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Social Security's defenders wary of deficit reduction commission
Commission members have declined to say what options they are considering, repeating the Obama mantra that everything is "on the table." But options for Social Security are no secret: In addition to boosting taxes, the lengthy list includes raising the retirement age for people now in middle age and trimming benefits for the wealthy.
House Majority Leader Steny H. Hoyer (D-Md.), a vocal supporter of the commission's goals, said he is advising rank-and-file Democrats not to dismiss any of those ideas as the campaign season gets into full swing.
"My advice to members is: Do not sign yourself into a corner," said Hoyer, who has been candid about the ugly choices involved in rebalancing the budget. "That's not because anybody intends to cut the benefits of any Social Security recipient today or tomorrow. But given the magnitude of the problems that confront us, do not limit your options."
Fearful of change
If pressed, some Democrats may find it hard to take Hoyer's advice. More than 50 million Americans received Social Security checks in April, including 37 million people over 65. For most retirees, the average monthly benefit of $1,168.60 is their main source of income, and proposals to change the program inspire fear.
Five years ago, when then-President George W. Bush proposed carving out a portion of Social Security taxes to create private retirement accounts, a coalition of progressive groups and advocates for the elderly organized to smother the plan. Even in a Republican Congress, the idea went nowhere. In 2006, Democrats campaigned against the plan and regained control of Congress.
Now some of the same groups are watching Obama's commission closely. They note that many of its members have publicly advocated cutting Social Security, including co-chairman Alan Simpson, a former GOP senator from Wyoming, who has chastised "greedy geezers" for fighting to protect their retirement checks while their grandchildren face a towering debt.
"Social Security is not the problem. It's simply becoming the target," said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.
Social Security has been self-supporting since 1935, with taxes paid by current workers financing benefits for current retirees. But people today retire earlier, live longer and have fewer children. As result, the number of workers for each retiree is expected to fall from about three to one now to two to one by 2050. Sometime in the next few years, taxes will no longer cover benefits.
The program's defenders argue that there is no crisis: If Treasury would repay billions of dollars in surplus Social Security taxes borrowed over the years, the program could pay full benefits through 2037. But many budget experts question whether supporting the existing benefit structure should be a cash-strapped nation's first priority.
"There is a level of intellectual consensus among everyone except the groups that are upset right now that things need to be re-examined," said David John, a retirement expert at the conservative Heritage Foundation.
At Social Security Works, Altman, a former tax lawyer who taught at Harvard University and assisted former Fed chairman Alan Greenspan on a 1982 commission credited with temporarily restoring Social Security's solvency, argues that there are better options than cutting benefits. Raising the income cap for Social Security taxes or imposing a tax on Wall Street transactions, she said, would raise enough to keep the program solvent for years.
"This is not a crackpot side of the debate," Altman said, citing polls showing broad public opposition to benefits cuts, even among conservatives. "My goal is not to further undercut people's confidence in Washington. But I don't feel like I can just be quiet when they are about to do what I feel is a real disservice to the American people."