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View Diary: President Obama's Opening Move: Raise $1.6 Trillion In New Tax Revenue From The Wealthy (222 comments)

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  •  The so-called "Simpson Bowles" approach to SS (2+ / 0-)
    Recommended by:
    smiley7, gulfgal98

    looks pretty bad to me. He's a snip from an analysis posted yesterday on Huffpo by Eric Laursen, author of 'The People's Pension: The Struggle to Defend Social Security Since Reagan'

    As for Social Security, Simpson-Bowles would reduce the program's costs long-term by raising the retirement age in step with increases in longevity, switching to a stingier formula to calculate benefits, and cutting benefits outright for higher-income earners. To achieve those savings, Simpson-Bowles would cut deeply into the benefits that middle-income Americans rely on.

    Brookings Institute budget expert Henry Aaron has calculated that raising the Social Security retirement age as Bowles and Simpson propose would, alone, cut lifetime benefits by 6.7 percent for every additional year added. According to Social Security's chief actuary, their plan would reduce Social Security by a hefty 22 percent for a middle-class worker earning an average $43,084 annually. By 2080, Social Security would replace only 28 percent of that person's pre-retirement earnings, versus 49 percent under current rules. Simply put, hard-pressed working people can't afford this. While seniors certainly are better off than they were 40 or even 30 years ago, they are not a coterie of "greedy geezers" soaking up excessive benefits, as Senator Simpson has often portrayed them.

    What's not widely understood amidst the talk of cutting Social Security is that it's already been cut. Legislation in 1983 gradually raised the age for claiming full retirement benefits from 65 to 67, amounting to an average 13 percent reduction in lifetime benefits for anyone born after 1960. A little less than 10 percent live below the poverty line, and another 35 percent have household income less than twice that level. Nearly two out of three seniors get more than half their income from Social Security. The average monthly payment to retirees was only $1,176 in 2010.

    Social Security kept some 21 million people out of poverty last year, according to the Social Security Administration. Even modest cuts in benefits could push these people into hardship or worse, because for many of them -- and for many workers approaching retirement -- Social Security and Medicare are the only reliable sources of retirement income support they have left. Employer-based pensions are disappearing. Trillions of dollars of home equity vanished with the collapse of the housing bubble. Health care costs, including for long-term and nursing home care, continue to mount. And the student debt burden is affecting even workers in their fifties.

    Nope, not good at all.

    Eliminate tax breaks that stimulate the offshoring of jobs.

    by RJDixon74135 on Wed Nov 14, 2012 at 04:54:21 AM PST

    [ Parent ]

    •  There are two changes (1+ / 0-)
      Recommended by:
      DaveV

      that are good:
      a minimum benefit that would increase faster than inflation
      a progressivity calulation that would have those below the 50% median see their benefits rise faster than those above it.

      There is also a proposed change that would allow those who weee less healthy to collect benefits before 67.

      In my experience most people have not read the recommendations.  I mentioned most of what is in your quote in my original comment.

      I am not for Simpson Bowles - I am just saying not every idea in it is terrible.

      The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

      by fladem on Wed Nov 14, 2012 at 05:32:36 AM PST

      [ Parent ]

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