Congress To Consider Proposals To Make Social Security Solvent Over 75 Years

Sen. Durbin Proposes Social Security Solvency Commission. Democratic Senator Dick Durbin of Illinois announced on March 20 that “he will introduce a bipartisan bill to create a Social Security commission tasked with making the program solvent for the next 75 years.” The bill would require votes in both Houses of Congress on the commission's recommendations, according to Durbin. [The Washington Post, Post Politics, 3/20/13]

Washington Post Mentions Benefit Cuts Far More Than Increased Revenue In Editorials Mentioning Social Security

Washington Post Editorials Mention Social Security Benefit Cuts Nearly Six Times More Than Revenue Increases. A Nexis search of Washington Post editorials published after November 30, 2010, with the search terms “section(editorial) and byline(editorial) and (social security)” turned up 75 editorials, omitting duplications, in which Social Security was mentioned. The results showed that 23 editorials mentioned benefit cuts or policies that would effectively result in lower benefits than exist under current law, such as proposing changes to the cost of living adjustments to lower outlays or specific changes such as the “chained CPI.” The Post mentioned boosting revenue through a payroll tax increase, or more generally increasing taxes on the wealthy to pay for Social Security and other retiree programs, in just four editorials -- a huge disparity of almost six-to-one in favor of benefit cuts over increased revenue. Vague or unspecified references of “reform” to Social Security were not included in this analysis.

[Media Matters search of Nexis database, 3/21/13]

Washington Post Dedicated Two Editorials Entirely To Promoting “Chained CPI.” The Post devoted two editorials solely to promoting the adoption of the “chained CPI,” which would change the way Social Security benefits are calculated and decrease payouts significantly over time. [The Washington Post, 5/26/11 & 11/25/12]

Increased Revenue Would Make Social Security More Solvent Than Benefit Cuts Such As Chained CPI

Social Security Trustees: Program is Solvent Through 2033, Can Pay 75 Percent Of Benefits Through 2086. The April 2012 report from the Social Security Board of Trustees determined that the Social Security Trust Fund would not be exhausted until 2033. After that, the program would be able to pay 75 percent of scheduled benefits for more than 50 years, and 73 percent of scheduled benefits would be paid out after 2086. [2012 Annual Report of Social Security Trustees, 4/25/12]

CBO: Adoption Of Chained CPI In 2012 Would Have Extended Trust Fund By Only Four Years. A 2010 Congressional Budget Office (CBO) report on options to sustain Social Security in the long-term determined that basing cost of living adjustments -- increasing future payments for beneficiaries based on an increase in prices -- on the chained CPI starting in 2012 would have only “extend the trust fund exhaustion date by four years.” [Congressional Budget Office, “Social Security Policy Options,” July 2010]

CBO: Eliminating Payroll Tax Income Cap Without Increasing Benefits For High-Income Earners Would Extend The Trust Fund Beyond 75-Year Horizon. In the July 2010 Social Security report, the CBO determined that eliminating the income cap -- the maximum amount of income that is subject to the Social Security payroll tax, currently set at $106,800 -- but also using the current cap level to calculate benefits, “would extend the trust fund exhaustion date beyond the 75-year projection period.” The CBO stated that this would “primarily affect taxes paid by high earners.” [Congressional Budget Office, “Social Security Policy Options,” July 2010]

CBO: Increasing Payroll Tax By 2 Percentage Points Over 20 Years Would Extend Trust Fund Exhaustion Date By 3 Decades. The July 2010 CBO report also found that if the payroll tax had been increased by 2 percentage points over 20 years, starting in 2012, it would have increased the solvency of the trust fund by several decades. [Congressional Budget Office, “Social Security Policy Options,” July 2010]

Many Economists Oppose Use Of Chained CPI

Dean Baker: Washington Post Hid Fact That Chained CPI Is A Benefit Cut. Dean Baker, the co-director of the Center for Economic and Policy Research, criticized the Post for its November 25, 2012, editorial headlined “A better stat for inflation,” arguing that the Post hid the fact that the chained CPI policy it advocated for is, in effect, a cut for Social Security beneficiaries:

The Post also tells us:

“Adjusting those annual increments merely reduces the rate of growth in seniors' benefits; it does not actually cut them.”

Yes, save this one for the Post's Kids section. The cut reduces the real value of benefits. This is not an argument for adults. [Center for Economic and Policy Research, Beat the Press, 11/26/12]

Economic Policy Institute: 300 Economists And Social Insurance Experts Oppose Chained CPI. In November 2012, the Economic Policy Institute released a letter signed by 300 economists and social insurance experts that stated:

[W]e oppose proposals to reduce the Social Security COLA by tying it to a chained consumer price index that does not directly measure the actual expenditures of beneficiaries. Such a move would lower the COLA by an estimated 0.3 percentage points per year, translating into a 3 percent benefit cut after 10 years and a 6 percent cut after 20 years. The oldest beneficiaries, who are often the poorest beneficiaries, and persons receiving disability benefits for more than 20 years would see even larger cuts over time. [Economic Policy Institute, 11/20/12]

Media Matters researcher Hannah Groch-Begley contributed to this report.