I haven’t had a chance to give this op-ed, which ran on Monday, the scrutiny it deserves–especially since it has gotten glowing reviews from left-wing bloggers. It’s by Robert Ball, one of the grand old men of liberalism on Social Security, and it argues that “[i]t’s the essence of responsibility, in my view, to insist on no benefit cuts.”
“No benefit cuts” doesn’t mean what you think it means, though. Ball doesn’t just want benefit levels to keep up with inflation, so that the median retiree in 2040 gets the same value as the median retiree today. He doesn’t even just want benefit levels to keep up with inflation and wage growth. Even that level of growth–which we have no plans to be able to pay for–counts as a “cut” for Ball. He wants more.
Social Security benefits are modest by any measure and are already being cut — by raising the age of eligibility for full benefits and by deducting ever-rising Medicare premiums from benefit checks. So the benefits provided for under present law will replace, on average, a lower percentage of prior earnings than in the past.
So even if people get checks that keep up with inflation and wage growth and get them just as long as they used to–because the age of eligibility goes up but so do lifespans–it’s still a “cut,” unless total Social Security spending goes up to cover inflation, wage growth, and rising longevity. And the cost of Medicare!
Ball also writes that “what was right in 1983,” a mix of tax increases and benefit cuts, “would be wrong today.” The missing context: The Social Security shortfall now is much larger than it was then. In 1983, the 75-year shortfall was estimated to be 1.8 percent of workers’ taxable wages. Applying the same methods used to calculate that figure, today’s shortfall is 3.1 percent of taxable wages–more than 50 percent larger.
Ball’s solution relies heavily, of course, on raising the payroll tax cap, which would hit “only the [top] 6 percent of earners.” That figure would apply in any one year, but over the course of their working lives 22 percent of workers would be affected–something else he doesn’t say. And as mentioned below, the extra revenue would probably be spent by the government on other programs rather than used to shore up Social Security.