House Speaker Nancy Pelosi holds a press conference at the Capitol to commemorate the 75th anniversary of the Social Security Act. (Pete Marovich/ZUMApress.com)

This summer, Social Security – the government program that provides a steady check for seniors – turned 75. In Washington, lawmakers celebrated its platinum anniversary not with champagne, but with a heated argument over whether to reform the costly entitlement program by slashing benefits or raising the retirement age. Indeed, with the national debt over $13 trillion and the government running at a $1 trillion a year loss, the Obama administration created a deficit commission — the bipartisan National Commission on Fiscal Responsibility and Reform — to find ways to return the country to the black. In anticipation of its report, and in anticipation of possible changes to the program, lawmakers have started discussing how to reform Social Security.

[Economy1] After running a surplus for years and building up a sizable trust fund, Social Security now runs in the red. Though the program is far from bankrupt, more money is pouring out than going in. Economists project that the trust fund will be emptied by 2037. From there, opinions diverge on how far into debt the program will fall if nothing is done.

“Social Security is not in immediate trouble. There’s been a lot of exaggeration of that problem,” says Alice Rivlin, senior fellow at the Brookings Institution and a member of the deficit commission. “It is not on a solid basis for the long run, however. The sooner we act, the less we have to do.”

The problem is, there’s no consensus on what form that action should take. And many of the most commonly discussed tactics for stemming the flow of red ink would disproportionately impact lower-income Americans, the segment of the population that depends on Social Security the most.

One idea that comes up frequently is raising the retirement age. House Minority Leader John Boehner (Ohio), for instance, proposes lifting it to 70; some economists have suggested lifting it to as high as 75.

The idea sounds good: People are living longer, so it makes sense they will be working longer as well, right? But raising the retirement age will not necessarily keep people in the workforce longer, says Dean Baker, co-director of the Center for Economic Policy Research. For lower-income Americans, it would often just consign them to a retirement of lower benefit checks.

Already, around two-thirds of non-disabled workers elect to begin receiving smaller checks at 62 rather than full payments at 65. The hardship of raising the retirement age falls disproportionately on low-income workers who work in physically demanding professions, jobs they may not be able to continue through their seventh decade. According to Baker, 45 percent of workers over the age of 58 hold physically demanding jobs. Among those who lack a high-school diploma, that percentage skyrockets to around 75 percent. “If the hope is that people will work longer, that’s a very difficult thing for low and moderate income Americans to do,” Baker says.

Moreover, though the average lifespan has increased since Social Security’s creation, those extra years aren’t enjoyed equally by all Americans. Overall, Americans are living about 7 years longer. But the poorest 20 percent of Americans are living just two years longer – coinciding with that increase in retirement age. Baker notes that minority Americans fare even worse. “Even at 65, there’s a gap of about two years in lifespan. Also, on average, they have much lower wealth at retirement, so they’re much more dependent on Social Security.”

Center and right-leaning policy experts say another way to limit Social Security expenditures is to change the baseline for the benefits calculator from a wage index to a price index. Since the price of goods tends to grow more slowly than wages do, this shift would reduce the amount the program would have to pay out in the future. Supporters of this proposal say that because the benefits will still increase along with price inflation, seniors won’t suffer a shortfall in real-dollar terms.

This logic works in theory. But in practice, it would seriously impact lower-income Americans. Why? Seniors spend differently than average-aged workers: They buy more healthcare goods and services. And healthcare costs are skyrocketing well above the average inflation rate, so lowering benefits would make it more difficult for retirees to cover their costs. The more economically strapped the American, the more it would hurt.

Other plans would have less impact on those least able to shoulder the burden. One idea would be to reduce benefits for wealthy retirees. The idea is that “Bill Gates doesn’t need social security,” says Brookings’ Rivlin.

The problem is deciding where to set the bar: Too low, and you ensnare middle-class families, too high, and you only earn the ire of the superrich without contributing much to the bottom line. Some experts, including Rivlin, think the political cost probably wouldn’t be worth the impact on the bottom line. Polls show that even wealthy Americans want their Social Security, and are willing to pay for it. The government might net a little more money, but it would lose the public support and buy-in of wealthy (and thereby influential) citizens.

“U.S. benefits relative to earnings are low by comparison with those in other wealthy nations,” says Henry Aaron, senior fellow at the Brookings Institution. “I don’t think there’s a strong case for cutting benefits on the merits of the idea. In my view, the bulk of the fix should come from the revenue side.”

Many economists on the left share that sentiment. “It makes sense to fix social security by increasing revenues and making sure a good chunk of those revenues come from the high end of the income distribution,” says Monique Morrissey, an economist at the Economic Policy Institute.

