Today, the co-chairs of President Obama’s fiscal commission released their final report, which will be voted on by the full commission on Friday. In order to move forward, the report needs to receive approval from 14 of the 18 commission members.
In the first iteration of their report, the co-chairs proposed raising the retirement age for Social Security, even though Social Security (by law) can’t contribute to the national deficit or debt. Relying on false assertions that Social Security “runs out of money in 2037,” the commission proposed cutting future Social Security benefits in order to prevent future cuts in Social Security benefits. The latest version of the report didn’t change in this regard, receiving praise from the likes of Rep. Paul Ryan (R-TX), who seems to sincerely believe that benefits must be cut in order to prevent benefit cuts:
I don’t like every idea in this Social Security reform, but you’ve really advanced the ball and gotten us toward a better conversation on making Social Security solvent. And Jan is right, this does not contribute toward debt and deficit reduction, but solvency in Social Security, which is really important. If we don’t do anything, when we run out of IOU’s, everybody gets a 22 percent across-the-board benefit cut. That ought to be avoided.
Rep. Jeb Hensarling (R-TX), after making a pitch for privatizing Social Security, made the same argument in support of the co-chair’s proposal. Watch a compilation:
Even Sen. Dick Durbin (D-IL) called raising the retirement age “acceptable.” So let’s review this one more time. If nothing — nothing! — is done to Social Security, it will pay full benefits until the year 2037. After that, the program is still projected to pay out 75 percent of benefits until 2084, which is close to full benefits once inflation is accounted for.
Of all the policy steps available to Social Security reformers, raising the retirement age is the most regressive, and is pushed due to a faulty understanding of America’s increasing life expectancy. Such a move would ultimately “cut benefits for tens of millions of middle class workers who are overwhelmingly dependent on Social Security for their retirement income.” As Nobel Prize-winning economist Paul Krugman put it:
I think it is worth pointing out that like so many proposals from [the right] side of the political spectrum — for this is, very much, bipartisanship as a compromise between the center-right and the hard right — this one involves a fundamental piece of strange logic. Namely, it argues that in order to head off the dire prospect of future cuts in Social Security benefits, we must…cut future Social Security benefits.
That isn’t to say that there aren’t progressive changes that can be made to Social Security. And the commission actually proposed some good ideas, like increasing the minimum benefit for low-income workers and bumping up benefits for the very elderly and the long-term disabled. But there’s no need to take these steps while simultaneously increasing the retirement age.