Touching the ‘third rail’


Alan Simpson and Erskine Bowles, the co-chairs of President Obama’s deficit commission, have signaled for months that they are not friends of Social Security. In August, Simpson, a former Republican senator from Wyoming, wrote that Social Security is “a milk cow with 310 million tits.” Last February, Bowles, who made his fortune on Wall Street and served as a top aide in the Clinton White House, boasted in a speech to bankers, “We’re going to mess with Medicare, Medicaid and Social Security.”

Earlier this month, the two men released their proposal to reduce the federal deficit, and they’ve delivered on the promise to “mess with” Social Security. The plan will now go to the full commission, where we have to hope wiser views will prevail.

In releasing their plan, the co-chairs went out of their way to make clear that they were proposing changes to Social Security “for its own sake, not for deficit reduction.” This was an acknowledgement that Social Security does not and cannot contribute to the deficit, because it has no borrowing authority and by law cannot pay benefits unless it has sufficient income and reserves to cover their cost. But Simpson and Bowles just couldn’t keep their hands off the program.


One thing they propose is increasing Social Security’s retirement age to 69. Every year that Social Security’s retirement age is increased amounts to a 6% to 7% across-the-board benefit cut for recipients. The retirement age is already being raised to age 67 for those turning 62 in 2022. Increasing the age to 69 would cut benefits by one-quarter from a decade ago, when the retirement age was 65.

The co-chairs also want to increase the early retirement age to 64. Currently, the majority of Americans start claiming benefits at age 62, despite the fact that this means they receive reduced benefits. As a new General Accountability Office report concluded, the people who take early retirement often do so because they work in jobs that are too physically demanding to continue or because they have health problems or can no longer find work. Raising the early retirement age will shut out workers who are disproportionately low income and minority, and it will do it when they are most vulnerable, potentially forcing them to seek disability benefits or welfare.

Bowles and Simpson argue that we should raise the retirement age because people are living longer. But not everyone is. Over the last quarter-century, life expectancy of lower-income men increased by one year, compared to five for upper-income men. And lower-income women have experienced declines in longevity.

The co-chairs apparently think most Americans can work as long as politicians, Wall Street billionaires and others who have all of life’s advantages. In effect, the Bowles-Simpson plan says to America’s workers that they must work longer for less because the rich are living longer.

In addition to raising the retirement age, the Bowles-Simpson plan would reduce benefits to all future recipients who earned at least $20,000 a year before collecting Social Security. This change, like their proposal to raise the retirement age, would hit today’s youth the hardest. The 20-year-olds who are just entering the workforce would see their eventual benefits cut by as much as 36% compared to those of people retiring now.

But Bowles and Simpson do not just target the young. They also propose cutting the cost-of-living adjustment for those now receiving Social Security. If anything, the adjustment should be increased, because it does not adequately take into account skyrocketing medical costs, which hit seniors and people with disabilities hardest.


For all the talk of polarization, the American people are clear and united about Social Security. A recent poll of those who voted in the midterm election found that 67% of respondents opposed cuts in benefits; 69% opposed raising the Social Security retirement age to 69. Respondents were also clear about what steps should be taken to address a looming shortfall. Some 66% of those polled favored doing away with the current cap on payroll taxes to fund Social Security. Currently, taxpayers are taxed only on their first $106,800 in income. Simply requiring upper-income taxpayers to pay the tax on all their income would bring in enough revenue to allow benefits to be raised across the board and still have the program in balance for at least the next 75 years.

Social Security is fair, secure, effective and efficient, but its benefits are inadequate, averaging less than $13,000 a year. Despite their modest size, those benefits are vitally important to almost all who receive them. Two-thirds of the elderly and more than 70% of disabled beneficiaries receive half or more of their income from Social Security.

The message of the midterm election is that the American people are fed up with Washington elites who don’t seem to listen. Despite the clear view of the American people, the elites in Washington seem to think it would be better to reduce benefits than to require the wealthy to pay the same percentage of their salaries into Social Security as everyone else does.

If politicians choose to cut Social Security benefits, when they could simply scrap the cap, we predict that this midterm will seem like a walk in the park compared to what awaits them in 2012.

Nancy Altman, the author of “The Battle for Social Security,” and Eric Kingson, a professor of social work at Syracuse University, co-direct Social Security Works (