Apparently All the Super Committee Can Agree On is America’s Seniors Should Pay for Deficit Reduction
The new deficit reduction plan being proposed by some Democrats on the Super Committee proposes even more Medicare and Medicaid cuts than the draconian Bowles-Simpson plan and even less in revenue increases. Yes, you read that right?this is a Democrat?s plan. The Center on Budget and Policy Priorities has this analysis:
The new deficit-reduction plan from a majority of Democrats on the congressional Joint Select Committee on Deficit Reduction (the “supercommittee”) marks a dramatic departure from traditional Democratic positions ? and actually stands well to the right of plans by the co-chairs of the bipartisan Bowles-Simpson commission and the Senate’s “Gang of Six,” and even further to the right of the plan by the bipartisan Rivlin-Domenici commission. The Democratic plan contains substantially smaller revenue increases than those bipartisan proposals while, for example, containing significantly deeper cuts in Medicare and Medicaid than the Bowles-Simpson plan. The Democratic plan features a substantially higher ratio of spending cuts to revenue increases than any of the bipartisan plans.
And just to show you how dysfunctional Washington has become–even with some Democrats serving up middle-class Americans to take an outrageous $475 billion in cuts to healthcare programs, billions more in Social Security benefit cuts through a changed COLA formula, and fewer revenue increases than other so-called ?bi-partisan? plans–it?s still not enough for Republicans who want seniors programs cut even more and no new revenue.All this leads many to wonder, what are these Super Committee Democrats thinking? Richard Eskow wrote this on Huffington Post:
These proposals aren’t just destructive. They’re self-destructive. Pick a poll, any poll, and you’ll see how unpopular these ideas are. Overwhelming majorities of Americans – including a majority of Republicans – oppose cutting Social Security or Medicare to fix the deficits. And strong majorities want higher taxes on the wealthy, a topic which the Super Dems are waffling about.It’s a political kamikaze stunt for Dems to adopt the GOP’s “less government” theme. Ask yourself: If you want some government-cutting done, are you going to hire a Democrat or a Republican? If you want to fire government workers, are you going to hire Mitt Romney – who has a long track record of firing people – or Barack Obama? Every minute spent bragging that “we’ll cut more” is a minute spent convincing people to vote for your opponent. The President’s repeating the mistakes he made during the healthcare and financial reform debates, and he’s turning negotiations over to the same failed crowd. He’s considered the leader of his party, but once again he’s letting the party lead him instead. And when it’s all over the GOP will run the same play it used last year, positioning itself as the party that defended Medicare. These Dems are helping them do it.Which brings us back to the question: Who are they trying to impress? The big-money donors who have pivoted back to the GOP, but will still throw them a few bucks now and then? Billionaire Pete Peterson and the other foundations and think tank benefactors who might them offer sinecures after they retire? Their fellow inhabitants of a warped Washington culture that views Grandma-sacrifice as a totemic act of courage?
So, in spite of all the lofty rhetoric about shared sacrifice and finding a ?balanced plan? from Super Committee members in both parties, it appears cutting benefits for middle-class Americans is –so far–all they can agree on. As for promises that program cuts also wouldn?t hurt current retirees? Those are just as empty. TheSuper Committee seems to believe that changing the cost of living adjustment formula will fly under the public?s radar enough to allow cutting trillions in benefits to future and current retirees. Here?s NCPSSM President/CEO, Max Richtman?s, reaction to the Chained CPI proposal:
?America?s seniors want fiscal sanity returned to Washington; however, there is no justification for cutting Social Security and Medicare benefits as part of deficit reduction. It?s been reported that some Republican and Democratic members of the secretive Super Committee support a plan that would change the way the cost of living adjustment is calculated in order to cut Social Security benefits for current and future retirees. For two years, during the worst economic times of recent history retirees received no cost of living adjustment at all. Yet, apparently even that is considered too much by Washington?s fiscal hawks. Describing billions of dollars in benefit cuts as a simple ?formula adjustment? is just the kind of Congressional smoke and mirrors Americans are angry about.Voters of all ages and political persuasions?82% of Democrats, 73% of Independents, and 58% of Republicans–do not support cutting Social Security and Medicare to reduce the deficit. They know there are ways to reduce the deficit and address the real causes of this fiscal mess without slashing the benefits hard-working Americans have contributed to their entire working lives.? Max Richtman, President/CEO
The Chief Actuary of the Social Security Administration estimates that this reduced COLA, called the Chained CPI, would result in a decrease of about $130 per year (0.9 percent) in benefits for a typical 65 year-old. By the time that senior reaches 95, the annual benefit cut will be almost $1400, a 9.2 percent reduction from currently scheduled benefits. The cumulative effect of these reductions means that the disproportionate impact will be felt by Social Security’s oldest beneficiaries. These are often women who have outlived their other sources of income, and rely on Social Security as their only lifeline to financial stability.A Joint Committee on Taxation report prepared for Congress states that these increases would fall mainly on lower and middle-income taxpayers. For example, the tax liability for those with incomes between $10,000 and $20,000 would increase by 14.5 percent, and 3.5 percent for incomes between $20,000 and $30,000, while those with incomes of $1 million and above would see an increase of only 0.1 percent.Switching to the chained CPI would impact all current beneficiaries.So much for shared sacrifice.