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Cuts in Social Security … ‘Unthinkable’

Written by Charles D. Ellison on 29 July 2011.

Lawmakers in Washington are like basement poker players, pushing money, change, family keepsakes and strips of clothing back and forth across a scratched table. It’s smoky and the alcohol flows from a spigot given the rhetorical fistfights breaking out these days. Yet, little gremlins appear hidden in the details, ripping reams of fine lines from multiple deals being thrown back and forth as negotiations reach the cliff of sudden default death.

“The climate on Capitol Hill mixed with this heat is like watching apocalypse,” mopes one anonymous Congressional aide. “Either it’s really hot or I really did see four horses running down Independence Avenue the other day.”

The comment describes the overall mood and fear gripping Capitol Hill, as legislators, after several months of constant back-and-forth, still haven’t reached a compromise. Before the humidity-dripping week came to a close, President Barack Obama and House Speaker John Boehner (R-OH) were huddling up again, making one last ditch effort for a “grand bargain” that would amount to nearly $4 trillion shaved from the federal deficit. While the haggling continued, a group of about 20 “tea party” revival Republicans — less than four percent of the entire Congress — was throwing big wrenches at the White House. No deal could be reached without a “cut, cap and balance” proposal voted on earlier in the week, with uncompromising conservatives pushing more specifically for a balanced budget amendment in the Constitution.

“We want to make very clear: this is not just the best plan on the table for addressing the debt limit — this is the only plan,” was freshman Sen. Mike Lee (R-UT). “We’re otherwise going to be blowing past the debt-limit deadline.”

As the soap opera unfolds and finger pointing explodes like the last Space Shuttle, the average person is lost in a freaky slide show of opposing platforms. Everything is on the chopping block, even programs perceived as untouchable. Hoping to lure Republicans into a deal, the White House makes a play with Social Security.

The move is as comical as it is treacherous. Observers openly admit that Social Security is not the “sexiest” of political topics, pointing to the 75 plus year-old program’s indelible impact on American life. Politically, it’s unthinkable that cats in Washington would even consider touching it considering the demographic most effected: senior citizens. So, when the president talked of potential cuts to Social Security, the reaction was swift and angry from many progressive Democrats who weren’t having it.

“While we understand the immediate need to address the debt ceiling to meet our obligation, we urge you to protect Medicare, Medicaid and Social Security by keeping these important programs off the bargaining table,” yelled 69 House Democrats in a letter to the White House fuming that Social Security even ended up in the conversation in the first place. They described the talk of cuts to the long-time “entitlement” program as “short-sighted economic policy.”

And, as debt-ceiling talks go through weeks of impasse, the impression of an African-American president touching something so critical to decreasing African-American poverty is not lost on some.

“As for how Social Security affects African-American seniors, particularly women, Social Security is the only source of retirement income for 40 percent of African-American seniors,” pointed out Benjamin Gerdes, a press secretary for Rep. Donna Edwards (D-MD), a leading critic of using the program as a negotiating tool. Edwards, one of the 69 Democrats who signed the fiery White House letter, is not shy about pointing out that poverty rates for elderly Blacks would double from 24 percent to 65 percent without adequate Social Security.

And while Black females make up 9 percent of all beneficiaries, they account for nearly 20 percent of disabled worker beneficiaries. Edwards wants to raise the income cap.

The problem, some observers believe, lies in the language. At some point, Congressional Republicans, backed by corps of conservative think tanks and fiscal policy experts, were able to characterize Social Security as an “entitlement” when liberal opponents saw it the other way. How did something that works like a lifetime savings account end up as a government program in the first place? The larger public understanding is that its money socked away from hard work until retirement. So why even consider touching it?

David John, a Heritage Foundation senior fellow, admits its semantics. “Entitlement is a budgetary term. It’s not money appropriated annually by Congress,” clarifies John.

But, John, along with many other conservative policy experts pushing for reform, claims that Social Security is in trouble now because “it’s automatic spending. Social Security revenues will be far less than it is now.” John warns that Social Security spending is outpacing Social Security revenues. Heritage, which wants the program included in a larger debt-reduction package, claims it “started to run cash-flow deficits in 2010.”

One solution, John says, is to raise the retirement age to 69. When asked how that would impact African Americans and other demographics dealing with a wide range of chronic health issues, he emphatically states that a reform plan would keep early retirement benefits for “the roughly 20 percent of people collecting Social Security who retire due to health reasons.”

In any case, Kathy Ruffing, a Center for Budget and Policy Priorities Senior Fellow, thinks reforming Social Security at this point is premature. “Our answer is yes, it needs reforming … but it’s important to get it right,” says Ruffing. “Social Security’s financing challenge is real but manageable. There is no immediate funding crisis and therefore policymakers have time to weigh changes carefully. We strongly prefer that any solvency package rely chiefly on revenue increases, rather than benefit reductions, because Social Security benefits are already very modest.”

Revenue is the key word at the moment as both White House and Congress attempt to navigate a grand deal. The sticky part, and the reason for renewed focus on Social Security, may be that the government owes it money. Nearly 35 percent of the $14 trillion debt belongs to the program.