RJ Eskow reported yesterday on a rumored deal coming out of the deficit commission on Social Security. It sounds like a really bad version of progressive price indexing, where benefits are cut for the vast majority of beneficiaries while they are raised slightly for those at the lowest income. This will be pitched as “saving” Social Security by cutting it for almost everyone, and will turn it into more of a welfare program than a social insurance program into which everybody pays.
The new proposal would pit middle-class seniors against the elderly poor, forcing them to compete for a stripped-down pool of dollars. The end result would be the one that many Commission members have pursued for years: to cut the most stable and successful program in the Federal government’s history.
Accounts of this pending deal come from the top-secret, behind-a-firewall, inside-the-Cone-of-Silence proceedings of the Commission itself, which is why they can’t be officially confirmed. (Remind me again: Why are such critical issues being debated in secret, only to be presented to Congress for ratification after the November elections?) But if these reports are correct — and there is good reason to believe they are — some members of the Commission presumably believe this strategy would confuse and divide the many Americans who oppose Social Security cuts, while defusing the growing resistance to their actions among progressive members of Congress.
I don’t know that this would defuse the resistance. The problem with getting this done is that you would be cutting benefits for the people most likely to vote, including people making as little as $30,000 a year, if you’re actually going to get the savings necessary to make any kind of difference. That’s never going to fly with the public or politicians, no matter progressive or otherwise. We know from polling that massive majorities oppose such an action, and giving more to people at the low end of the income scale will probably not help that at all. And just look at this incredible race down in Mississippi, where both the conservative Democrat and the conservative Republican are in agreement on resisting all benefit cuts:
Dueling news conferences brought U.S. Rep. Travis Childers and challenger Alan Nunnelee together today, figuratively, to oppose privatization of Social Security.
Childers, D-Booneville, was first up to bat, signing a pledge to protect Social Security from the Wall Street barons “who got us into this financial mess.”
A few minutes later, Republican Nunnelee of Tupelo echoed the pledge and also challenged Childers to reconsider repealing the nation’s new health care law […]
At his news conference, Nunnelee said he decided “months ago” to oppose privatization.
They also oppose raising the retirement age and cutting benefits or raising taxes.
They basically oppose doing anything to the program. And there’s going to be a tremendous amount of inertia in that direction. But a pledge from a Republican in a competitive race to oppose benefit cuts basically makes it impossible for the Cat Food Commission to carry out their plans. If you think there’s resistance among Republicans for raising the payroll tax cap (and there is, of course, though the support in the country is substantial), wait until you see EVERYONE revolt when you try to cut benefits for 75-80% of the population. And administrative costs for determining someone’s income (would it be average income, or income in their last five years, or what?) would eat up much of the savings anyway.
Social Security’s simplicity is part of its virtue: you pay in, you get a defined monthly benefit out. Trying to mess with that using indexing will fail.