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Sunday, November 28, 2010

"Workers Must Work Longer for Less Because the Rich are Living Longer"

It's nice to see the local paper highlighting this side of the Social Security debate:

Washington elites making their move on Social Security, by Nancy Altman and Eric Kingson, Commentary, Register Guard: Alan Simpson and Erskine Bowles, the co-chairs of President Obama’s deficit commission ... released their proposal to reduce the federal deficit... In releasing their plan, the co-chairs went out of their way to make clear that they were proposing changes to Social Security “for its own sake, not for deficit reduction.” ... Simpson and Bowles just couldn’t keep their hands off the program.
One thing they propose is increasing Social Security’s retirement age to 69. ... Increasing the age to 69 would cut benefits by one-quarter from a decade ago, when the retirement age was 65. The co-chairs also want to increase the early retirement age to 64. ... As a new General Accountability Office report concluded,... Raising the early retirement age will shut out workers who are disproportionately low income and minority,... potentially forcing them to seek disability benefits or welfare. ...
Over the last quarter-century, life expectancy of lower-income men increased by one year, compared to five for upper-income men. And lower-income women have experienced declines in longevity. ... In effect, the Bowles-Simpson plan says to America’s workers that they must work longer for less because the rich are living longer.
In addition to raising the retirement age, the Bowles-Simpson plan would reduce benefits to ... future recipients ... by as much as 36 percent... Bowles and Simpson ... also propose cutting the cost-of-living adjustment for those now receiving Social Security. ...
For all the talk of polarization, the American people are clear... A recent poll ... found that 67 percent ... opposed cuts in benefits; 69 percent opposed raising the Social Security retirement age to 69. ... Some 66 percent ... favored doing away with the current cap on payroll taxes to fund Social Security. Currently, taxpayers are taxed only on their first $106,800... Simply requiring ... taxpayers to pay the tax on all their income would bring in enough revenue to allow benefits to be raised across the board and still have the program in balance for at least the next 75 years. ...
 Despite the clear view of the American people, the elites in Washington seem to think it would be better to reduce benefits than to require the wealthy to pay the same percentage of their salaries into Social Security as everyone else does.
If politicians choose to cut Social Security benefits, when they could simply scrap the cap, we predict that this midterm will seem like a walk in the park compared to what awaits them in 2012.

[It's not even clear that all of the proposed changes are for Social Security's "own sake" rather than deficit reduction. The Government Accountability Office report referenced above indicates that increasing the early retirement age will actually have a negative impact on Social Security solvency.]

    Posted by on Sunday, November 28, 2010 at 09:57 AM in Budget Deficit, Economics, Politics, Social Security | Permalink  Comments (44)



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