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Does President Obama Want to Cut Social Security by 3 Percent?

Monday, 17 September 2012 09:56 By Dean Baker, Truthout | News Analysis

President Barack Obama speaks at a campaign event in Golden, Colorado, September 13, 2102. (Photo: Stephen Crowley / The New York Times) President Barack Obama speaks at a campaign event in Golden, Colorado, September 13, 2102. (Photo: Stephen Crowley / The New York Times) Click here to support news free of corporate influence by donating to Truthout.

That is a pretty simple and important question. Unfortunately, most voters are likely to go to the polls this fall without knowing the answer.

If the backdrop to this question is not immediately clear, then you should be very angry at the reporters who cover the campaign. One of the items that continuously comes up in reference to the budget deficit is President Obama's support for the plan put forward by the co-chairs of his deficit commission, Morgan Stanley director Erskine Bowles and former senator Alan Simpson. On numerous occasions, President Obama has indicated his support for this plan.

One of the items in the Bowles-Simpson plan is a reduction in the annual cost-of-living adjustment of roughly 0.3 percentage points. This would be accomplished by using a different index that, by design, would show a lower measured rate of inflation. It is important to recognize that this is an annual cut that would accumulate over time. After a retiree has been receiving benefits for ten years, the cut would be 3.0 percent; after 20 years. it would be 6 percent. If a typical retiree lives long enough to get benefits for 20, years the average benefit cut over their years of retirement would be 3 percent.

This is the most immediate cut in Social Security in the Bowles-Simpson plan, but it is not the only one. The plan also would gradually raise the age at which retirees receive full benefits to 69. It also phases in a reduction in benefits for workers whose earnings averaged more than $40,000 a year over their working lifetime.

When President Obama indicates his support for the Bowles-Simpson plan, he is indicating his support for all of these measures. Of course, he is not required to accept the plan in its entirety, but if he does oppose the cuts that the plan imposes on Social Security, it would be reasonable to expect him to state this explicitly.

In principle, this would be exactly the sort of issue where we would expect reporters to be grilling President Obama and his staff. After all, while President Obama has been proclaiming his support for the Bowles-Simpson plan, his vice president has been assuring the public that Social Security will not be touched in a second Obama administration.

Last month in Virginia, Joe Biden said in the strongest possible terms that there will be no cuts to Social Security in a second Obama administration. He repeated the statement with the additional line that, "I guarantee it." This would seem to be a pretty clear contradiction of President Obama's support for Bowles-Simpson.

The media should be trying to resolve this contradiction. Then voters could go to the polls knowing whether they are voting for someone who wants to follow Bowles-Simpson and cut Social Security benefits, or alternatively, would pick up the gauntlet thrown down by Vice President Biden and be a rock-solid defender of the program.

One of the reasons that the media may be neglecting its responsibilities in this situation is that many of them favor the cuts laid out in the Bowles-Simpson plan. They don't want to put the Obama administration on the spot because they know that Social Security is hugely popular across the political spectrum. If President Obama were forced to commit himself on whether he supported cuts to Social Security before the election, he would almost certainly say no, since openly supporting cuts could lose him millions of votes.

This sort of attitude was reflected in a recent Washington Post editorial that endorsed the 3 percent cut in Social Security benefits by describing it as a "tweak" to the inflation index rather than a cut in benefits. But it is not the job of the media to conceal the meaning of policy changes so as to better advance an agenda.

Last week, many reporters prided themselves on forcefully asking President Obama's surrogates a question handed them by the Romney campaign: "Are the American people better off today than they were four years ago?"

That made for a great clown show, since the economy was in a state of collapse when President Obama took office four years ago. How is someone supposed to answer a question like that?

Reporters have a chance to do their job and ask President Obama and his spokespeople a real question whose answer will have real meaning to tens of millions voters: "Do you support the Bowles-Simpson cuts to Social Security?"

No one should have to go the polls this fall not knowing whether or not President Obama wants to cut Social Security. If reporters were treated like school teachers, and tens of millions of voters go to the polls not knowing the answer to this question, the reporters would all be fired. But in a country where "double standard" is increasingly the national motto, we shouldn't expect incompetent reporters to be held accountable for the quality of their work.

Copyright, Truthout. May not be reprinted without permission of the author.

Dean Baker

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.

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Does President Obama Want to Cut Social Security by 3 Percent?

