Category Archives: Social Security

Social Security Changes Could be in Deficit Proposal, Durbin Says

Lawmakers “shouldn’t be so quick to rule out changes or cuts to Social Security, a top Senate Democrat participating in bipartisan Gang of Six talks says in a new interview,” The Hill reports.

Sen. Dick Durbin (D-Ill.), the majority whip who’s negotiating with two other Democrats and three Republicans on a major deficit-reduction plan, broke from more liberal members of his party, who want to safeguard Social Security from any changes.

Durbin said he wouldn’t be signing on to a "Sense of the Senate" resolution by Bernie Sanders (I-Vt.), a liberal who caucuses with Democrats, saying that benefits should not be cut. And he warned that revisions to the program, such as means-testing benefits for wealthier Americans, could be among the changes suggested by the negotiators.

"If we deal with it today, it’s an easier solution than waiting. I think we ought to deal with it. Many of my colleagues disagree, [and would] put it off to another day," Durbin said of Social Security in a video interview with ABC News posted Tuesday. "But from my point of view, leaving it out makes it easier politically — including it, I think, meets an obligation, which we have to senior citizens."

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Coburn, Warner Confident Deficit Reduction Plan Will be Disliked

Two Senators said today their deficit reduction plan “will tick off a lot of people,” Fox News reports.

Two members of the so-called "gang of six" — a bipartisan group of senators working to craft a long-term spending plan — said Sunday they’re making progress on their proposal, despite concerns expressed last week that the talks could be in trouble.

And, in claiming the plan would take a balanced approach, they predicted Republicans and Democrats alike would despise it.

"Let me assure you, we’re going to make everybody mad," Sen. Mark Warner, D-Va., said.

Tom Coburn (R-OK):

"Nobody is going to like what we come up with," Coburn told "Fox News Sunday." "The left isn’t going to like it and the right isn’t going to like it. And that’s one thing that would be an indicator that is probably the best compromise we’re going to be able to get."

Some things being considered in the proposal:

Coburn did not elaborate on the details of the plan, but Warner offered a few glimpses.

In an interview with CBS’ "Face the Nation," he said "everything has to be on the table."

Warner said the group was working off the proposal from the president’s fiscal commission and would be "touching every part of the problem," including Social Security — something largely excluded from both Ryan’s proposal and Obama’s.

"Part of this is just math — 16 workers for every one retiree 50 years ago, three workers for every retiree now," Warner said.

He also said the tax code needs to be addressed, not necessarily through tax increases but by eliminating deductions. He said the group is looking to impose about $3 in cuts for every $1 in increased revenue.

"Charitable deduction, home mortgage deduction — if we would cut back on some of those, we could actually lower rates and still increase revenues," he said. Warner said the group is "very close" to a deal.

Timing:

The "gang of six" is not expected to have a report until after the two-week spring recess that starts Monday. The other members on that panel are Sens. Dick Durbin, D-Ill.; Saxby Chambliss, R-Ga.; Kent Conrad, D-N.D.; and Michael Crapo, R-Idaho. Conrad threatened last week that if the group doesn’t come up with something soon, he might propose his own budget plan.

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Republican Senators Would Raise Retirement Age in Social Security Reform Measure

Three Republican Senators “on Wednesday will propose a Social Security reform package that would raise the retirement age to 70 and cut benefits for the wealthy,” The Hill reports.

Sens. Lindsey Graham (S.C.), Rand Paul (Ky.) and Mike Lee (Utah) previewed their proposal on Fox News, saying that it will put the entitlement program on a long-term path to solvency without raising taxes.

The senators said that their plan would gradually raise the retirement age from 67 to 70 and would not affect individuals age 56 or older. Graham said that the proposal uses the same formula Congress used to raise the retirement age from 65 to 67, so that people born in 1970 would become the first group to have a retirement age of 70.

Senator Lee said that the “group would like to see the plan brought up this year, but that he would not move to attach it to other legislation.”

"This is a long-term problem. This doesn’t have to be inserted with the continuing resolution or in connection with the debt ceiling. This is something, nonetheless, we need to address this year," he said.

Comparison with debt commission proposal:

President Obama’s debt commission suggests similar changes to Social Security: raising the full retirement age to 69 by 2075 and cutting benefits for upper-income Americans.

Unlike the debt commission’s proposal, the GOP plan does not call for a payroll tax hike to bolster the trust fund.

Update: These three Senators have officially introduced their plan, called the Social Security Solvency and Sustainability Act. A press release provides further details:

  • Reduces debt held by the public by $6.2 trillion by 2085.
  • Eliminates the current difference of $5.4 trillion between benefits promised and what Social Security can actually pay.
  • Creates a solvent and sustainable Social Security system that will be able to provide the benefits it promises to future generations without raising taxes.
  • Gradual Increase in the Social Security Retirement Age – The senators propose a gradual increase in the Social Security full retirement age to 70 by 2032. 
  • Indexing the Retirement Age to Longevity – When retirement age of 70 is achieved, the full retirement age will then be indexed to increases or decreases in life expectancy.  Indexing will help maintain a constant ratio of years worked to years spent in retirement. (see attached chart detailing current law and Social Security Solvency and Sustainability Act retirement age)
  • Gradual Increase in the Early Retirement Age – The senators propose a gradual increase in the Social Security early retirement age from 62 to 64 by 2028.
  • Slower Benefit Accumulation for Higher Lifetime Earners – After 2018, all new retirees coming into the system will have benefits based on the first $43,000 of their average lifetime yearly earnings calculated based on wage growth.  Above $43,000, benefits will be calculated based on price growth.

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Graham, Paul and Lee to Introduce Social Security Reform

According to a media advisory sent out today, Senators Lindsey Graham (R-SC), Rand Paul (R-KY) and Mike Lee (R-UT) will “introduce their plan for Social Security reform tomorrow.”

Update (4/13): Further details here.

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On Deficit Reduction, Respective Senate Leaders Want Taxes and Social Security Left Alone

Meeting with reporters today after a weekly caucus meeting, Majority Leader Harry Reid (D-NV) said he wanted Congress to “leave Social Security alone” when it comes to any proposed deficit reduction plan. He noted that the program did not add to the deficit.

Meanwhile, Minority Leader Mitch McConnell (R-KY) told reporters that from his point of view, adding revenue to pay off some of the debt by increasing taxes was “not on the table.” He believes that the problem centers on spending and not a lack of taxation.

Neither of these statements are new, but they are noteworthy as members of Congress and the President enhance their efforts to craft deficit reduction proposals ahead of a debt ceiling vote.

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