Today on Fox Sen. Lindsey Graham (R-SC) flat-out blackmailed Pres. Obama and congressional Democrats:
I cannot in good conscience raise the debt ceiling without addessing the long-term problems of this country. And I will not.
Graham wants “meaningful entitlement reform,” that is, raising the age of retirement for Social Security, means testing and (downward) changes in the way benefits are calculated. In other words, in exchange for keeping the country solvent, he would use various measures to decrease benefits for the elderly and the sick.
As for raising the retirement age, Nobel laureate economist and Social Security expert Peter Diamond scoffs at the idea:
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.
Are you laughing yet? Furthermore, the savings would be slim indeed. In Tossing seniors over the fiscal cliff I outlined the human and fiscal costs of raising the eligibility age for Medicare and Social Security. The short-term Medicare savings would become much greater expenses shifted onto others— not eliminated.
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.
All in all, Sen. Graham’s proposed remedies for lowering the deficit are a very, very bad idea.