Economics Magazine

Cut Social Security To Fix Deficit Is Wrong

Posted on the 20 December 2012 by Jobsanger
Cut Social Security To Fix Deficit Is WrongDur ing the presidential campaign, and again when the "fiscal cliff" negotiations began, President Obama promised that he would not agree to any cuts to Social Security as a part of any compromise. He is now backing down from that promise. He has now said he might agree to change the way cost-of-living-raises are figured for Social Security payments. Currently, the raises are figured on the inflation rate, which would protect the buying power of Social Security recipients. The change would go to something called "chained CPI", which is a more complicated formula that would result in raises lower than the inflation rate.
While it is true that the change would be small for any single year, it would add up when applied year after year until it had significantly hurt the buying power of those who depend on their Social Security checks to live. The president may not want to call this a benefit cut to Social Security, but that's exactly what it is -- a cut to future benefits that would harm the elderly.
I have to admit that I don't understand why the president is even allowing a discussion of Social Security to begin with. The whole "fiscal cliff" mess, which was agreed to by both the Congress and the president, was an effort to lower the deficit. Personally, I don't think we should worry about the deficit until we fully pull the economy out of the recession and start creating lots of new jobs (and I'm talking about Main Street, since the recession is already over on Wall Street). But even if the government wants to do something about the deficit right now, it makes no sense to talk about cuts to Social Security.
The deficit concerns discretionary spending -- the spending that is funded through income and other taxes. But Social Security has never increased the deficit by as much as a single penny. That's because it is funded fully through the payroll tax called FICA deductions (which go straight into the Social Security Trust Fund). In other words the government is talking about benefit cuts to help the deficit from a program that has never added anything to the deficit. That doesn't make sense.
It's time for the public to demand that Social Security benefits be protected, and while we're at it, Medicare and Medicaid and Veteran's benefits should be protected also. Cutting benefits for any of these programs is just too high a price to pay. How about eliminating billions in unneeded corporate subsidies? Those corporations are making record-breaking profits, and could easily afford to do without those subsidies. But the elderly, the poor, and our veterans need the government to fulfill the promises made to them -- many times to maintain their lives at a barely decent level.
Cut Social Security To Fix Deficit Is Wrong

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