This week it was announced that President Obama’s next budget will include a benefit cut to Social Security in the form of the “chained CPI,” a recalculation of cost-of-living increases at a lower rate. This move was met with dismay among progressive activists, which meant that the anti-backlash backlash was not far behind.
An early salvo came from columnist and radio host Matt Miller, who tweeted this:
“Liberal overreaction alert: In next 10 yrs Soc Sec OASI will spend $9.3 trill. Chained CPI trims $130 bill. That's 1.4%. Calm down.”
First, about that “Calm down” closer. It has become a tired rhetorical gambit of self-described “centrists,” a group which includes Miller, to paint their opponents as agitated (presumably as a contrast to their own calm rationality). This maneuver is routinely deployed to imply that anyone who doesn’t embrace their ideology – and it is an ideology – is overly emotional and therefore somewhat less rational than they are.
The snippiness of that “calm down” remark is a slip for Miller, who is almost always unfailingly genial as the host of Left, Right, and Center.
Miller’s website says he’s trying to promote “common sense answers in the progressive center.” If so, he’s in the wrong spot on this issue. Let’s argue his position on its merits, without speculation on either his emotional state or our own. There are a lot of errors embedded in his 140-character-or-less comment, so let’s unpack them one at a time:
Miller implies that “liberals” constitute the main body of opposition to the chained CPI.
The vast majority of Americans, including majorities in both parties, oppose the chained-CPI or any Social Security cut contained in a “deficit reduction” budget. A new poll shows that 87 percent of voters over the age of 50 consider it “very important” that politicians not cut Social Security benefits. 69 percent of voters in that poll “oppose” or “strongly oppose” the chained CPI, while only 16 percent support it.
Those results echo those of a December poll which found that 54 percent of voters opposed the chained CPI, with 16 percent favoring it.
Opposition to the chained CPI isn’t “liberal”: It’s centrist. We’re saving a seat for you at our table, Matt.
It’s only a small cut.
This won't hurt a bit, say the mohels of moderation. We're only cutting 1.4 percent off. But things look different when you consider the impact on elderly individuals. Here’s how the chained CPI would cut benefits for someone retiring at 65:
The cut would come to 3.7 percent by the time they turned 75.
It would be a 6.5 percent cut age 85.
It would be 9.2 percent cut at 95.
In raw dollars, the average earner would see their cumulative benefits reduced by a total of $4,631 – more than three months of benefits – by age 75; $13,910 – nearly a year of benefits – by age 85; and $28,004 – more than a year and a half of benefits – by age 95.
Some beneficiaries might even find it hard to remain calm in the face of cuts like these. After all, Social Security is the primary or only source of income for two-thirds of retirees, and the sole source of income for roughly one-third. The average monthly benefit today is $1.262. (It’s less for women, who receive less than a thousand dollars per month on average.)
The “chained CPI” is technically more accurate.
Okay, Miller doesn’t directly imply this here. But this argument is imbedded in many of the pro-chain arguments, and it fits with Miller’s preference for technically accurate fixes. The problem? If you’re looking for rational, technocratic solutions, the chained CPI isn’t it. In fact, 250 Ph.D. economic and 50 social insurance experts signed a statement saying there is “no empirical evidence” to support the claims that it’s more accurate than the current calculation.
A technocrat might as well use a Ouija board – unless your goals are either ideological (e.g. downsizing government) or reflect a hidden agenda (dealmaking, lower taxes, appearing "moderate" to the People That Matter, etc.)
Our last answer will be framed in the form of a question:
If the end result is so small on a macro level, then why do it?
Social Security doesn’t contribute to the deficit, so that’s no reason to make this change. And there are better ways to stabilize its Trust Fund for the long-term. (One of them is to dedicate revenue from a financial transaction tax, which Miller says he supports.)
Then there are the political implications of this move. For Democratic politicians – a group which includes neither Miller nor me – hysteria is a rational response to the President’s proposal. The polling is clear: Any politician or party who is seen as supporting Social Security faces a potential catastrophe come the next election. (And the next election is in an off-year, which will make seniors an even more decisive voting bloc.
Miller complains that “neither party trusts us enough to lay out the facts and explain the steps we need to take to truly fix things.” Sometimes I share that frustration. But if we want to move beyond that, we have to get our facts right. And for the record, I feel pretty calm this morning.