The debate over the debt ceiling is becoming a debate about Social Security. Some Senate Republicans want any debt ceiling deal to include Social Security cuts, while liberal Democrats like Bernie Sanders and Sherrod Brown are saying, "no way."
I'm not excited about a hasty deal to trim Social Security benefits without raising the program's revenues. In fact, 11th-hour deals are precisely what I'd like us to avoid, and putting the burden of deficit reduction on middle-class retirees strikes me as a horrible idea considering that the typical Social Security recipient relies on the program for three out of every four dollars in income.
At the same time, I think progressives are too opposed to even slow-moving incremental changes to Social Security benefits (the commission reduces benefits slowly until 2050), while these same progressives have said they wouldn't mourn the expiration of the entire Bush tax cuts. Let's compare the impact of reduced Social Security benefits in 2050 to the impact of higher middle class taxes for the next 40 years.
The Fiscal Commission would reduce the typical Social Security benefit by about 9 percent by 2050. If you reduced the median Social Security check by 9% today, that would come out to $1,200 of lost benefits a year. On the other hand, letting the Bush tax cuts expire would reduce the typical earner's income by about two percent, or $1,000 in today's dollars, every year for 40 years. The upshot is whether you're talking about slightly higher taxes now or slightly smaller benefits later, you're still talking about slightly less money in the average American's pocket.
Of course we should protect Social Security. But if we draw a bright line around 20% of the budget, it means we'll have to make deeper cuts to other parts of the budget. There's not a big difference between writing somebody a check and asking for one. Letting the Bush tax cuts expire means less money for middle class families; so does reforming Social Security. Why are some folks so often for the former and not the latter?
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