Fiscal Commission’s Trial Balloon: Your Grandkids Didn’t Really Want Social Security, Did They?
Proposals to cut Social Security benefits were met with outrage when the co-chairs of President Obama’s Fiscal Commission released their recommendations November 10. Though many of the cuts would happen gradually, the cost-of-living formula would be cheapened starting next year—breaking earlier promises not to hurt current retirees.
The change would lower seniors’ benefits by 3.7 percent after they’ve been retired for 10 years, and by 6.5 percent after 20 years. The average Social Security benefit is already low: $13,000 a year, and just $11,000 for women.
The recommendations came from retired Senator Alan Simpson and Erskine Bowles, President Clinton’s former chief of staff, who’s now a director of the Morgan Stanley financial firm. The co-chairs attempted to play the generations against each other.
The grandchildren of today’s retirees—who aren’t thinking that far ahead—would be hit hardest: a 20-year old whose wages averaged $43,000 over her working life and retired at age 65 would see her benefits cut by 17 percent. If she made $69,000 in wages, the hit is even harder: 30 percent gone.
And today’s newborns would be working longer: the minimum retirement age would rise from 62 to 64 by 2075, the full-benefits age from 67 to 69.
TESTING THE WATERS
Obama’s appointees jumped the gun in releasing their recommendations a full three weeks before the full commission was scheduled to report, December 1. The White House made no comment on their proposals, waiting to gauge the anger level.
The Strengthen Social Security coalition noted the irony of proposals to cut America’s most popular program “so soon after an angry electorate has expressed its frustration with a Washington political class that does not appear to be listening.”
The co-chairs proposed not only cuts to Social Security but also tax hikes on the middle class, tax cuts for the rich, and cuts to military spending, in line with its mandate to curtail the federal deficit. The far-reaching nature of their proposals—something to offend everyone—made it less likely that the 18-member Fiscal Commission will find the 14-person super-majority it needs to present a report to Congress.
But Social Security’s defenders breathed no sigh of relief. “Don’t worry, they’ll be back,” said Nancy Altman of Strengthen Social Security.
Those defending Social Security could claim one victory: for the first time the commission co-chairs admitted that Social Security has never added a penny to the deficit. (The program is self-funded, by law, and has a $2.3 trillion surplus, projected to last till 2037.)
After months of getting pounded on this point by unionists and other forces, Simpson and Bowles said Social Security should be targeted “for its own sake, not for deficit reduction.”
The AFL-CIO’s Alliance for Retired Americans planned informational sessions and actions for its angry members around the country. One plan is to pressure Democrats who’ve just lost their seats in Congress.
Brett Bursey, the state ARA vice president in South Carolina, is hoping that the upside of Representative John Spratt’s defeat is that he will feel more freedom to break with the White House, if necessary.
“If Erskine Bowles is representing the administration position, it doesn’t look good,” Bursey said.
The Strengthen Social Security coalition is planning a big call-in to Congress November 30. Details, and more information about the proposed cuts: here. You can choose a letter to send to your local newspaper directly from the site.