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View Diary: Social Security and David Plouffe: An Action Diary (Updated) (123 comments)

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  •  I have read that article in the past (0+ / 0-)

    and bookmarked it.  When you were talking about a blog I thought it was something I hadn't seen and couldn't find any references to it.  I reread it now, all the way to the end.  I still see her as being in the camp of wanting to raise the retirement age, in spite of the fancy footwork.

    US News has her on audio talking about how entitlement programs are the reason for the deficit.  I think it hurts her credibility that she doesn't mention the defense budget, war costs, or the Bush tax cuts.  

    On thing about the Commission that is troubling (among many) is that it has budget experts like Rivlin, but no Social Security experts.  Krugmanmakes the point that you can think of Social Security as a stand-alone entity that should keep its own fiscal house in order, or as part of the budget.  But you shouldn't switch the frame to serve a desired result.  

    By that I mean, most people think you could close the 22% gap in 2037 by lifting the cap on income subject to withholding, or increasing the amount of the tax, or some combination.  If SS is a stand-along program and a small fix will "save" it to use Rivlin's words, then why not do that?  

    And if it is part of the budget, then the status of the trust funds is of less interest than the over-all health of the budget, and there is no "crisis" specific to SS.  

    If we are going for long-term deficit reduction then it should not be at the expense of entitlement programs that people have paid into with the promise of a return when they turn 65.  Especially given the leaks out of the commission about what they are considering, ie, no defense cuts (except making military pay for their own benefits), no tax hikes, and cuts to SS and Medicare.

    The irony of cutting benefits now to avoid cutting them in 2037 is lost on Alice Rivlin, as far as I can tell.  The SS Commissioner says:

       [A]t a press conference Thursday, Social Security Commissioner Michael J. Astrue, one of the government trustees releasing the report, begged reporters not to scare the public by exaggerating the significance of trust fund exhaustion

       "That does not mean that there will be no money left," Astrue said. At that point, even if Congress took no action, Social Security could still pay out 78 percent of expected benefits from annual revenues. "That would be a bad result, but it is a far cry from having no benefits at all," he said.

    Raising the retirement age is a 15 or 20% cut depending who is arguing it and I'm not going to look for those links now.  If the Commission recommends doing that now, the dreaded shortfall of 2037 will come to seniors decades early.  Maybe I'm missing something, but I just think: how stupid is that?

    Or maybe it's intentional to satisfy other objectives.  Rivlin raises the spectre of Greece, which Eskow and Krugman have derided.  She does say we should want to look good for the markets and demonstrated how tough and responsible we are by taking care of our deficit problems now.  And she keeps coming back to entitlements as the only answer.

    I might be donating $10 to charity, but I don't think it will be on account of my friendly wager.

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