Raising the payroll cap is one popular idea. Currently, the first $106,800 an American makes is subject to the Social Security tax; above that, the earner pays nothing. “If you eliminate the cap, you’re probably getting very close to eliminating the entire Social Security deficit for the next 75 years,” says Christian Weller, senior fellow at the Center for American Progress. “The more common proposal is to raise the cap so 90 percent of earnings are subject to the tax, which would eliminate about a third of the deficit.”

Another idea under consideration is raising the payroll tax rate by a fraction of a percentage point. Although the flat rate of this tax is inherently regressive, some left-leaning experts say it’s preferable to a cut in benefits, especially when the prospect is discussed in conjunction with other modifications like a minimum benefit, as described in a recent report by the Urban Institute.

Not everyone thinks adding to the payroll tax rate is the way to go, though. “It seems to me that raising the payroll tax is the least desirable way to try to move the program towards solvency,” says Will Marshall, president of the Progressive Policy Institute. “It’s a tax on work and makes it more expensive for employers.”

Marshall supports ideas more commonly embraced by the right to make up the shortfall, including an increase in the retirement age and a downward adjustment on the formula used to calculate benefits.

Some Republican politicians are still pushing for privatization, pointing to the rise of the stock market over the long term. Mike Tanner, senior fellow at the Cato Institute, asserts that even if a retiree cashed out at the trough of the market in 2009, he or she would have still experienced a growth in wealth. Given the wariness with which many Americans bruised by a drop in their 401(k) and home values now view the stock market, though, privatization may be a tough sell at least until the current bear market fades from our collective memory. “A lot of Republicans seem to view private investment as some kind of panacea, which I don’t think is correct,” says PPI’s Marshall. “That wouldn’t solve the underlying structural problems.”

Right-leaning experts tend to paint a bleaker view of the Social Security situation in general. Cato’s Tanner explains that the difference is that they include in their calculation of upcoming obligations the cost to be borne by the Treasury when the program cashes in its trust fund bonds. Obviously, that money will have to come from somewhere, but progressive economists like CAP’s Weller, counter that it’s disingenuous for the right to say those bonds pose an economic risk when the Social Security surplus is one factor that was used to justify Bush-era tax cuts in the first place.

Experts of all stripes like to point out that Social Security reform should be a snap compared to changing more complex programs like Medicare. In a strictly economic sense, that’s true. But the discussion around Social Security often threatens to collapse under the metaphorical weight lawmakers have conferred on the program. “It’ll probably be more politically determined than substantively determined,” PPI’s Marshall concedes. “Right now neither side wants to come out of its assigned place.”

Smirking a bit, Clinton, just back from a trip to Southeast Asia, acknowledged that “some” believe that a multipolar world “undercuts American power and leadership.” But she said that was simplistic. “We’re seeking to gain partners in pursuing American interests, and we happen to think those interests coincide with universal” aspirations, Clinton said. The alternative approach of demanding foreign nations cooperate with the U.S. is a nonstarter. ”We can’t begin a conversation with someone by saying, ‘Here are the ten things you need to do to be a responsible stakeholder,’” Clinton said when challenged by a former U.S. ambassador, Martin Indyk, on how to persuade sometimes recalcitrant nations that U.S. interests overlap with their own interests.

Several days’ worth of far-ranging dialogue with the Chinese government on energy security and China’s development role in Africa, Asia and Latin America, she said, contributed to her endorsement of the National Security Strategy’s rules-based internationalism. “The sum of the parts add up to a strong endorsement of American leadership,” she said.

Conveniently, they will ignore these new numbers from the Tax Policy Center, a joint project of the nonpartisan Urban Institute and Brookings Institution, which found that, however you slice them, federal taxes on the median middle-class family are just about at five-decade lows. The Center on Budget and Policy Priorities, a liberal policy group, explains:

This year, the Making Work Pay tax credit, which President Obama and Congress enacted as part of the 2009 American Recovery and Reinvestment Act, is providing a credit of $800 to married joint filers ($400 to single filers). A median-income family with two children thus will receive an $800 tax cut in the return it files this year.

With the new tax cut, the median family’s federal income taxes will equal just 4.6 percent of its income in 2009. That is lower than in any year since 1955 (the first year for which these data are available) except for 2008, when another stimulus-related tax cut was in effect.

You think those numbers would be cheered by the Tea Party crowd. They haven’t been. Instead, you’ve got Rep. Mike Pence (R-Ind.) taking to the chamber floor and condemning Democrats for “a budget with record taxes and spending that will add a trillion dollars to the national debt in the next ten years.”

They passed a national energy tax called cap and trade that will cause utility rates to go up on small businesses and family farms and businesses across this country by hundreds of billions of dollars.  And we just passed ObamaCare with $600 billion of tax increases.

And it isn’t even noon yet.

Luckily, the secretary of state is in the building. Here’s the highlight reel of Clinton’s remarks, done liveblog style.

