Yes, They’re Serious About Cutting Social Security
Following hard on the heels of a poll finding that voters would much rather raise taxes on the wealthy than cut Social Security, White House fiscal commission co-chairs Erskine Bowles and Alan Simpson have offered a proposal that cuts Social Security and brutalizes the middle class while being favorable to the very wealthy.
Social Security cuts:
- Index the retirement age to longevity — i.e., increase the retirement age to qualify for Social Security — to age 69 by 2075.
- Index Social Security yearly increases to inflation rather than wages, which will generally mean lower cost of living increases and less money per average recipient.
- “Increase progressivity of benefit formula” — i.e., means test part of Social Security benefits by 2050.
- Increase the Social Security contribution ceiling: while people only pay Social Security taxes on the first $106,800 of their wages today, that’s only about 86% of the total potentially taxable wages. The co-chairs suggest raising the ceiling to capture 90% of wages.
And:
Medicaid/Medicare cuts
- Force more low-income individuals into Medicaid managed care.
- Increase Medicaid co-pays.
- Accelerate already-planned cuts to Medicare Advantage and home health care programs.
- Create a cap for Medicaid/Medicare growth that would force Congress and the President to increase premiums or co-pays or raise the Medicare eligibility age (among other options) if the system encounters cost overruns over the course of 5 years.
Senator Bernie Sanders said in a statement:
“The Simpson-Bowles deficit reduction plan is extremely disappointing and something that should be vigorously opposed by the American people. The huge increase in the national debt in recent years was caused by two unpaid wars, tax breaks for the wealthy, a Medicare prescription drug bill written by the pharmaceutical industry, and the Wall Street bailout. Unlike Social Security, none of these proposals were paid for. Not only has Social Security not contributed a dime to the deficit, it has a $2.6 trillion surplus.
“It is reprehensible to ask working people, including many who do physically-demanding labor, to work until they are 69 years of age. It also is totally impractical. As they compete for jobs with 25-year-olds, many older workers will go unemployed and have virtually no income. Frankly, there will not be too much demand within the construction industry for 69-year-old bricklayers.
“Despite all of the right-wing rhetoric, Social Security is not going bankrupt. According to the Congressional Budget Office, Social Security can pay every nickel owed to every eligible American for the next 29 years and after that about 80 percent of benefits.
“If we are serious about making Social Security strong and solvent for the next 75 years, President Obama has the right solution. On October 14, 2010, he restated a long-held position that the cap on income subject to Social Security payroll taxes, now at $106,800, should be raised. As the president has long stated, it is absurd that billionaires pay the same amount into the system as someone who earns $106,800.
“With the richest people in this country getting richer and the middle class in decline, it is absurd that billionaires pay the same amount into the Social Security system as someone who earns $106,800.”
To be clear, this is not the final report of the fiscal commission, and several commission members have expressed strong opposition. But we should be taking it seriously as an attempt to influence the basic terms of the debate going forward, so that they can’t next offer up something that’s still horrible and paint it as a compromise just because it’s not quite as bad as this.
Tags: social security
Comments
The problem with means testing is that aging is unpredictable. The onset of a serious illness can wipe out the savings of a senior citizen.
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Remember that 25% of the population is single, so we can;t make policy based on an assumption that the elderly will have children to take care of them.
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Means testing = welfare.
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Yep, it’s the first step to defunding it entirely. Programs for the poor end up being poor programs…since the poor can’t afford to hire lobbyists to protect them.
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WE must fight to leave social security alone!
There is NOTHING wrong with it except maybe it should have a lower age for collecting and pay more.
Yes, it IS and can continue to be solvent, we’ll just have to figure out how to increase funding for it and that’s not hard to do, people already have ideas that will work.
We can NOT let the Republican/Wall Street types rob us of the one great program America has left. They’re already squeezing 5 million 99ers out of unemployment benefits!
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