Letter to Senator Hutchison on Defend and Save Social Security Proposal
|Written by Dean Baker|
|Thursday, 16 June 2011 16:00|
284 Russell Senate Office Building
Washington, DC 20510-4304
Dear Senator Hutchinson:
Today you held a press conference to announce a new proposal, the Defend and Save Social Security (DSSS) Act, that both raises the Social Security normal retirement age to 69 and cuts cost-of-living adjustments for Social Security beneficiaries. While you say that your proposal will not cut “any core benefits”, this is not the case.
The DSSS Act would reduce the annual cost-of-living adjustment for Social Security beneficiaries by 1.0 percentage point. This is a benefit cut both measured against current law and in real terms. If enacted, a 1.0 percentage point reduction in the COLA for beneficiaries would result in a benefit cut of 12 percent for a retiree at age 75 and a cut of more than 20 percent for a retiree at age 85.
You also propose raising the normal retirement age for Social Security to 69 by the year 2027. As can be seen from the Social Security trustees’ report, the normal retirement age for Social Security has already been raised to 66 and is scheduled to increase to 67. Raising the retirement age further would amount to another cut in benefits with each successive increase in the retirement age. While the intention may be to have people work later into their life, our research shows that nearly half of older workers are employed in physically demanding jobs in which working to age 69 will be difficult. For workers who are unable or unwilling to work at older ages, this proposal would result in a 4 percent reduction in future benefits for workers currently between the ages of 54 and 58 and a 10 percent reduction for workers between the ages of 44 and 48.
Finally, the Trustees report projects that Social Security will remain fully solvent through 2036 and will be able to pay almost 80 percent of benefits for many decades past this point. It is also worth noting that the necessary increases in funding to maintain full solvency are relatively small compared to items like the rise in defense spending over the last decade, so there certainly are not major economic obstacles to maintaining full funding for Social Security.
As a sitting Senator responsible for authoring and voting on legislation that affects millions of Americans, I hope that you will be careful to present the situation more accurately in the future. If you would like any additional background on the program, I would be happy to assist you.