisan basis to have a conversation about how we can do
this in a way that meets our values," Lew said.
More than 50 million Americans receive benefits through the
$700 billion program, which is projected to be able to continue
paying 100 percent of benefits through 2037.
In the long run, however, Social Security faces a problem.
"Because of the economic downturn, the Social Security surplus
has been declining for several years," the administration said
in analysis of the budget proposal.
The surplus is projected to begin growing again as the
economy recovers, but "under present law, the surplus is
eventually estimated to decline, turn into a deficit, and never
reach balance again," it said.
Looking at the program's distant horizon, a commission
formed by Obama last year to tackle the federal deficit
proposed raising the Social Security retirement age and cutting
future benefits. Obama did not adopt the commission's Social
Security proposals in his budget plan.
In a statement that could leave the door open for
negotiation on modest benefit cutbacks for future
beneficiaries, Obama said he "will not accept an approach that
slashes benefits for future generations. No current
beneficiaries should see their basic benefits reduced."
Taking a stand on the issue of privatizing part of the
program, an idea some Republicans have embraced in the past,
Obama said "the administration will oppose any measures that
privatize or weaken the Social Security system."
Along with the Medicare and Medicaid healthcare programs
for seniors and the poor, Social Security is one of the three
major entitlement programs that in fiscal 2010 accounted for 44
percent of non-interest federal spending, up from 30 percent in
By 2035, when surviving baby boomers will be 70 or older,
these three programs could account for more than 60 percent of
non-interest federal spending.
Because of reforms in 1983, Social Security had been
running a cash surplus, with taxes exceeding costs, until
"The 2010 Social Security trustees' report projects that
the trust fund will return to cash surplus briefly as the
economy improves, but that cash deficits will reappear in
2015," said long-term analysis included in the budget plan.
(Additional reporting by Patricia Zengerle and Donna Smith;
editing by John Whitesides)