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Why Would You Ever Cut Social Security?

By Matthew Yglesias  

"Why Would You Ever Cut Social Security?"

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Bruce Bartlett comments on the demise of the Conrad-Gregg statutory budget commission concept (note that more than fifty, but fewer than sixty, senators supported it):

As I wrote the other day, I have always been lukewarm to the idea of a budget commission because I don’t think we are ready, politically or economically, for serious deficit reduction. I also have problems with the way the proposed commission would be structured–requiring a supermajority for every recommendation seems like a recipe for gridlock.

That said, I have just been appalled by idiocy of the arguments against the commission that appear to have won the day in the Senate. In particular, the idea that revenues should be completely off the table is simply insane. And the idea that Social Security should be completely off limits is only slightly less crazy.

I accept, as a matter of political realism, that any budget deal will probably have to include Social Security cuts, primarily because the editorial page of The Washington Post seems to have a hard-on for cutting Social Security. But I don’t understand why you’d ever want to cut Social Security. Consider this chart:

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Famously, Medicare cost growth is a bigger issue that Social Security cost growth. But more to the point, Medicare beneficiaries are basically the same people as Social Security beneficiaries. But you can substitute Social Security benefits (i.e., money) for Medicare benefits (i.e., free health care) meaning that any given old person is much better off with $1,000 less in free health care (if necessary they can pay out of pocket) than with $1,000 less in money (you can’t sell your Medicare benefits to buy food) even though the taxpayer is reducing outlays by the same amount. What’s more, a Medicare cut (higher deductible, say) might slow the growth in health care costs whereas a Social Security cut has no bright side you could try to look at.

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