Why Fiscal Cliff Cuts To Social Security Should Be Unacceptable
By Yashwanth Manjunath with comments December 19, 2012 10:39
According to the latest news out of the “Fiscal Cliff” talks, President Obama is backing off his plan to raise taxes on individuals making over $250,000 and has put Social Security cuts on the table, reneging on two critical campaign promises in one offer. Specifically, he wants to incorporate the “chained CPI” into the budget deal. The chained CPI would move Social Security cost-of-living-adjustments (COLAs) to a less generous formula for calculating annual inflation, which would mean significantly smaller checks for grandma and grandpa. It’s probably one of the most painful changes that could be made to the program and hits the disabled the hardest because the current COLA formula already does not account for the fact that rate health care costs are rising above inflation.
Let me be clear, any modification to Social Security during these negotiations should be completely off the table, no exceptions. Social Security is legally incapable of adding to the deficit, which anyone who has actually read the Social Security Act of 1935 would know. It is a pay-as-you-go program that can only spend revenues generated by the payroll tax. Even under the most pessimistic of actuarial assumptions, the program is 100% funded until 2037. But the real kicker is what the American people have to say about the chained CPI. A majority of Democrats and Republicans are opposed to the change.
This newest proposal comes after Speaker Boehner rejected Obama’s last two offers. Where the hell does Boehner get the gumption to do that, and why is President Obama letting him get away with it? Boehner’s party is in the minority in the Senate and actually lost seats in the last election, lost the electoral college by a country mile, and if it weren’t for some of the most egregious gerrymandering we’ve seen in decades, he wouldn’t even be Speaker of the House anymore.
We’re in this budgetary mess because the last Republican President turned a record surplus into a record deficit by starting two wars that were not paid for, passing two tax cuts for the wealthy that were also not paid for, and allowing Wall Street to swindle $7 trillion in middle class assets while driving this country into the worst economic recession in 80 years. Not because the elderly have been living the good life with their monthly $1,230 Social Security checks. It’s time for the priorities of these negotiations to reflect that.