On December 3rd, 2010, the Strengthen Social Security Campaign issued a press release regarding the US deficit commission vote. Text is below
Huge Cuts to Social Security Blocked by Failure of Fiscal Commission
Washington, D.C. — An ill-conceived Fiscal Commission proposal that slashes Social Security’s benefits for the middle class and radically transforms the program, failed today to get the 14 votes required to put the measure before the U.S. Senate and House of Representatives.
Beginning in 2012, the plan would reduce the COLA for 54 million people now receiving Social Security, even though the COLA should be increased because it does not keep pace with health care costs. Retirement ages, already rising from age 65 to 67 would be further raised to 69. Early retirement at age 62 and 63 would be eliminated. Overall, benefits would be cut by as much as 36 percent for young Americans entering the workforce today.
“Social Security is overwhelmingly popular because it has always provided a fair return on the contributions made by workers and their families. This proposal ends that fairness,” said Nancy Altman, Co-Chair of the Strengthen Social Security Campaign. “The commissioners who voted for these radical cuts to Social Security are totally out of touch with the American people. Poll after poll has shown that Americans across the political spectrum reject these radical, middle-class benefit cuts.
“Under the guise of deficit reduction, this package dramatically changes the structure of Social Security and weakens the economic security it provides,” noted Altman. “Instead of fixing a program that has worked successfully for 75 years, they have proposed to break it.”
The plan uses a hard-to-understand change to Social Security’s benefit formula that eradicates fundamental features present since Social Security’s creation – the more workers contribute, the higher their benefits – so that all workers are guaranteed a fair return on their contributions.
Under the proposal, a 25-year old, low-income worker earning a career-average wage of $19,000 a year would actually receive a lower monthly benefit than a worker earning $11,000, despite having paid higher payroll taxes. If the worker were medium-income, earning $43,000, her benefits would be cut by $1,950 a year (in 2010 wage-indexed dollars) and replace just 30 percent of pre-retirement pay. Those earning $70,000 would have their benefits cut by more than $5,000 a year, and those benefits would replace just 21 percent of pre-retirement pay. Those earning more would lose even higher dollar amounts and percentages of pre-retirement pay.
The Social Security cuts may have played a decisive role in the failure to achieve the required 14 votes. At least four of those who voted no – U.S. Senator Max Baucus (D-MT), Rep. Xavier Becerra (D-CA), Rep. Jan Schakowsky (D-IL), and Andy Stern, opposed the Social Security cuts proposed in the plan.
Story Transcript
MALAK BEHROUZNAMI, REPORTER (VOICE-OVER), TRNN: The political action committee PDA, Progressive Democrats of America, declared Tuesday, November 30 national call-in day to say no to Social Security and Medicare benefit cuts proposed by former Senator Alan Simpson and President Clinton’s former chief of staff, Erskine Bowles, cochairman of the deficit commission on fiscal responsibility put together by President Obama. In addition to call-ins, which, according to PDA members, shut down Congress’s switchboards twice today, members of PDA came to DC to lobby Congress to cut military spending. Amongst the lobbyists was Donna Smith, community organizer for the California Nurses Association and national cochair of PDA.
DONNA SMITH, COMMUNITY ORGANIZER, CALIF. NURSES ASSOC.: Social Security and Medicare, we understand, are going to be under attack from the deficit commission and this ill-advised effort to try and balance the federal budget on the backs of programs that aren’t the problem with the federal deficit. So we’re here to let them know loudly and clearly with a large coalition of people that that’s not the way to balance the budget, it’s not a way to cut the deficit.
BEHROUZNAMI: Jan Schakowsky, one of the 18 members comprising the deficit commission, was approached by PDA. Schakowsky submitted a report of her own to counter the Simpson-Bowles proposal.
REP. JAN SCHAKOWSKY (D-IL-9): My plan leaves the middle class alone and low-income people alone, and that’s because when we talk about shared sacrifice, there has not been shared sacrifice until now, there’s not been shared opportunity until now. Really, over the last two decades, ordinary Americans have been lucky to stay even. Many of them have seen their income decline. And now we have the biggest disparity between the rich and poor in this country. And so we can solve the debt and the deficit problem first by creating jobs and second by making sure the people who pay for it are the ones who enjoy the party.
BEHROUZNAMI: While there are some points of agreement amongst the reports, such as cuts to the defense budget, their approaches vary.
SCHAKOWSKY: I took some of my things from the report, from the Simpson-Bowles report. The good news is that everyone seems to agree that the defense budget does need to be cut. I went about 10 percent further. The Bowles-Simpson plan cut about $100 billion from the defense budget, although it also did it by freezing military salaries and cutting military health care. Can you imagine? And also tax expenditures. Those are those deductions that affect, again, mostly wealthy Americans. They get rid of all of them. I take those that affect the wealthy the most. And so there are a number of things that I think we agree on, but the philosophy is very different.
BEHROUZNAMI: According to the Labor Department, unless Congress reinstates federal extended benefit programs, 2 million people stand to be cut from unemployment insurance benefits by the end of this year. Representative Schakowsky spoke against the termination of these benefits.
SCHAKOWSKY: The other thing we need to do right now, this week or in the next few days, is to make sure that the 2 million people who lost their unemployment, starting this very day, are able to have money in their pockets, and that we extend unemployment insurance benefits. And it’s not just good for those individuals; again, it is good for the economy. Those are the people who are going to go out and spend the money, create demand. You know, they talk about the job creators are these rich people. Well, they’ve had money. Where are those jobs that they’re creating? They’re not creating jobs, neither are small businesses, until people are going to buy things. And they aren’t going to buy things if they don’t have money in their pocket.
BEHROUZNAMI: Schakowsky’s plan challenges economic models that have not fulfilled their aim of economic prosperity and growth across the board. The representative takes a direct shot at the Republicans’ defense of the Bush tax cuts.
SCHAKOWSKY: What we need to act on are living wages, so that in this country people can have a–that this be a high-wage economy where people can have a good standard of living. And that’s what is going to spur businesses and growth in our economy. I mean, if you believe, as I do, that the engine of the economy is, from the bottom-up, people having money that they can spend, then, you know, we can have prosperity. But it’s incredible how resilient this notion of trickle-down is. It’s just amazing to me that even though we have seen that not work as recently as a couple of years ago, and even now, they stick to their message. Well, we have to be even more resolute.
BEHROUZNAMI: Members will have until Friday, when the final vote takes place, to reflect on the revised draft.
End of Transcript
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