Democrats on the House Ways and Means Committee asked Social Security Chief Actuary Stephen C. Goss to evaluate Social Security reform proposals that have been suggested and might be under consideration by the Catfood Commission II, and whether they would affect current beneficiaries. Most of the politicians putting plans forward have insisted that they will hold current and near beneficiaries harmless, that it will only be future beneficiaries that are hurt.
Not so much, says Goss.
(Source: Ways and Means Committee, via e-mail)
WASHINGTON – Any cuts to Social Security imposed by the Joint Select Committee on Deficit Reduction would be borne almost entirely by current Social Security beneficiaries and those who are very near retirement, a new analysis by Social Security Chief Actuary Stephen C. Goss makes clear. Three-quarters of all Social Security payments between 2012 and 2021—the 10-yearperiod in which the Select Committee is required to generate deficit reduction—will go to current recipients, while an additional 21 percent will go to Americans who are very close to retirement-age and will start receiving benefits between 2012 and 2019, according to the Actuary’s analysis.
The analysis highlights that there is virtually no way for the panel to use Social Security cuts to meet its target without harming current beneficiaries. Current retirees have struggled in recent years because there was no cost-of-living adjustment (COLA) in 2010 or 2011. The Social Security Administration yesterday announced a 3.6 percent COLA for 2012.
Any changes made to Social Security by the Catfood Commission II now, intended to reduce the deficit in the next decade, would have to hit current beneficiaries, the people who are reeling now from decimation of their pensions, devaluation of their IRAs or 401(K)s, and dramatically reduced equity in their homes because of this ongoing recession.