If there's any immutable rule in politics, it should be: beware of candidates who try to be "bold" merely for the sake of looking bold.
Chris Christie, trying desperately to keep his presidential hopes alive, wants to look bold, and he's not above throwing millions of elderly Americans under his campaign bus to do so. That's the only conceivable explanation for the New Jersey Republican governor's misinformed and dangerous proposals to "fix" Social Security.
In his big campaign speech delivered Tuesday in New Hampshire, Christie showed that he doesn't understand what Social Security is for, why it exists, how it's funded, or who gets benefits and why.
His major proposals are to cut off Social Security for high-earning recipients, and to raise the retirement age. Neither would significantly improve Social Security's fiscal condition, and raising the retirement age might even be damaging.
More on that in a moment.
Christie's fundamental premise is wrong. He says, "Washington is afraid to have an honest conversation about Social Security, Medicare and Medicaid with the people of our country."
Maybe he just hasn't been listening, but America has been having honest conversations about Social Security virtually since its enactment in 1935. We had an honest conversation in 1982, when the program was facing a genuine crisis. Under Ronald Reagan, the crisis was addressed and fixed.
We had an honest conversation in 2005, when George W. Bush proposed privatizing the program. That conversation showed that Bush's plan would benefit no one but Wall Street investment brokers, and the outcome was that the plan was scrapped.
We're having an honest conversation now, with lawmakers like Sen. Elizabeth Warren (D-Mass.), observing correctly that Social Security is the only retirement pillar that still works as designed, and in fact should be expanded. Warren and others have placed on the table details about how to do so, what it would cost, and how it would affect today's beneficiaries and tomorrow's.
Christie doesn't want to participate in that conversation. His real complaint is that neither the public nor intelligent political leaders accept that only his nostrums are the right nostrums. So let's take a closer look at them.
Christie imagines that Social Security is merely an anti-poverty insurance program, "there so our seniors, after a lifetime of hard work, don’t fall into poverty."
He's wrong. Social Security was designed from the start as a universal program for all workers, regardless of their income. It's not welfare, it's not designed to be means-tested. Christie wants to make it into a means-tested welfare program, but that's the first step toward killing it.
Accordingly, Christie proposes "a modest means test that only affects those with non-Social Security income of over $80,000 per year, and phases out Social Security payments entirely for those that have $200,000 a year of other income."
This is a truly ancient chestnut, right out of the playbook of hedge fund billionaire Pete Peterson, whose campaign to undermine Social Security I described in 2012.
As Dean Baker and Hye Jin Rho of the Center for Economic and Policy Research showed in 2011, the gain from such means-testing would be virtually invisible. amounting to less than a half of one percent of benefits.
If Christie really wanted to achieve savings by means-testing, he would have to start phasing out benefits for people with non-Social Security income of $20,000-$30,000. If he's not acknowledging that, then it is he who isn't having an "honest conversation" with the American people.
Christie also proposes raising the Social Security retirement age to 69 from 67 at the rate of two months per year, starting in 2022. He would raise the early retirement age to 64 from 62 on the same schedule.
This is another chestnut, and an especially cynical and damaging one. To begin with, every year's increase in the normal retirement age is the equivalent of a 7% benefit cut.
As Kathy Ruffing and Paul Van de Water of the Center on Budget and Policy Priorities explain here, that's because it increases the reduction in annual benefits charged to those who retire early, and reduces the bonus paid to those who defer taking their benefits past the normal age. Raising the retirement age will also prompt older workers to file for disability instead of retirement, which only places more strain on Social Security's already strained disability program.
Moreover, this proposal overlooks demographic and socioeconomic differences in life expectancy. Put briefly, it will pose a disproportionate burden on black workers and especially on black males. Here are the figures: typical workers who have reached the age of 65 can expect to live to the age of 84. For black males, the figure is less than 81. For all whites, the life expectancy from birth is about 79 today. For black males, it's less than 72.
If Christie doesn't acknowledge this, he's not having an "honest conversation" with the American people.
Christie's other proposals aren't any better. He wants to tie Social Security cost-of-living increases to an inflation index known as the chained CPI; we've shown in the past that this isn't a more "accurately" inflation index, as he claims--its only virtue is that it rises more slowly than the currently used index, so it's a stealth benefit cut.
In sum, Christie's Social Security plan certainly is bold, but once you've said that you've said everything. Judged for fairness of effectiveness, it's a mousy little weakling.