Protect Social Security benefits for the long-term by preserving the integrity of COLAs
Tying annual Social Security cost of living adjustments to the Chained Consumer Price Index will reduce benefits. The effect will be cumulative and substantial over time. The current Cost of Living Index should be retained.
The financial situation of seniors has already been eroded. The value of retirement savings had had no chance to keep pace with inflation for 15 years. Homeowners equity has collapsed. Retirees and those nearing retirement shouldnt pay for the mistakes that caused the current unsatisfactory fiscal situation. Social Securitys OASI Trust Fund has had receipts exceeding expenditures for decades. Benefit payments havent added a penny to the public debt. Removing the cap on taxation that exempts income over $110,100 today will ensure Social Security solvency.
The fiscal problems the US faces today were not caused by the Social Security program and Social Security benefits shouldn't be tapped to correct the mistakes that caused the current unsatisfactory situation. Today, 55 million seniors depend on Social Security as their main source, or only source, of income and their number will increase. They need realistic cost of living adjustments that keep pace with inflation.
Ironically, the luckiest seniors are the ones whose nest egg lost value against inflation and in the recession since 2008. Many seniors have no nest egg. The fortunate find little satisfaction with the stock market recovery since the deep low where it fell in March 2009, because there was a lost decade with no growth before that. Inflation eroded savings. Deflation in home values is another worry. And with low interest rates, traditional fixed-income investments don’t pay enough to keep pace with inflation either.
The lucky ones who are screwed all the way around are much better off than the millions of seniors who have no savings or source of income other than Social Security. To nickel-and-dime these folks while income over $110,100 is exempt from the Social Security payroll tax is shameful.
Of course Congress would love to cut benefit payments. The program still runs at a surplus and if it can be extended farther, Congress won’t mind borrowing it for other expenditures. Republicans like Paul Ryan raise concerns when they include statements like this in the budget resolution they passed:
“First, any value in the balances in the Social Security Trust Fund is derived from dubious government accounting. The trust fund is not a real savings account. From 1983 to 2011, it collected more Social Security taxes than it paid out in Social Security benefits. But the government borrowed all of these surpluses and spent them on other government programs unrelated to Social Security. The Trust Fund holds Treasury securities, but the ability to redeem these securities is completely dependent on the Treasury’s ability to raise money through taxes or borrowing."
Nowhere to be found in the three ring circus known as the popular media is any rational discussion about government spending and debt. Why is the deficit a concern today when no one gave it a second thought when the Republicans were in charge? Why has the public lost track of the train of events showing that economic meltdown and recession led to higher spending? Instead, the public buys a false narrative that reverses the timeline to say that increased spending will lead to financial collapse. Tried and true sound economics already proved long ago that spending and deficits are called for during recessions. There are also the illustrative European examples of today as reminders that austerity will only makes matters worse.