Social Security is a vital, irreplaceable safety net for seniors and people with disabilities. Benefits are already slim, with the average beneficiary receiving just $13,000 a year. By reducing the already badly calculated and insufficient cost of living adjustment (COLA), the program would be less effective even for current beneficiaries. And the damage would be compounded annually, hurting future retirees and the very elderly even more.
“That these rumored COLA cuts would be piled on top of expected changes to Medicare that could shift costs to seniors is especially worrisome,” Allan J. Jacobs, B’nai B’rith International President said. “Eventually middle class retirees could find their most reliable income stream consumed by their rising health care costs.”
The reported White House plan would recalculate the COLA using a mechanism chosen because it reduces the size of the increase. This COLA cut would accumulate over time, eventually leaving social security benefits far behind inflation and smaller for each successive generation.
B’nai B’rith International understands that the president feels obliged to "put everything on the table" in order to avoid being accused of being unwilling to compromise and to increase the chance for a responsible deal. But as the president's spokesperson reiterated today, Social Security is not part of the federal deficit and is funded outside the budget. It is difficult to believe that the government could justify collecting the same rate of taxes from today's workers while agreeing to erode their benefits into the future.
“This plan makes no sense,” B’nai B’rith Director of Aging Policy Rachel Goldberg, Ph.D., said. “Social Security has no impact on the deficit. To include cuts to beneficiaries as part of a deficit reduction deal flies in the face of sound fiscal policy and disregards a population segment in most need of assistance. And in the face of the possible cuts to Medicare, Medicaid or other critical programs on which seniors and the disabled rely, Social Security cuts could be disastrous.”