* Neither party eager to tackle Social Security
* Obama says tweaks can sustain program
(Adds context, comments)
By Kim Dixon
WASHINGTON, April 19 U.S. President Barack
Obama on Tuesday backed boosting the amount of individual
income subject to Social Security taxes, one of the first
concrete proposals he has endorsed to put the retirement
program on a stronger fiscal footing.
The president's deficit commission late last year proposed
raising the income cap on Social Security taxes, now at about
$107,000, but Obama has shied away from supporting specific
Many Republicans criticize Obama's idea as a tax hike.
Neither political party has wanted to touch the
government-run program, in part due to its popularity among
seniors, a crucial voting bloc. But it is seen as much easier
to fix than tackling government-run healthcare programs.
Obama noted that Social Security has not been a driver of
budget deficits, though the program will be unable to pay out
full benefits to retirees in a few decades. For that reason he
said "tweaks" are needed to stabilize the program's finances.
"For the vast majority of Americans, every dime you earn,
you're paying some in Social Security," Obama said at an event
with college students in Virginia. "But for (billionaire
investor) Warren Buffett, he stops paying at a little bit over
$100,000 and then the next $50 billion he's not paying a dime
in Social Security taxes."
Social Security, created in 1935 as part of President
Franklin Roosevelt's New Deal reforms, has accumulated huge
surpluses for years, which were borrowed by the government to
help finance income tax cuts and other programs.
Social Security will pay out more benefits than it collects
in taxes this year. It will return to surplus next year and in
2015 start tapping into interest income and trust fund
reserves. If Congress does nothing, the trust fund will be
exhausted by 2037 and taxes will cover only about 78 percent of
Raising the income cap "is a progressive solution to the
problem," said Bill Samuel, chief lobbyist at the AFL-CIO labor
group. "It is not a severe problem; it can easily be dealt
After hesitating to take hard positions in recent months,
Obama last week laid out a strategy to cut the budget deficit
by $4 trillion over 12 years, drawing a stark, ideological
contrast with a plan pitched by Republican U.S. Representative
Obama's blueprint, though, did not back boosting the Social
Security income cap, but recommended bipartisan talks to
address the program's long-term challenges.
Meanwhile, a bipartisan group of U.S. senators known as the
"Gang of Six" is working on a plan to put the deficit
commission's plan into legislation. That panel endorsed raising
the income subject to Social Security taxes.
(Additional reporting by Donna Smith and Andy Sullivan;
Editing by Paul Simao)