Update to yesterday’s blog post “Fiscal hawks’ double standard for Social Security cuts vs. tax cuts”
This is an update to yesterday’s blog post “Fiscal hawks’ double standard for Social Security cuts vs. tax cuts.”
The Committee for a Responsible Federal Budget (CRFB) subsequently updated the table in their blog post, adding a column with average scheduled (i.e., promised) initial Social Security benefits for 2050. This is certainly an improvement, but their revised table still only depicts the relative comparison between initial benefits under the Bowles-Simpson plan and payable benefits. Here’s what their table would show with the additional relative comparison between initial benefits under the Bowles-Simpson plan and scheduled benefits (the lightly shaded column).
Under the Bowles-Simpson plan, medium earners reaching the normal retirement age in 2050 would see an initial benefit cut of 6 percent relative to scheduled benefits. And as CRFB duly notes in their blog post, the Bowles-Simpson proposal to use a “chained” consumer price index for cost-of-living adjustments would further reduce all beneficiaries’ benefits in subsequent years relative to scheduled benefits—a benefit cut that compounds annually, as explained in this EPI Briefing Paper.
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