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Driven by campaign populism, Democrats unite on expanding Social Security

WASHINGTON — President Barack Obama, Hillary Clinton, and other Democrats are rallying around proposals to expand Social Security and increase benefits, a sea change after three decades dominated by concern over the program’s rising costs.

The Democrats’ new consensus was driven by the populist election-year politics of Senator Bernie Sanders and by a realization that many workers have neither traditional pensions nor any significant retirement savings.

The Democrats’ proposals would amount to the biggest changes in Social Security since 1983, when the program faced a financial crisis. To save the program, spending was trimmed, taxes were raised, and the eligibility age was set to increase slowly as the population ages.

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Since then, many Republicans and some Democrats have expressed concern about the growing cost of entitlement programs, including those for retiring baby boomers, and have discussed proposals to trim Social Security further.

“Social Security is going broke,” House Speaker Paul Ryan has declared.

In budget negotiations in 2011 and 2012, Obama seriously considered proposals to curtail future Social Security benefits by changing the way cost-of-living increases were calculated. He included a similar proposal in his budget request in early 2013, in an unsuccessful effort to achieve a bipartisan agreement on deficit reduction.

The calculations that drove those efforts have not changed. In their last report, in July 2015, the trustees of Social Security, including four administration officials, said the program’s old-age and disability insurance trust funds could be depleted in 2034, and could then pay 79 percent of promised benefits unless Congress took action.

But the politics have shifted. Obama summarized the new Democratic consensus in a speech on June 1.

“It’s time we finally made Social Security more generous, and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned,” Obama said. “And we could start paying for it by asking the wealthiest Americans to contribute a little bit more.”

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Democrats have offered a number of proposals to alter the formula for calculating Social Security benefits or financing the program, but have not endorsed a specific legislative package. One proposal would increase benefits for everyone, with extra help for those considered most vulnerable. Another would increase the cost-of-living adjustment to reflect the fact that older Americans tend to use more health care services. Another proposal would impose payroll taxes on workers’ earnings above $250,000 a year.