Democrats Groovy New Plan to Cut Social Security: Don’t Call It “Cuts”

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Fri Jul-08-11 03:01 PM
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Democrats Groovy New Plan to Cut Social Security: Don’t Call It “Cuts”

Democrats Groovy New Plan to Cut Social Security: Don’t Call It “Cuts”
By: Jane Hamsher
July 8, 2011

Democrats are all unanimous in their opposition to “massive cuts” to Social Security, so they have decided to just call it something else. Brian Beutler at TPM reports:

What’s In A Name? Dems Support Social Security Benefit Cut — By Calling It Something Else
Social Security benefit cuts may be a bridge too far for House Minority Leader Nancy Pelosi (D-CA). But what if Republicans and Democrats alike just agreed to refer to a benefit cut by another name.

That’s how key negotiators have decided to treat one policy proposal, popular in Washington, that would simultaneously raise tax revenues and reduce Social Security benefits. As explained at length here, the idea is to peg federal Cost of Living Adjustments to a new, stingier measure of inflation.

Democratic leadership apparently believes that you won’t be able to figure out what the chart above quite clearly represents: a benefit cut.

http://firedoglake.com/2011/07/08/democrats-groovy-new-plan-to-cut-social-security-dont-call-it-cuts/

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What’s In A Name? Dems Support Social Security Benefit Cut — By Calling It Something Else
By Brian Beutler
July 8, 2011

Experts say the new index (the so-called Chained Consumer Price Index) is a more realistic metric for measuring inflation's impact on peoples' behavior. But the fact remains that if the change goes through as part of a grand bargain to lower deficits and raise the debt limit, retirees will receive less money each month than they're currently promised.

"We make the determinations right now for benefits based upon CPIU," Rep. Jim Clyburn (D-SC), one of the Dems' principal debt limit negotiators. He's referring to the current index the government uses to calculate Social Security's Cost of Living Adjustment. And that's what they're talking about changing. "Now the question is will some other look at CPI make sense? And I think that it makes sense to look at it all to see what is an accurate account, a better way to determine benefits. I certainly wouldn't walk away from that kind of discussion."

Reducing the COLA is something top Obama administration officials have wanted to do for a long time.

"The Consumer Price Indices currently used for indexation employ an outdated procedure that overstate inflation," said Jason Furman, now the Deputy Director of the National Economic Council, in 2007 expert testimony before the Senate Budget Committee. "If all federal programs and taxes were switched to by the end of a decade the government would save more than $40 billion, with the bulk of the savings divided roughly equally between preventing de facto Social Security benefit increases and tax cuts that Congress never intended. Over time the savings would continue to grow."

Read the full article at:

http://tpmdc.talkingpointsmemo.com/2011/07/whats-in-a-name-dems-support-social-security-benefit-cut----by-calling-it-something-else.php