This article was co-written with Nancy J. Altman, co-chair of the Strengthen Social Security Campaign.
President Obama, in his news conference today, again acknowledged that Social Security is not the cause of our national deficit. Yet he continues to suggest it should be included in debt-reduction negotiations. This makes no sense.
Social Security cannot and has not contributed a penny to the federal deficit. It should be off the table during these negotiations. Plain and simple, Social Security is not strengthened by cutting benefits or by raiding its trust funds.
Benefit cuts, especially proposals like the chained CPI, which would result in significant cuts to the Social Security cost-of-living adjustment and hit the most vulnerable the hardest, should have no place in deficit reduction negotiations. Social Security’s already modest benefits, just $13,000 a year on average, should not be negotiated away.
In recent days members of Congress in both the House and Senate have publicly announced their plans to oppose any cuts to Social Security benefits as part of a deficit-reduction deal. Last Friday, Rep. Donna Edwards, D-Md., and 69 other representatives sent a letter to President Obama urging him to protect Medicare, Medicaid and Social Security by keeping these important programs off the bargaining table. The letter provided a detailed explanation about why the chained-CPI formula used to calculate the Social Security COLA should not be changed.
The way to strengthen Social Security is to improve its benefits for the most vulnerable and by increasing contributions to close the long-range funding gap. Scrapping the payroll tax cap and requiring those with wages over $106,800 a year (and their employers) to pay taxes on all of their earnings would accomplish that. If 94 percent of Americans can do that, so should everyone else.
Social Security is undermined, not strengthened, by raiding the trust fund through a payroll tax holiday, as President Obama indicated he would seek to extend. Wall Street banks, Big Oil and other corporations do not need another government handout. There are far better ways to stimulate the economy than by diverting Social Security contributions, such as aiding state and local governments and extending unemployment insurance to millions of Americans. If continued, the so-called payroll tax holidays will undermine Social Security’s financing and further erode the confidence of the American people in the program.
When the time comes to address Social Security, it should be not be done in haste and behind closed doors that shut out the views of the American people. Poll after poll reveals that they favor eliminating Social Security’s projected shortfall through increased revenues, not by cutting benefits.