There Will Be Social Security Cuts, Unless. . .

By Lawrence A. Hunter, Ph.D.
November 21, 2011

Seniors In The Cross Hairs
 
There Will Be Social Security Cuts and Tax Increases Unless Seniors rise up as one and say, "No how, no way."

Republicans want to cut Social Security.  Democrats have agreed in principle to cut Social Security but they will do so only if Republicans also agree to raise taxes.  Republican capitulation to the demand to raise taxes is well underway.  Read about it here, and watch Senator John Kerry (D-Mass.) admit as much here. 



One of the most conservative, anti-tax members of the U.S. Senate, former head of the Club for Growth, Pennsylvania Senator Pat Toomey agreed to a $350 tax increase but it wasn’t enough for Democrats, who turned down his offer.  That doesn’t end the matter, however.  Now that Republicans have proved what they are by offering a tax increase, they are down to haggling over the price.  If history is any guide, Republicans will agree to a tax increase, and Democrats will in turn agree to cut Social Security for current beneficiaries—not ten years from now, not five years from now, not in two years but right now!
 
The failure of the Super Committee to come up with a deal has confused the situation temporarily, and the conventional wisdom among the mainstream media is that seniors dodged a bullet when the Super Committee dead locked and couldn’t come up with a deal by the November 21 deadline.  The fact of the matter is, the gun aimed at seniors—the Chained Consumer Price Index (“Chained CPI”)—is still locked and loaded; the Social Security bullet is still in the chamber just waiting on a deal over taxes for Congress to pull the trigger. 
 
In effect, Congress has a $300 billion deal to cut Social Security tucked away in its back pocket just waiting to be used as a “pay for,” whether that is scoring the Social Security cut as “deficit reduction” for purposes of a larger deal on the debt or used to off set the cost of, say, the so-called “doc-fix,” which will be required next year to prevent a 30 percent reduction in reimbursements to Medicare doctors.
 
As the Huffington Post put it:

“Sources familiar with negotiations have been saying for more than a week that the sides were deadlocked, primarily over how to treat the Bush-era tax cuts for the wealthy. Democrats want them to expire before they'll accept deep cuts to entitlement programs. Republicans have been insistent on lowering tax rates further. The elderly, then, have Republican recalcitrance to credit for the continuation of their benefits.”

Seniors should take little solace from their Republican “protectors;” they are after all the source of the Chained CPI scam to begin with, and they will throw seniors under the bus the minute a deal on taxes is struck.  Moreover, any tax deal Republicans strike will have to be scrutinized very carefully to uncover the hidden “take backs” Republicans will claim are necessary to “pay for” the tax rate reductions.  For example, according to the congressional Joint Committee on Taxation (JCT), taxes would rise by $60 billion over the next decade if the Chained CPI is adopted because annual adjustments to tax brackets would be smaller, which would cause more people to be thrown into higher tax brackets because their wages rose faster than the new inflation measure. On top of that, automatic annual increases in the standard deduction and personal exemptions intended to keep up with inflation would be smaller.
 
According to the JCT, for example, taxpayers earning between $10,000 and $20,000 a year would see a 14.5 percent increase in their federal taxes by 2021 under the chained CPI.
 
Seniors are still in the cross hairs. There Will Be Social Security cuts and tax increases unless senior citizens across the political spectrum rise up in opposition.  You can do your part by signing the SSI Petition To Stop Washington's Assault On Seniors.  To do so, click here.

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