For Immediate Release: Wednesday, July 13, 2011
Contact: Phoebe Silag or Karen Conner, firstname.lastname@example.org 202-775-8810
Debt, deficit deal shouldn’t include Social Security
As talks continue between Democratic and Republican leadership on the federal deficit and debt ceiling, President Obama is facing criticism—much of it from his supporters—for putting Social Security on the bargaining table. Republicans want cuts to mandatory programs, such as Social Security, included in any budget deal that comes out of the negotiations. Facing an Aug. 2 debt ceiling deadline, the president indicated willingness to tinker with Social Security.
Recent work by EPI on proposed changes to Social Security demonstrates why the president should reconsider making any concessions that involve one of America’s most valuable safety nets. Changes such as reducing the cost-of-living adjustments for beneficiaries, raising the retirement age, and capping federal spending would weaken Social Security’s ability to provide adequate benefits for retirees, the disabled, and the others who depend on it.
For comprehensive analyses of these issues, read these EPI reports:
Changing the price index that is used to determine annual Social Security cost-of-living adjustments (COLAs) to a chained consumer price index (CPI) would result in benefit cuts. EPI economist Josh Bivens finds that a move to a chained CPI, often seen by policymakers as a technical change with limited impact, would have a negative effect on retired and disabled Social Security recipients.
Senators Bob Corker and Claire McCaskill have introduced the Commitment to American Prosperity Act (CAP Act), which would phase in hard caps on government spending over a 10-year period and impose sequestration, or an automatic spending cut, if the caps were breached. The CAP Act could severely harm the social safety net, which millions of Americans rely on, as well as harm the economy, especially during downturns like the Great Recession.
The projected shortfall in Social Security is not driven primarily by an increase in life expectancy. EPI researcher Monique Morrissey explains why raising the retirement age is not the key to restoring the system’s long-term solvency.