News Release

Sen. Conrad Proposal “Would Dismantle Social Security”

NANCY ALTMAN, ERIC KINGSON, via Sarah Shive sshive at socialsecurity-works.org
Altman and Kingson are co-chairs of the Strengthen Social Security Campaign. The group released a statement today, which said that Senate Budget Committee Chairman Kent “Conrad’s budget mark, the Fiscal Commission Budget Plan, incorporates the Social Security cuts contained in the Bowles-Simpson proposal. Unfortunately, some seem to have forgotten what the Bowles-Simpson proposal would entail for Social Security. The proposal would cut the benefits of all current beneficiaries, drastically cut the benefits of future generations, and worse, effectively end Social Security as we know it.

“Senator Kent Conrad’s Fiscal Commission Budget Plan incorporates the Social Security proposals of the Bowles-Simpson plan. Members should know that this plan would cut benefits for today’s and tomorrow’s beneficiaries. Of even greater concern, it would dismantle Social Security. Specifically, the Conrad/Bowles-Simpson plan would:

* Drastically cut the benefits of middle-class families: The Bowles-Simpson proposal cuts Social Security’s retirement, survivors, and disability benefits by between 19 percent and 42 percent for young people entering the workforce today.

* Reduce the annual Cost of Living Adjustment for current and future Social Security beneficiaries: The Bowles-Simpson proposal would cut the COLA for current and future Social Security beneficiaries, reducing benefits more with every passing year. This would prevent benefits from keeping up with increases in the cost of living over time. Under these plans, retirees claiming benefits at 65 would see their benefits decline by 3.7 percent at age 75, by 6.5 percent at age 85, and 9.2 percent at age 95.2.

* Raise the full retirement age to 69, and the earliest eligibility age to 64: Because of the way that Social Security benefits are calculated, raising the retirement age, as the Bowles-Simpson proposal recommends, is indistinguishable from an across-the-board benefit cut, no matter how long workers continue to work — even when they work to age 70 and beyond. Raising the full retirement age by two full years amounts to a 13 percent benefit cut, on top of the 13 percent cut already made when the retirement age was increased from 65 to 67.3. The cuts are hardest for workers in physically demanding jobs, poor health, or otherwise unable to continue to work.

* Radically restructure the program: The Bowles-Simpson proposal would destroy Social Security by stealth. It would eliminate a fundamental and carefully-crafted feature that has been part of the program since the beginning. As figure 1 shows, over time, everyone would receive nearly the same subsistence level benefit unrelated to wages.

* Cut benefits for the most vulnerable: More than half of all workers with an annual income of about $11,000 would see their benefits cut by about 16 percent under the Bowles-Simpson proposal.”