Mike Koszcal has efficiently pulled together all the relevant arguments in favor of the Chained-CPI — and then very properly demolishes them one by one. He takes on the idea that that it’s a more accurate measure of the cost of living (which, if true, would mean that it wouldn’t require all these “fixes” to keep the elderly out of poverty), the idea that it’s no big deal, “not much a cut so nobody will really notice”, and the daft idea that we’ll be able to “fix” it down the road, the most fatuous argument of all.
But this gets to the fundamental stupidity of the politics:
You’ll hear arguments that a Grand Bargain is necessary, so it’s better to bring Social Security into long-term balance now, with Democrats at the helm, than in the future, when there will be less time and an uncertain governance coalition. You can get fewer cuts and more revenue than you would otherwise and take the issue off the table for the foreseeable future to concentrate on other priorities.
But if that’s your idea, then this is a terrible deal and sets a terrible precedent, because this deal would accomplish none of your goals. You’d cut Social Security without putting in any new revenue. And it wouldn’t be sufficient to close the long-term gap, so the issue would stay on the table. Indeed, the deficit hawks would probably be emboldened, viewing this as a “downpayment” on future cuts, and require any future attempts to get more revenue for Social Security, say by raising the payroll tax cap, to involve significant additional cuts.
Indeed it would.
This is the real point of this according to the CPBB, the head of which, Bob Greenstein, Chris Matthews referred to as “God” yesterday on his show. The rationale is purely political in that “we need to do this under a Democrat because it will be so much worse under a Republican.” Here’s his latest iteration of this argument:
Progressives who strongly dislike the chained CPI proposal should consider whether there is any chance that congressional Republicans will agree to raise revenues by curbing tax expenditures without some significant entitlement changes. And if (as I believe) there is no real chance, what’s preferable: the chained CPI with protections for the very old and the poor, or measures such as converting Medicare to premium support, raising the Medicare eligibility age to 67 and risking having some 65- and 66-year-olds go uninsured, and cutting Medicaid deeply and making ours more of a two-tier health care system based on income?
You know, I don’t care if they agree to raise revenue at this point. I don’t know when that became the holy grail of the Democratic Party, but it certainly isn’t mine and most definitely not in exchange for cutting social security and medicare benefits. Have they not proved over and over again that when you give them an inch they demand a mile? At this point it’s clear that the pursuit of deficit reduction is a suckers game and we should just take a break.
This is a false choice and from the tenor of his argument, I’m guessing even he is going a little bit wobbly. Perhaps he realizes that everyone in DC is using his endorsement to explain their willingness to do the thing that nobody wants done and he sees where that’s going to leave him when all is said and done.
And anyway, Konzcal explains exactly why this is so daft:
As Michael Lind, Joshua Freedman, and Steven Hill of the New America Foundation, along with Robert Hiltonsmith of Demos, expertly document, Social Security should be expanded in the years ahead, not cut.
Retirement security is meant to be a three-legged stool of Social Security, private savings, and employer pensions. The last two legs of that stool have been collapsing in the past few decades, and there is no reason to believe that this will change in the near future. 401(k)s have been a boon for the rich to avoid taxes and save money that they’d be saving anyway, while it isn’t clear that average Americans have saved enough to offset declining pensions. Median wages have dropped in the recession and are likely to show little growth in the years ahead, which makes building private savings harder. There isn’t a ton to cut – even the middle income quintile of retirees, making only around $20,000 a year, get 62 percent of their income from Social Security.
There are many ways to boost Social Security, and the New America paper introduces one. But as the authors note, “[a]ny strategy that expands the reliable and efficient public share of retirement security in America would be an improvement over today’s system, which is biased toward the affluent and skewed toward private savings.” And the best way to do programs is to build out programs that already work well.
Does anyone think there’s a snowball’s chance in hell of doing that if we cut the most popular and well-run program in the country and turn it into a means-tested welfare program?