Deficit commission target: Social Security

By Will Parry

At our deadline it appears that the so-called debt reduction plan emerging from the secret deliberations of Obama’s National Commission on Fiscal Responsibility and Reform will not get the 14-vote super-majority needed to send it to Congress for an up-or-down vote.

But hold the cheers. The plan is likely to get the support of a majority of the commission’s 18 members, and may become a blueprint for future action by Congress.

In any event, its destructive provisions will poison the political atmosphere as the nation grapples with stark economic realities: More than 25 million unemployed, and millions underwater in their mortgages or facing the prospect of losing their homes to foreclosure.

At the heart of the scheme released by commission Co-Chairs Alan Simpson and Erskine Bowles is its attack on the integrity of Social Security. As economist Dean Baker points out:

“It is striking that the co-chairs felt the need to address Social Security, even though it was not part of their mandate. The commission’s mandate was to deal with the country’s fiscal problems. Since Social Security is legally prohibited from ever spending more than it has collected in taxes, it cannot under the law contribute to the deficit.

“Their proposal would cut benefits for tens of millions of middle class workers who are overwhelmingly dependent on Social Security for their retirement income. It would also raise the retirement age for lower income workers who have seen little increase in life expectancy.”

This august body has earned a reputation as “the Catfood Commission,” in view of the impact of its plan on seniors’ living standards.

The Simpson-Bowles scheme did not go unchallenged. The progressive policy organizations Demos, the Economic Policy Institute, and the Century Foundation released a proposal that “stabilizes debt as a share of the economy without demanding draconian cuts to national investments or to vital safety net programs.”

A separate coalition of labor leaders, liberal groups and economists – the Citizens’ Commission on Jobs, Deficits and America’s Economic Future – released a similar plan.

Both plans were comparable to that submitted by Rep. Jan Schakowsky (D-IL), the one commission member to emerge as a staunch champion of Social Security. (See story on Schakowsky’s plan.)

All three progressive proposals call for immediate additional stimulus spending, for financing additional unemployment benefits, for public works projects, and for substantial aid to state and local governments, both to prevent further layoffs of teachers and other public employees and to finance “pro-growth” investments in education, infrastructure, child care and scientific research.

Such stimulus spending is absent from the Simpson-Bowles scheme, with its misguided focus on the federal deficit.