A Progressive Approach To Deficit Reduction

FACT: Social Security is not contributing to the deficit. The 2010 annual report of the Board of Trustees stated that the combined Social Security trust funds ran a surplus of $122 billion last year, with a reserve of $2.5 trillion. Social Security is projected to be able to pay full benefits to retirees until 2037, even without policy changes.

FACT: There is ample time for Congress to review options for adjusting the Social Security system through the usual legislative process. Congress should not hide behind an unelected, unaccountable commission. Since 1935, Social Security legislation has always had the benefit of full hearings before the House Ways and Means Committee and the Senate Finance Committee, executive sessions giving all members a chance to offer amendments, and unlimited debate and opportunity for amendments in the Senate and the House of Representatives. Instead of shifting responsibility and ducking accountability, Congress should do its job.

FACT: More than 52 million people are depending on monthly benefits this year. Wounded soldiers and their spouses and children receive Social Security benefits, as well as the families of soldiers who have died for their country. Social Security continues to provide benefits to the families of those who lost their lives in the 9/11 attacks, and millions of others whose families have met unthinkable calamity.

FACT: Benefit cuts are not necessary to guarantee Social Security’s long-term solvency. For one thing, policies that lower unemployment and increase wages for middle-class workers will mean additional dollars flowing into the Social Security trust funds. Adjusting the percentage of earned income subject to Social Security tax to the level that it was in 1983, when the tax ceiling was last adjusted, would significantly improve the long-term outlook.

FACT: The solution to Medicare and Medicaid’s rising costs can be found by cutting the cost of health care and fixing our broken system, not by cutting services. We need to build on the health care reforms passed in 2010 to continue to drive cost-efficiency and improve care.

FACT: The projected deficit—which seems like a huge number—isn’t that huge. As pointed out by Paul Krugman and Dean Baker, our debt-service burden is about the same as that of 1992 under President H.W. Bush.

FACT: There are many good options for cutting the deficit, as is clear from the “don’t kill growth and jobs” statement signed by more than 300 economists and civic leaders in September. The Congressional Budget Office recently estimated that current tax and spending policies will add $6.2 trillion to the federal deficit over the next 10 years. Implementing the eight policy suggestions in the statement would raise an estimated $5.5 billion over that period. We could save about $100 billion a year in military spending, which consumes more than half of our discretionary budget, by letting go of Cold War-style weapons systems and spending practices that are no longer relevant to today’s geopolitical climate. Plus, we should reform our corporate welfare system—subsidies for everything from corn to crude oil—and target tax breaks and subsidies on areas of broadest public benefit. In short, we can bring our deficit down to a sustainable level while still making public investments in the foundational elements of a strong economy and nation—without increasing burdens on working families.