Does President Obama Want to Cut Social Security by 3 Percent?
That is a pretty simple and important question. Unfortunately most voters are likely to go to the polls this fall without knowing the answer.
If the backdrop to this question is not immediately clear, then you should be very angry at the reporters who cover the campaign. One of the items that continuously comes up in reference to the budget deficit is President Obama’s support for the plan put forward by the co-chairs of his deficit commission, Morgan Stanley director Erskine Bowles and former Senator Alan Simpson. On numerous occasions President Obama has indicated his support for this plan.
One of the items in the Bowles-Simpson plan is a reduction in the annual cost-of-living adjustment of roughly 0.3 percentage points. This would be accomplished by using a different index that, by design, would show a lower measured rate of inflation. It is important to recognize that this is an annual cut that would accumulate over time. After a retiree has been receiving benefits for 10 years the cut would be 3.0 percent, after 20 years it would be 6 percent. If a typical retiree lives long enough to get benefits for 20 years the average benefit cut over their years of retirement would be 3 percent.
This is the most immediate cut to Social Security in the Bowles-Simpson plan but not the only one. The plan also would gradually raise the age at which retirees receive full benefits to 69. It also phases in a reduction in benefits for workers whose earnings averaged more than $40,000 a year over their working lifetime.
When President Obama indicates his support for the Bowles-Simpson plan, he is indicating his support for all of these measures. Of course he is not required to accept the plan in its entirety, but if he does oppose the cuts that the plan imposes on Social Security it would be reasonable to expect him to state this explicitly.
In principle this would be exactly the sort of issue where we would expect reporters to be grilling President Obama and his staff. After all, while President Obama has been proclaiming his support for the Bowles-Simpson plan, his vice-president has been assuring the public that Social Security will not be touched in a second Obama Administration.
Last month in Virginia, Joe Biden said in the strongest possible terms that there will be no cuts to Social Security in a second Obama Administration. He repeated the statement with the additional line that “I guarantee it.” This would seem to be a pretty clear contradiction with President Obama’s support for Bowles-Simpson.
The media should be trying to resolve this contradiction. Then voters could go to the polls knowing whether they are voting for someone who wants to follow Bowles-Simpson and cut Social Security benefits or alternatively would pick up the gauntlet thrown down by Vice President Biden and be a rock solid defender of the program.
One of the reasons that the media may be neglecting its responsibilities in this situation is that many of them favor the cuts laid out in the Bowles-Simpson plan. They don’t want to put the Obama Administration on the spot because they know that Social Security is hugely popular across the political spectrum. If President Obama were forced to commit himself on whether he supported cuts to Social Security before the election he would almost certainly say "no," since openly supporting cuts could lose him millions of votes.
This sort of attitude was reflected in a recent Washington Post editorial that endorsed the 3 percent cut in Social Security benefits by describing it as a “tweak” to the inflation index rather than a cut in benefits. But it is not the job of the media to conceal the meaning of policy changes so as to better advance an agenda.
Last week many reporters prided themselves on forcefully asking President Obama’s surrogates a question handed to them by the Romney campaign: “Are the American people better off today than they were four years ago?”
That made for a great clown show, since the economy was in a state of collapse when President Obama took office four years ago. How is someone supposed to answer a question like that?
Reporters have a chance to do their job and ask President Obama and his spokespeople a real question whose answer will have real meaning to tens of millions voters: “Do you support the Bowles-Simpson cuts to Social Security?”
No one should have to go the polls this fall not knowing whether or not President Obama wants to cut Social Security. If reporters were treated like school teachers, and tens of millions of voters go to the polls not knowing the answer to this question, then they would all be fired. But in a country where “double standard” is increasingly the national motto, we shouldn’t expect incompetent reporters to be held accountable for the quality of their work.
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16 comments on "Does President Obama Want to Cut Social Security by 3 Percent?"
September 20, 2012 7:04am
The title of this piece may be misleading, implying that the proposal is to cut Social Security benefits by 3%. What is actually proposed is cutting the annual cost-of-living increase by perhaps 3%. This cut would be a tiny fraction of the total expected Social Security benefit, nothing like 3%, unless the other changes proposed are more severe than they seem. If the total expected benefit would be cut by 3%, please explain. I am opposed to this cut, but I am for truth in advertising.
