Social Security Freeze Opposed by Moynihan

Sen. Daniel Patrick Moynihan (D-N.Y.) said Friday that he opposes a plan to balance the budget offered by Rep. Dan Rostenkowski because it would cut Social Security benefits for an average retired couple by $3,192 over five years.

Moynihan released an analysis of Rostenkowski’s plan, in which the Illinois Democrat proposes balancing the budget through tax increases, spending cuts and a one-year freeze on annual cost-of-living adjustments to federal retirement programs, including usually untouchable Social Security benefits.

Moynihan said that, if Rostenkowski’s plan were adopted, 400,000 Social Security recipients “would drop below the poverty line.”

He said also that lower Social Security benefits should not be part of any deficit reduction package because Social Security is supposed to be a separately financed insurance plan with no connection to general government spending.

Rostenkowski, chairman of the House Ways and Means Committee, said that his plan, which was generaly praised when announced earlier this week, would balance the federal budget by 1995--a contention that Moynihan disputes.

Moynihan said that an average couple who retire at age 65 in 1990 would lose $588 in Social Security benefits in 1991 if Rostenkowski’s plan to freeze Social Security cost-of-living adjustments became law.

Assuming retirees would be entitled to a cost-of-living increase of 4.5% next year, that amounts to lost Social Security benefits of $49 a month for a couple with annual Social Security benefits in 1991 of $13,548. Over five years, Moynihan said, Rostenkowski’s plan would cost an average couple $3,192 in lost Social Security benefits.