Clinton cites her take on retirement

Drawing a distinction with her main rival in the Democratic presidential race, Sen. Hillary Rodham Clinton said Friday that the nation should not raise the eligibility age for collecting Social Security retirement benefits.

The New York lawmaker used a speech to the AARP at its annual lifestyle expo in Boston to underscore her differences with Sen. Barack Obama (D-Ill.) over the best way to shore up the Social Security system.

Clinton aides drew attention to a television interview Obama gave in May, where he refused to rule out raising the retirement age or boosting payroll taxes to ensure Social Security remains solvent over the next few decades.

“Everything should be on the table,” Obama told ABC News’ George Stephanopoulos in that interview.

In her speech, Clinton took the position that certain solutions should be off-limits.

“I’ll tell you, putting everything on the table is not the answer,” she said. “Raising the retirement age is not the answer. Cutting benefits is not the answer.”

In reply, an Obama campaign spokeswoman suggested Clinton was trying to exploit Social Security for political advantage.

Jen Psaki said that “rather than using it as a political wedge for purposes of a campaign, President Obama will work with Democrats and Republicans to ensure Social Security is solvent.”

The dispute reflects the increasingly competitive nature of the Democratic presidential contest, with the leading candidates looking to challenge and engage one another as the voting draws closer.

Both Obama and former Sen. John Edwards (D-N.C.) are using their campaign appearances to draw sharp contrasts with Clinton, the front-runner in national polls. Of late, both have more directly painted her as a cautious Washington insider resistant to dramatic political change.

Obama stressed that theme in a speech Friday to a crowd of more than 1,000 in San Francisco.

“There are those who tout their experience working the system in Washington,” Obama said in a clear reference to Clinton. “I understand that, but the system in Washington isn’t working for us. And it hasn’t been working for us for a very long time.”

The gathering marked the formation of a grass-roots organizing group, the California chapter of Women for Obama.

Clinton said in her speech that President Bush was covering the costs of the Iraq war and tax cuts through borrowing and tapping the Social Security trust fund.

Invoking the federal budget surpluses that accumulated during the final years her husband was president, Clinton said: “We need to get back to the fiscal responsibility that we had in the 1990s so we’re not draining the Social Security trust fund anymore.”

After her speech, a spokesman for the 39-million-member AARP, Mark Kitchens, said raising the retirement age and other proposals for fixing Social Security needed “to be openly debated.”

Projections show that Social Security’s trust fund can pay full benefits until 2040. Without any action to replenish the system, Social Security at that point will be able to pay only 74% of benefits.

A spokesman for the Clinton campaign, when asked how Clinton would keep benefits intact, said she would restore budget surpluses necessary to prolong the system’s solvency.

Savings can be achieved by cutting the number of federal contractors and repealing Bush’s tax cuts for people earning more than $250,000 a year, among other steps, her spokesman said.

peter.nicholas@latimes.com

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Times staff writer Mark Z. Barabak in San Francisco contributed to this report.