Boldface names in the audience include Harold Koh, the State Department legal adviser who was sworn in yesterday despite being repeatedly slandered by conservatives; Anne-Marie Slaughter, State’s director of policy planning; Slaughter deputy Derek Chollet; and Martin Indyk, Brookings’ new foreign-policy director and top State Department Mideast official in the Clinton administration. I would boldface these names, but this is not Politico. Speaking of, Politico’s Laura Rozen is here.

OK, the main event.

First, a word about missile defense. Thanks to a “lengthy, in-depth” review, the Obama administration’s missile defense program isn’t “shelving” missile defense, but deploying a “stronger and smarter” program. “We are not, quote, shelving missile defense. We are deploying missile defense faster than the Bush administration.”

In Clinton’s office is a photo of Eleanor Roosevelt working on the Universal Declaration on Human Rights. “We have to have effective global institutions. That is not a choice, that is an imperative. It is up to us to determine how to make them effective.”

Nuclear proliferation “will be a main topic of discussion next week and beyond.” Giving Obama’s Prague speech “template” some practical application, “moving to a world of zero nuclear weapons… a generational commitment, it might not happen in our lifetimes.” Next week Obama will chair a meeting at the Security Council on nonproliferation and disarmament, which will play a “critical role” in enforcing compliance. Clinton will lead a meeting on the Comprehensive Test Ban Treaty. “Strengthening the non-proliferation regime means bringing other nations into compliance.” Like North Korea and Iran.

Iran. What’s “really at issue”: Iran has “refused for years to address the international community’s deep concerns about its nuclear program.” Iran’s” continued failure to live up to its obligations carries profound consequences for the security of the United States.”  The concern is not “Iran’s right to develop peaceful nuclear energy,” but ensuring the program is for peaceful purposes. “This is not hard to do.” Iran faces a “choice.” It can have partnership in education and science and cooperation with the international community. Or “isolation and economic pressure, less progress for the people of Iran.” Dialogue alone “doesn’t guarantee any outcome, let alone success,” but refusal to engage “yielded no progress on the nuclear issue.” Iran “must now decide whether to join us in this effort,” but Iran has “engaged in a campaign of politically motivated arrests, show trials and suppression” and “stands in the way of the justice it seeks.” But Obama remains “ready to engage… to address the concerns we and our partners have.” But “we have no appetite for talks without action.”

Iraq, Afghanistan/Pakistan, development and women are also on the UNGA agenda.

Iraq: Clinton hails January’s parliamentary election, and pledges to “work with Iraqis and the international community… to make these elections a success.” Civilian agencies’ role increases as U.S. troops depart. Sees a “stable, sovereign Iraq.” A “new, sustained and more mature partnership that will serve both of our countries far into the future.”

Afghanistn and Pakistan. Core goal “to disrupt dismantle and ultimately defeat al-Qaeda and its extremist allies,” the basis of the “original U.N. resolutions authorizing military action after 9/11 and creating ISAF, the NATO troop mission. “To effectively squeeze extremists fighting to destabilize both countries” is how Clinton describes the method. Calls on “all parties to respect” the Afghan electoral recount. Will step up “expectation of that new government to strengthen governance at all levels” after a winner of the presidential election is determined.

Clinton will continue to discuss Burma with allies.

Opportunities at UNGA: “So too are we pursuing a positive agenda so more people in more places can live up to their dreams.” Clinton will focus on development and women. “Critically important… to human security, national security, international security” which rests on “development and the rights of women.” Next week, she says, she’ll lay out a development-plus-diplomacy approach, away from “top down assistance that too often fails to meet the goals” and instead “focus on those root causes” and “transform the environment in which people are making these decisions and governments are held to a higher degree of performance and transparency.”  She’ll participate in an event with Secretary-General Ban Ki-moon on food security.

The U.S. delegation will host events to focus on women’s rights. Will chair a session of the Security Council in favor of an adoption of a resolution on “women, peace and security,” addressing sexual and gender-based violence as a tactic of war. Inspired by her recent trip to the Democratic Republic of Congo’s brutal war.

An “ambitious agenda,” and “we will remain vigilant and pro-active,” she says. It’s time to “take stock and reassess the values and ideals that move us forward” and produce “solutions to the problems that we all confront.”

OK, so now it’s question time. Martin Indyk asks the first question. Think it’ll be on Iran? Yup! Asks about Ahmadinjad’s continued Holocaust denial and his obstinence on nuclear questions. “As I said there are no guarantees of results, let alone success,” Clinton says. “But we do believe the opportunity presents itself for face-to-face discussions at the P5 plus 1.” The Iranians have a “lot of issues we want to discuss… I am not going to pre-judge this. We are on a dual track, engagement… and the other [track is] the consequences.” Not going to speculate what comes next. “We are not in this just for the sake of talking… not going to keep talking forever.” Wants to see “some movement by the end of this year, and I’m well aware of all the problems you have just briefly alluded to,” and will look at Iranian behavior for judging the next step.

