•Press Release Economic Growth Government Health and Social Programs
July 13, 2010
For Immediate Release: July 13, 2010
Contact: Alan Barber, 202-293-5380 x115
WASHINGTON, DC – Despite the fact that Social Security is fully funded through 2039, there have been calls to cut Social Security benefits in an effort to reduce the long-term budget deficit. A new analysis from the Center for Economic and Policy Research (CEPR) finds that three of the most common proposals to cut Social Security would have a substantial negative impact on low- and middle-income families.
“There is a great deal of talk in policy circles about cutting Social Security, but very little discussion of the financial situation of those affected by the cuts,” said Dean Baker, co-director of CEPR and an author of the report.
The study, “The Impact of Social Security Cuts on Retiree Income,” analyzes three of the most common proposals for reducing Social Security benefits and calculates the implied cut in benefits and income for various age groups and income quintiles of near and current retirees. The proposals examined are the adoption of progressive price indexation, raising the retirement age to 70 by 2036 and reducing the annual cost-of-living adjustment or COLA by 1.0 percent below the rate of inflation. It is worth noting that these proposals would only have a negligible impact on the deficit over the course of the next 10 years.
The analysis of the proposed cuts show:
“The vast majority of near-retirees will rely on Social Security for most of their income in retirement,” said Baker. “All of these proposals will result in significant cuts in income for low- and/or middle-income families.”
The full report can be found here.