The Wall Street Journal is reporting what we've all been expecting out of the Catfood Commission--they're looking to Social Security cuts.
The panel is looking for a mix of ideas that could win support from both parties, including concessions from liberals who traditionally oppose benefit cuts and from Republicans who generally oppose higher taxes, according to one member of the commission and several people familiar with its deliberations.
In addition to raising the retirement age, which is now set to reach age 67 in 2027, specific cuts under consideration include lowering benefits for wealthier retires and trimming annual cost-of-living increases, perhaps only for wealthier retirees, people familiar with the talks said.
On the tax side, the leading idea is to increase the share of earned income that is subject to Social Security taxes, officials said. Under current law, income beyond $106,000 is exempt. Another idea is to increase the tax rate itself, said a Democrat on the commission.
Republicans on the commission, of course, oppose tax increases, and Democrats opposed to any cut in benefits. Meanwhile, the WSJ says, "the White House and the powerful senior group AARP appear open to a deal," quoting an AARP official.
"We're prepared to be quite supportive of a real engagement on the issue," said John Rother, director of public policy for AARP. Acting sooner allows for changes to be made gradually, he said, and will reassure younger workers that the program will be there for them. He dismisses those who said they can never support benefit cuts. "I know all these people personally and they'll say we have to be hard line now to influence the debate...I kind of take it with a grain of salt, these emphatic statements."
Perhaps AARP experienced some pushback from their membership as a result of that statement, because they issued another, fuller statement from Rother in the wake of the article.
“AARP has long said that addressing Social Security's long-term financing is important, but it must be done with the goal of achieving retirement security, not deficit reduction. Social Security hasn’t contributed a single dime to the current deficit. It is financed separately from the rest of the federal budget with contributions Americans make over a lifetime of hard work. Any attempts to cut Social Security benefits to reduce a deficit it didn’t cause would undermine retirement security and place an unfair burden on future generations.
“AARP renews its call on both parties to act in the coming few years to shore up the system’s long term ability to pay promised benefits to retirees, survivors, and those with disabilities. We should not wait for a crisis to develop to act – Americans should be confident that their earned benefits will be there for them when they need them...."
So AARP remains committed to working with the Commission to stave off a crisis. One hopes that they are as committed to protecting future generations of AARP members. And that the White House isn't going to follow what would be hugely unpopular recommendations from the deficit commission for Social Security cuts in order to build some sort of "credibility" or political consensus with Republicans.