September 19, 2012 1:26am
Obama's failure to say anything explicitly on Social Security is the reason I will vote for someone else in November. Weasel words are not a satisfactory means of communication!
I predict disappointment in Obama will be over the top after he is reelected. He is a Republican masquerading as a Democrat. Even if he has a Democratic majority I expect him to carry on a Wall Street/Koch Brothers agenda in a second term.
I hope I am off the charts wrong. But anyone that would protect the criminal Bush Administration and the banks as he has, is suspect in my mind.
September 18, 2012 11:43am
Dean:
My suggestion in lead paragraph of your article is to change the word used, "continuously" to "continually". Distinct difference between the two has to do with the duration, where continuously suggests that the activity starts and doesn't stop while continally, for example, would be like the girl Friday in the office who all morning long experinced the phones ringing continually with customers calling for one thing or another. You probably know this already but had more important thoughts about the writing.
Glad to be of service.
Yours,
Dibbles
September 18, 2012 11:29am
Perhaps the debates will answer this question. Regardless, Obama is still the better choice as Romney will do worse. Social Security is not the major problem and can be fixed by removing the income cap. Conservatives pushing privatization were humbled by the financial collapse. The age is already being raise by 2 months per year up to and including those born in 1960. That will probably continue. Means testing is not advisable as it would turn SS into "Welfare" - as FDR knew. Both Medicare and SS are supported by most people as most benefit! Medicare is the bigger problem. Already recipients with higher incomes pay considerably more in monthly premiums!
September 18, 2012 11:53am
No, means testing would NOT be "welfare" it would be redistribution of wealth!
But unlike the redistribution that has been in place and accelerating over the last 40 years, means testing SS would be redistribution DOWNWARD!
And we need a HELL OF A LOT MORE of that kind of redistribution.
As Obama being the lesser of two weevils? Bush the Lesser had his damn head handed to him on a platter when he just suggested "privatizing Social Security". It took the wolf in sheep's clothing Obama to actually impact Social Security negatively for the first time since its inception! And you "liberals" just sucked it up!
September 19, 2012 5:59am
I don't necessarily agree that Obama is the "lesser of two weasels" as many disappointed liberals and progressives currently feel. As CHETDUDE points out, Obama has demonstrated a willingness to stomp on Social Security (along with civil liberties while simultaneously coddling Wall Street and the banksters). He certainly can "talk the talk", but if you pay attention to his actions, he "walks the walk" in a diametrically opposite direction to the talk. No, perhaps we should just let Romney, Ryan and the Republicans bring to a logical conclusion what another "R" started 30 years ago. When things get so bad in this country that the great unwashed get their asses off the couch, and only then, will real change take place.
And as a footnote, I can tell you that the puny COLA for SS recipients is already eating us alive. The CPI is a joke for retirees, who are hit hardest by medical expenses, the cost of food and the cost of the gas to get to the store. Inflation in these three areas is now off the charts. What's another lousy three percent?
September 18, 2012 12:28pm
I also disagree with MKLUND's characterizations and repeat a fie on Obama notwithstanding Romney would be worse. Conservatives were not "humbled" by the financial fiasco. Further, the current SS ceiling is in fact "means testing" in reverse. The logic is that if you are wealthy you neither need SS nor would you recoup what you paid in, so screw those who need it.
Regarding Medicare, that those who can afford to pay more are required to pay more is entirely appropriate. Overall, middle and lower-income people pay a HIGHER percentage of their incomes on federal and state income, sales, property, motor vehicle and other taxes and fees than upper-income people, and the nation's wealth has for decades been in redistribution to the wealthy. Below are six facts that provide a glimpse into the origins and scale of the problem:
"In the past 10 years the income of the top 1% has risen by 18%, while that of blue-collar male workers has fallen by 12%; meanwhile,
In the early 1950s, the federal-state-local revenue structure changed from one in which high income tax returns on average paid over 4 times the percentage of the average for the bottom fifty percent; today, the lowest fifty percent pays one-fourth more as a percentage of adjusted gross income (AGI) than the top one percent.
Based on estimated gross income the lowest fifty percent of tax returns, on average, now pay nearly two-thirds more as a percent of total income than the top one percent of tax returns.
