A political truism in modern America is this: Don't mess with social security benefits. Past presidents have tried, but the people just wouldn't let them privatize the program in any way. Although I doubt we'll see this emerge as a major issue soon, it has cropped up in the past few days.

The President recently said he would oppose measures to privatize the programs by switching to a system of private accounts, which some in Congress would like to do.

While this is indeed an old concern, what's interesting now is whether the big banks will weigh in with a position. My sense is that the time is not ripe. But it would really be a massive win for banks if all of a sudden social security benefits were to migrate to private accounts. It would be a game changer for the industry, which is already fighting for control of more retirement assets.

Privatization just might be in the interest of the banks' bottom lines. But they are certainly not in a position of strength to lobby for it. The public has always opposed such efforts, and the banks have little goodwill to expend right now.

For more:
- here's a Bloomberg article

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