Cutting back Social Security for those who need it most

“Courage and sacrifice for thee, but not for me.” — Ezra Klein

The rationale that people live longer today and therefore can work longer ignores the fact that it’s only Americans with high incomes whose life expectancy has been extended. On average, people  who retire at 62 have lower incomes and die younger than the wealthy and people who retire later.

There are many hypotheses to explain this. Lower-income Americans can’t afford quality (or sometimes any) health care or healthy eating (much more expensive than eating MacDonald’s fare). They smoke more and are more likely to have diabetes. They may do manual work— what do you think would age you sooner, laying bricks outside in the summer or sitting at a desk in an air-conditioned office? Raising the retirement age to 70, for example, not only forces the most needy to work longer, it would also deprive them of a guaranteed income for up to eight years. 

Proponents of raising the retirement age, i.e., the age of eligibility for full and/or partial benefits, to save Social Security, haven’t done the math. Cutting benefits doesn’t save nearly as much as raising the income tax cap. The Congressional Budget Office has projected that raising the income tax cap or tax rate (providing more revenue) would keep Social Security solvent twice as long as reducing benefits by raising the federal retirement age.

Nobel laureate economist and Social Security expert Peter Diamond scoffs at the idea of raising the retirement age:

If anyone stood up and said, ‘Instead of doing uniform across the board cuts, let’s make them a little worse for people who have shorter life expectancies and lower earnings,’ they’d be laughed at.

What’s to be done? Provide Social Security with more revenue and fewer benefit cuts. But don’t count on Republicans. Given Mitt Romney’s admitted disdain for the 47 percent of Americans who pay no income tax, it’s no wonder that he would let them take a hit by giving them fewer benefits rather than raising the rate or the cap of income tax, which would most affect the wealthy.

2 Comments

Filed under economy, Health, Politics

2 responses to “Cutting back Social Security for those who need it most

  1. Pingback: Tossing seniors over the fiscal cliff | V B I

  2. Pingback: Sen. Graham, Social Security’s not the problem | V B I

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