That news? The President has flip-flopped yet again on Social Security. As of yesterday, it now appears the President is once again willing to cut Social Security benefits immediately, even though he’s said Social Security isn’t a driver of the debt and should not be a part of the deficit debate.
Here’s the how the flip has flopped over the past three months:
“Over the past two years, the White House had made it clear in budget negotiations that it was open to Social Security benefit reductions as part of a larger deal that included tax hikes. Yet on Monday, White House spokesman Jay Carney appeared to back up Durbin's position, suggesting a "separate track" be used to reform Social Security. "We should address the drivers of the deficit, and Social Security currently is not a driver of the deficit," he said.”… Huffington Post, November 2012
This “I support a separate track because Social Security isn’t the problem” perspective is also what President Obama told NCPSSM President, Max Richtman, and other advocates in a November White House meeting.
But here are yesterday’s White House comments on Social Security:
“Q: But I just want to be clear what you said at the beginning of that answer, which is the President --
MR. CARNEY: It is not our --
Q: -- as part of an overall balanced approach, he does not rule out effectively reducing benefits for Social Security recipients?
MR. CARNEY: He has put forward a technical change as part of a big deal -- and it’s on the table -- that he put forward to the Speaker of the House. The Speaker of the House, by the way, walked away from that deal even though it met the Republicans halfway on revenues and halfway on spending cuts and included some tough decisions by the President on entitlements. The Speaker walked away from that deal.
But as part of that deal, the technical change in the so-called CPI is possible in his own offer as part of a big deal.”
For those who don’t speak politician, that means even though we know cutting Social Security benefits as a part of a deficit deal makes no sense, we’re going to do it anyway in the name of “shared sacrifice”.
Catch what’s being done here? The White House is repeating the same flawed logic offered by Washington’s billion dollar anti-entitlement lobby that “shared sacrifice” means retired veterans, people with disabilities and retirees living on the average $14,000 Social Security benefit (which they contributed throughout their working lives) must see benefit cuts before Washington will even talk about trillions of dollars in corporate tax loopholes and giveaways to multimillionaires.
“How do you explain to a senior that we’re doing this, asking you to sacrifice, but we’re not saying that corporate jet owners should lose their special tax incentive; we’re not saying to oil and gas companies who are making record profits that they should forego these huge subsidies that taxpayers provide? That’s not fair and it’s not good economics.” Jay Carney, White House spokesman
This false equivalency pretends that a tax dollar lost to a millionaire or huge corporation is the same as a benefit dollar lost to a retiree living on $14,000 a year from Social Security. America’s seniors know that’s not a fair and balanced approach, it’s not sensible reform and it’s not the path to economic recovery”…Max Richtman, NCPSSM President/CEOLet’s be clear what this so-called “technical change” really is. The "Chained CPI", will cut the annual cost of living allowance (COLA) by 3% for workers retired for ten years and 6% for workers retired for twenty years. This translates to a benefit cut of $130 per year in Social Security benefits for a typical 65 year-old. By the time that senior reaches 95, the annual benefit cut will be almost $1,400. This COLA change would also take effect immediately, impacting retirees now and in the future.
These reductions disproportionately impact Social Security's oldest beneficiaries. These are often women who have outlived their other sources of income, depleted their assets, and rely on Social Security as their only lifeline to financial stability. Claims that the current COLA is too generous are false. The COLA has averaged just 2% over the past five years with 0% for two of those years.
There is a formula that more accurately measures expenses retirees incur. The CPI-E was developed in 1987 to reflect the different spending patterns of consumers age 62 and older. This formula acknowledges health costs have been rising much faster than other expenses, and that those costs represent a much larger percentage of seniors' monthly spending than is the case with other demographic groups. The CPI-E is a more accurate measure of the real-world expenses retirees face than the current COLA formula and far more accurate than the proposed Chained CPI which would cut projected benefits over time.
Contrary to the political spin, this chained CPI proposal isn’t a “tweak” or an “adjustment,” it cuts benefits and raises taxes, largely on the poor and middle class, totaling $208 billion over ten years. $112 billion of those benefits cuts come from Social Security alone with up to $24 billion coming from VA benefits and civilian and military retirement pay cuts.
Sound fair, equitable or reasonable to you?