The top federal tax rate of 35% is a farce: most wealthy individuals pay nowhere near that level thanks to countless loopholes, the 15% tax on long-term capital gains, and the maximum taxable income for Social Security and Medicare capped at just $110,100 – a nice tax break for the 7.8 million households (a 2009 estimate) with over a million dollars in annual income.
Half the nation’s wealth is excluded from the tax rolls; meanwhile the net worth of the 400 Americans at the top of the wealth pyramid is now greater than that of 150 million on the bottom. (Stop and think just how outrageous that one simple fact is!)
According to the OECD, the US ranks with Mexico and Chile as having the highest level of inequality among the world’s advanced economies, an imbalance that has grown steadily worse since 1985."
September 18, 2012 11:47am
duplicate post thanks to technology...
September 18, 2012 10:52am
Outstanding article.
Having often characterized Obama as the leader of the slow lane of the Repub-Dem superhighway to hell, I agree with the drift of Albert's comment.
I hope Mr Baker will write a follow-on article urging media to press a follow-on question: "Will President Obama prioritize an increase in the withholding ceiling as the primary means of preserving social security?"
The current ceiling is $110,100. No SS tax whatsoever is paid on income above the ceiling, whether that amount is $50,000 or $50,000,000. (Heaven forbid the wealthy should be required to contribute more than a pittance to the survival of retired workers whose cheap labor and consumer spending contributed to their wealth!)
September 18, 2012 11:44am
That means that most of Romney's "middle class", those making over 110K and less than 250K are getting a free ride...
I would suggest LOWERING the payroll tax rate for lower income workers (up to the REAL middle wage of about $50K), REMOVING the cap completely, AND means testing for the very rich.
And STOP TAXING SOCIAL SECURITY for anyone whose gross taxable is less than the median (about $50K)...
And DAMN Obama for even allowing the camel's nose under the tent and allowing Social Security INSURANCE to be placed "on the table" in the first place!
September 18, 2012 10:41am
Just how in the hell did Social Security ever get to be a budget item? SS is it's own program. It is funded from workers and emmployers and not from income taxes. The people should get on their representatives cases and tell hem to stop referring to SS a s a budget item. SS can be fixed very simply by addign 1/2 of 1 percent to the payroll taxes and removing the cap on contributions. Additionally, means testing is not such a bad idea. Why should someone collecing a huge pension also be feeding at the SS teat.
September 18, 2012 12:51pm
Pitch1934 wrote "Why should someone collecing a huge pension also be feeding at the SS teat."
You have some typos, but I think I understand what you mean. I worked over 35 years as a teacher, mostly in Alabama. Alabama public school teachers have to contribute along with the state's contribution to the state's teacher retirement. But at least they know that they can look foward to a decent retirement income when they add teacher retirement to SS. They are sacrificing now (teacher contribution) for a benenfit later. The size of the pension varies (for some, it might be considered huge), but it is based on an agreement the teacher makes with the state. Also, many if not most teachers could earn a significantly higher income in another field. Therefore, I believe it would be wrong to cut these teachers SS benefits. Of course, I don't know how far you want means testing to go or what rules you think should be imposed.
September 18, 2012 11:51am
Exactly...
And stop taxing Social Security if one makes less than the median income!
And actually REMOVE the cap, LOWER the payroll tax rate for those making less than the median income AND means test...
September 18, 2012 9:31am
This is one of the reasons i don't trust Obama any more then i trust Romney.This was his commission,appointed by himself recommending the 3 %cut.Its time most Americans face the truth neither Obama nor Romney give a rats backend care about working people,they both support the very wealthy and nobody else.As i have said many ,many times on liberal web sites.we can go to hell quickly by electing romney or slowly by electing Obama but either weay we are going to hell as a nation.
September 18, 2012 10:13am
I, unfortunately, have to agree with you. Obama was my greatest disappointment of 2009, especially when he selected Emanuel as his Chief of Staff (DLC) and Geithner as his Treasury Secretary (Wall Street Insider). However, at least if we are going to hell slowly, we will have a little more time to teach that "horse to sing." Stranger things have happened!
September 18, 2012 11:52am
And don't forget the execrable author of the collapse, Larry Summers!