Time is running out to make a deal to avert the dreaded “fiscal cliff” by the year’s end. (We want to take a moment to emphasize that the fiscal cliff is a terrible metaphor that has way too many people freaked out.)
Congressman Raul Grijalva does not like the details of the latest proposals coming out of the talks between President Barack Obama and Speaker of the House John Boehner. (And, as it turns out, Boehner may not like them, either, even though he’s the one negotiating.)
Anyway, here’s Grijalva’s statement today:
Federal law has always prohibited Social Security from contributing to the deficit. Any talk of shrinking the program to ‘save money’ is flawed from the start because Social Security is not part of the national budget in the same way as military spending—it’s paid for through a dedicated payroll tax separate from general budgeting.
Some have suggested that Social Security benefits should be based on a chained Consumer Price Index (CPI), which assumes that when the price of one item rises, people buy something else—no matter how popular or necessary that original item might be. If this change goes into effect, Social Security benefits would stop reflecting the rising prices of popular goods.
The average Social Security recipient rakes in a whopping $13,000 a year. If we pass chained CPI, projected annual cuts for a typical retiree would be about $560 a year by age 75, $984 a year by age 85 and $1,400 a year by age 95.
The less money our Social Security recipients—including 9 million veterans—are able to spend, the less money goes to the businesses that create jobs. Chained CPI makes life harder for millions of retirees, weakens Social Security and doesn’t reduce the deficit by a penny. It’s a Beltway fig leaf that I will never support, and I call on my colleagues to make their feelings known as soon as possible before this becomes yet another piece of conventional wisdom that makes things worse.
Lifting the cap on high earners paying into Social Security is a real fix that would make the program solvent indefinitely. If we want to talk about solutions, let’s talk about that, not inventing reasons to take money from American retirees.
Meanwhile, Jonathan Chait analyzes what the latest offer on the table means:
President Obama came out with a newer and even more conciliatory bargaining offer to House Republicans yesterday, which on the surface appears to be evidence that a big budget deal may be at hand. Obama is offering to drop his revenue target to $1.2 trillion over a decade and is putting a host of spending cuts on the table, including to-be-determined Medicare cuts and a stingier cost-of-living adjustment method for Social Security. Since this is not Obama’s “final offer,” it stands to reason that any agreement with Boehner will move further right.
So should liberals freak out? Maybe a little — but they’re not freaking out over the right stuff.
This article appears in Dec 13-19, 2012.
The reasoning here is completely flawed. By federal law no one can enter the country without documentation so we can’t have illegal immigrants.
The logic here worse. The federal law says that we don’t count Social Security toward the deficit. That doesn’t mean that it doesn’t contribute to it.
“Lifting the cap on high earners paying into Social Security is a real fix that would make the program solvent indefinitely.”
This is simply a lie. No credible resource says that ELIMINATING the cap will make Social Security SOLVENT. Politicians will say anything.
IF the government would quit paying Billions on aid to other countries and stayed out of their politics (Wars) the government would not be in the money crunch that it is in now. If they did that they could pay back the money they have robbed from Social Security over the years!!!!!!!
The US government has taken and average of 80 million dollars from Social Securty to spend on military and other thing instead of leaving those funds where they belong. If that money had been left along it would have been well over 1,000,000,000,000,000 dollars and would make SS very solvent. Get out of other countrys and quit paying them every year, if they would they would not be in the fix they are.
“Federal law has always prohibited Social Security from contributing to the deficit. Any talk of shrinking the program to ‘save money’ is flawed from the start because Social Security is not part of the national budget in the same way as military spending—it’s paid for through a dedicated payroll tax separate from general budgeting.’
So Congressman Grijalva, are you going to stop cosponsoring bills predominantly by Democrats authorizing the theft of Social Security funds for political pet projects and force the theives to replace our funds? Are you going to apologize for being part of that theft? What we need Congressman Grijalva, is a law that forces our elected officials to use the exact system the “WE the people” are forced to use, and no longer allowed to pass laws that exempt elected officials.
Keep illegal aliens and immigrants from tapping into the funds through SSI, and you’ll be well on your way to solving the problem.
Let Joe Economist know — but I suspect he won’t believe — that Social Security is not presently insolvent, and that elimination of the cap on the SS payroll tax will clearly keep SS solvent indefinitely. The cap today is approximately $110,000. Those who make more, and the employers who can afford to pay them more, can surely get by pretty well even while contributing 6% of their total pay as do the vast majority whose wages or salary never exceed the cap.
There is a great deal of misunderstanding about Social Security, Medicare and unemployment benifits put out there by conservatives. Part of the problem is the misnomer, entitlements which imply free government handouts. They are actually earned benefits funded by their beneficiaries. And there are many undocumented workers who pay into the system but will never receive their benefits.