MacroScope

Social Security should not be part of the current negotiations over the U.S. budget – that was the message from outgoing Treasury Secretary Timothy Geithner over the weekend. During a veritable tour of Sunday shows aimed at addressing negotiations surrounding the “fiscal cliff” of expiring tax cuts and spending reductions, Geithner told ABC News’ “This Week”:

What the president is willing to do is to work with Democrats and Republicans to strengthen Social Security for future generations so Americans can approach retirement with dignity and with the confidence they can retire with a modest guaranteed benefit.

But we think you have to do that in a separate process so that our seniors aren’t – don’t face the concern that we’re somehow going to find savings in Social Security benefits to help reduce the other deficit.

Ben Bernanke is trying to have it both ways.

In testimony before the Senate Banking Committee on Thursday, the Federal Reserve Chairman argued that he had tried as much as possible to stay away from fiscal issues that are outside the purview of the central bank. Democratic Senator Jack Reed, of  Rhode Island, asked Bernanke whether, like his predecessor Alan Greenspan, he thought former president George W. Bush’s tax cuts had been appropriate.

The chairman responded:

“I’ve done my best to leave that authority where it belongs, with the Congress.”

What Bernanke didn’t disclose is that back in 2005, while he served as chairman to the president’s Council of Economic Advisers, he was singing a very different tune. In fact, he went so far as to argue in a September 2005 testimony to Congress that the very underpinnings of U.S. economic growth might be compromised if Bush’s controversial tax cut program were not etched into law for good.