Andrea Mitchell asks about the consequences for Iran that Clinton mentioned. “There has been a much more concerted outreach to the Iranian leadership and the Iranian people under President Obama than we have seen in thirty years,” she replies. “We, as you know, did not participate fully as a member of the P5 plus 1 until very recently… We were on the sidelines, pacing up and down the sidelines extremely agitated… and look where we are today. We are really nowhere.” The U.S. has spent “an enormous time listening to and working with our partners… and looking for ways to broaden that sense of cooperation, and looking for a sense of how our views can be better communicated… Think we have proceeded in a very thoughtful way, no guarantee of any particular outcome, but we’re determined to persevere.”

What about corruption in Afghanistan? “Corruption is as big a national-security threat as I can imagine,” she says. “It’s not only corruption in Afghanistan” but “corruption almost as an epidemic, undermining governance, undermining capacity of governments to make progress in ways that could grow a middle class… eaten away at the fabric of so many countries.” On Afghanistan “we have to take some of the responsibility… we aided and abetted [corruption] in implicit ways in not demanding more, and not demanding more earlier.” It’s not a good-government concern. It’s “absolutely essential.”

A questioner asks about Israeli-Arab peace and continued Israeli settlements. “Emotions in Arab and Islamic world are getting really very high,” the questioner notes. Asks about George Mitchell, the administration’s Mideast envoy, and his hopes for progress. Clinton: “I understand the emotion.” Obama “started on the very first day with a commitment to pursue a comprehensive peace agreement premised on the two-state solution” about which the administration “is very patient and very determined.” References a history of failure on peace processing, but says, voice rising, the Obama administration will “never give up” and “expect both sides, not just one, to be ready to pursue this comprehensive peace agreement.” Will do “all we can to persuade, cajole, do all we can… to make that agreement… It is up to the Palestinians and the Israelis.” Expects “both sides” to be “actively engaged and willing to work toward that resolution.” Mitchell’s work is “very valuable in sorting through a lot of the concerns,” because previously the parties were “encouraged to work themselves toward a resolution, the United States was not actively engaged in it.” But backsliding “is not going to discourage us.”

Strobe Talbott asks a final question about health care and cap and trade. Asks about the connection between Obama’s domestic and foreign agendas. “I don’t accept the premise of the question,” Clinton replies. The 1994 failure on health care didn’t undercut President Clinton’s foreign policy or even the rest of his domestic agenda. “But I don’t think we’re gonna face that because I think we’re gonna be successful” on health care. And we’re out.

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Will the administration be more swayed by an author of books about fighting terrorism than by its own deputy attorney general at the Office of Legal Counsel, Marty Lederman? The choice is stark, and if NPR’s Ari Shapiro is correct that Wittes is planning to reveal proposed legislation on the matter today, and that he has the ear of the Obama administration, then it may ultimately come down to whose view the administration credits more.

Wittes has no formal legal training and has proposed a potentially unconstitutional system of indefinite detention of terror suspects without trial; Lederman is an esteemed constitutional law professor at Georgetown University with eight years of prior experience advising the executive branch from the Justice Department — and he has previously expressed serious concerns about preventive detention.

As Spencer pointed out, before his appointment to the Office of Legal Counsel in the Obama administration, Lederman, in an online colloquy with Wittes, specifically denounced the idea of preventive detention based on the president’s determination of who is dangerous.

“’Dangerousness,’ as such — particularly dangerousness as evidenced primarily by one’s ‘deeply held beliefs’ — is not a constitutionally valid ground, standing alone, to indefinitely incarcerate persons without the protections of a criminal trial,” he wrote in Opinio Juris. “Indeed, even if the dangerousness is demonstrated by past criminal conduct, that is not a permissible ground for noncriminal detention.” He continued that the Supreme Court has repeatedly held that deterrence of dangerous people “is a function ‘properly … of criminal law, not civil commitment.’”

Wittes may have a very “pragmatic approach to fighting terrorism,” as NPR describes it. (He’s also in the past proposed a system of “national security courts” that would suspend some of the usual criminal justice procedures — which sounds a lot like the new Obama military commissions proposal.) But it’s worth recalling that we’re in this situation to begin with because the Bush administration, dominated by non-lawyers, had insufficient respect for constitutional parameters.

This situation may be partly due to the lack of leadership in the OLC: Republicans have stalled the confirmation of Dawn Johnsen, President Obama’s nominee to head the office, for months now. That may be giving outsiders more say in the administration’s plans than they would ordinarily have.

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