Monday, 17 September 2012 09:56 By Dean Baker, Truthout | News Analysis

President Barack Obama speaks at a campaign event in Golden, Colorado, September 13, 2102. (Photo: Stephen Crowley / The New York Times) President Barack Obama speaks at a campaign event in Golden, Colorado, September 13, 2102. (Photo: Stephen Crowley / The New York Times) Click here to support news free of corporate influence by donating to Truthout.

That is a pretty simple and important question. Unfortunately, most voters are likely to go to the polls this fall without knowing the answer.

If the backdrop to this question is not immediately clear, then you should be very angry at the reporters who cover the campaign. One of the items that continuously comes up in reference to the budget deficit is President Obama's support for the plan put forward by the co-chairs of his deficit commission, Morgan Stanley director Erskine Bowles and former senator Alan Simpson. On numerous occasions, President Obama has indicated his support for this plan.

One of the items in the Bowles-Simpson plan is a reduction in the annual cost-of-living adjustment of roughly 0.3 percentage points. This would be accomplished by using a different index that, by design, would show a lower measured rate of inflation. It is important to recognize that this is an annual cut that would accumulate over time. After a retiree has been receiving benefits for ten years, the cut would be 3.0 percent; after 20 years. it would be 6 percent. If a typical retiree lives long enough to get benefits for 20, years the average benefit cut over their years of retirement would be 3 percent.

This is the most immediate cut in Social Security in the Bowles-Simpson plan, but it is not the only one. The plan also would gradually raise the age at which retirees receive full benefits to 69. It also phases in a reduction in benefits for workers whose earnings averaged more than $40,000 a year over their working lifetime.

When President Obama indicates his support for the Bowles-Simpson plan, he is indicating his support for all of these measures. Of course, he is not required to accept the plan in its entirety, but if he does oppose the cuts that the plan imposes on Social Security, it would be reasonable to expect him to state this explicitly.

In principle, this would be exactly the sort of issue where we would expect reporters to be grilling President Obama and his staff. After all, while President Obama has been proclaiming his support for the Bowles-Simpson plan, his vice president has been assuring the public that Social Security will not be touched in a second Obama administration.

Last month in Virginia, Joe Biden said in the strongest possible terms that there will be no cuts to Social Security in a second Obama administration. He repeated the statement with the additional line that, "I guarantee it." This would seem to be a pretty clear contradiction of President Obama's support for Bowles-Simpson.

The media should be trying to resolve this contradiction. Then voters could go to the polls knowing whether they are voting for someone who wants to follow Bowles-Simpson and cut Social Security benefits, or alternatively, would pick up the gauntlet thrown down by Vice President Biden and be a rock-solid defender of the program.

One of the reasons that the media may be neglecting its responsibilities in this situation is that many of them favor the cuts laid out in the Bowles-Simpson plan. They don't want to put the Obama administration on the spot because they know that Social Security is hugely popular across the political spectrum. If President Obama were forced to commit himself on whether he supported cuts to Social Security before the election, he would almost certainly say no, since openly supporting cuts could lose him millions of votes.

This sort of attitude was reflected in a recent Washington Post editorial that endorsed the 3 percent cut in Social Security benefits by describing it as a "tweak" to the inflation index rather than a cut in benefits. But it is not the job of the media to conceal the meaning of policy changes so as to better advance an agenda.

Last week, many reporters prided themselves on forcefully asking President Obama's surrogates a question handed them by the Romney campaign: "Are the American people better off today than they were four years ago?"

That made for a great clown show, since the economy was in a state of collapse when President Obama took office four years ago. How is someone supposed to answer a question like that?

Reporters have a chance to do their job and ask President Obama and his spokespeople a real question whose answer will have real meaning to tens of millions voters: "Do you support the Bowles-Simpson cuts to Social Security?"

No one should have to go the polls this fall not knowing whether or not President Obama wants to cut Social Security. If reporters were treated like school teachers, and tens of millions of voters go to the polls not knowing the answer to this question, the reporters would all be fired. But in a country where "double standard" is increasingly the national motto, we shouldn't expect incompetent reporters to be held accountable for the quality of their work.

Copyright, Truthout. May not be reprinted without permission of the author.

Dean Baker

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.

Related Stories

Social Security and Medicare on the Chopping Block
By Emergency Labor Network, SpeakOut | News Analysis

Hide Comments

blog comments powered by Disqus