Safe and unsound

Members of Congress have left Washington for vacation, but if you ask them whether your Social Security and Medicare money is safe without a vigilant Congress guarding it, many will tell you “Not yet, but we’ve got negotiators working on lock boxes to take care of that.” Congress often fools itself this way.

The lock boxes are metaphorical – also likely ephemeral, see below – devices to shield Medicare and Social Security surpluses so that money is kept for its intended purpose and not spent on programs or tax breaks. They are part of the fiscal discipline members of Congress impose on themselves to build confidence among voters that no one is more dedicated than they to making sure you get yours. All four members of Maine’s delegation supported one version or another of the lock box idea.

In some ways, lock boxes are the quintessential paper umbrella – useful until needed, which in this case might not be a bad thing. The idea of this protection is easy to accept in times of budgetary surplus, but when an economic downturn comes along, lock boxes suddenly don’t look very good. Congress, for instance, can and should play a role in fending off a recession by increasing spending. Just as it has used – and repaid – Social Security surpluses in the past to stimulate the economy, it might choose that course again to reduce the severity of economic declines, or might if the money isn’t locked away.

Opening the lock boxes would require a series of votes in the House and a three-fifths majority vote in the Senate. This sounds like quite a security system, but a look back at a similar attempt at fiscal discipline suggests the dedicated money might not be as safe as you’d think. In 1997, Congress agreed to budget caps – levels of spending they would live under to ensure elimination of the deficit – which started off fairly easy and became progressively stingier. Or would have if they had lasted more than two years. Quietly last year, Congress sensibly introduced and passed legislation to ignore the caps and support a responsible budget. And nothing terrible happened – programs continued, tax breaks passed and the surplus grew beyond expectations.

Since lock boxes seem to be a handy part of campaign 2000’s treasure chest, perhaps the same thing will happen this time. Medicare and Social Security surplus will be kept in a vault in the deepest recesses of the Capitol – until, after a proper debate during a time of economic difficulty, members of Congress decide the money is needed and vote to use it, just as Congress always has. Admitting to such an idea, of course, is immensely unpopular with the public, which is why incumbents will point out how they fought – against whom? – for this protection. What they don’t say is that members have a key to these lock boxes handy.