Conventional wisdom these days holds that Social Security must be cut. It is argued that we have to reduce the deficit, and since Social Security commands a significant share of the budget, it must be "on the table." Moreover, the elderly have done relatively well in recent years, achieving a lower-than-average poverty rate. The elderly, it is further argued, can now "afford" to shoulder some of the pain.

Hobart Rowen reports that Mario Cuomo suggested that some of the elderly are "comfortably fixed" and do not need their Social Security check to maintain a decent standard of retirement living {op-ed, Nov. 22}. Journalists and editorial writers have absorbed this conventional wisdom to such an extent that the seriousness of any deficit reduction is measured by whether Social Security is reduced or not. Politicians are called upon to rise "above politics as usual" and embrace a bipartisan effort to cut "middle class" entitlements. It is an argument that Congress almost bought.

The logic of these appeals, however, is flawed. What's billed as an effort to have the "comfortably fixed" help reduce the deficit hardly lays a glove on them, but it will severely hurt the low-income elderly. The reason is simple. The elderly who have low incomes rely on Social Security much more than those who are well-off. Census Bureau figures on the 65-and-over population show that for the 26 percent with annual incomes under $5,000, 79 percent of their income comes from Social Security. The elderly with between $5,000 and $10,000 of income (about 34 percent of the elderly) obtain 73 percent of it from Social Security. At the other end, elderly persons receiving such grand incomes of $20,000 or more (about 14 percent of the elderly) count on Social Security for only 16 percent of their cash income.

The most regressive proposal is to eliminate the first 2 percent of Social Security COLA each year. Consider the effect of doing so for four years on two representative female neighbors over 65. One lives on a $7,500 annual income, 75 percent of it derived from the $5,625 she receives from Social Security. The other has a $40,000 annual income, putting her in the upper 5 percent of the elderly. She received $7,000 from Social Security, accounting for 15 percent of her income. The COLA reduction cuts the income of the low-income woman by an additional 1.5 percent each year -- 1.5 percent the first year, 3 percent the second and so on. Over a period of four years, she suffers a total loss equal to 15 percent of her current income. The "comfortably fixed" woman, on the other hand, actually loses only 3 percent over the same period. That is, the well-off neighbor suffers a proportionate loss of one-fifth the size of her neighbor's, despite having more than five times the income.

The low-income elderly have made substantial progress in recent years, at least in relative terms. In 1970 the elderly poverty rate was nearly 25 percent. The growth of Social Security and SSI since then fueled progress so that last year there were 1.2 percent fewer of the elderly living in poverty than in the general population. But this modest differential between the elderly and the general population hardly justified cutting back on the very programs that created this much-needed progress. It would take very little to reverse these gains, given the vulnerability of the elderly; more than 8 percent of the elderly are "near poor," living between the poverty line and 25 percent above it, compared with 4.6 percent of the overall population.

If conventional wisdom permits us to focus on who's done well and who hasn't, why don't we ask all of the truly "comfortably fixed," not just the elderly "comfortably fixed," to help out. After all, these are the folks who have done well in recent years. In fact, according to a just-released CBO study, the two highest income deciles -- the upper 20 percent of families with the highest incomes -- are the only group projected to have higher incomes in 1988 than in 1977. Moreover, as the CBO shows, this same group reaped the greatest benefits from the misguided tax reductions that helped fuel the deficit problem.

Rather than implement across-the-board cuts on Social Security, we should reset the tax rates on all high-income Americans, elderly and not. After all, the poverty rate of the rich is even lower than that of the elderly.

Larry Mishel

The writer is research director of the Economic Policy Institute, a nonprofit research organization.