Historic levels of deficit reduction enacted by Congress in recent years have failed to spur the job creation we need. Bipartisan budget talks now offer Congress a chance to correct course.
The Congressional Budget Office (CBO) projects that lawmakers could create 900,000 new jobs in 2014 just by ending sequestration - the $1.2 trillion spending cuts that began taking effect this year. Yet there is no reason for policies that grow the economy and create jobs to come at the expense of Americans’ retirement security. Unfortunately, demanding cuts to Social Security in exchange for repealing sequestration is the false choice being peddled to the American people.
With our deficit at its lowest level since 2008 and sequestration already paid for, it is only in the spirit of compromise that additional cuts should be considered in these budget talks, and certainly not to Social Security and Medicare benefits. There is no Social Security crisis looming over our economy. There is a retirement security crisis. A staggering 46 percent of working families have no retirement savings at all, according to the National Institute for Retirement Security. The median account balance of working households approaching retirement sits at just $12,000, and two-thirds of seniors already rely on Social Security as their primary retirement income.
Despite growing reliance on Social Security, too many voices in Washington support reducing cost-of-living adjustments to already-meager Social Security benefits. The proposed Chained Consumer Price Index (Chained CPI) manipulates how we measure inflation in order to decrease cost-of-living adjustments over time. Cuts under the Chained-CPI compound as retirees age, amounting to a cut of more than $28,000 by the time the average beneficiary turns 95. Considering that our current CPI already undercounts rising costs faced by seniors, and that cost-of-living adjustments have already been meager or non-existent in recent years, this proposal is difficult to justify to the American people.
Rather than benefit cuts, Congress should aim for policies that create jobs, grow the economy, and also happen to strengthen Social Security. Currently, Social Security’s Trustees project that with no changes at all, the program will pay out full benefits until the 2030s and then 75 percent of benefits thereafter. However, the Trustees also provide us a glimpse into an alternate economic future where unemployment is low and GDP growth is consistently above three percent. If Congress made the economy our top priority and achieved this kind of growth, Social Security would be fully solvent into the 2050s – and capable of paying more than 90 percent of promised benefits thereafter. Policies that are good for jobs and the middle class – like ending sequestration and passing commonsense immigration reform – are good for Social Security too.
It is undeniable that paying for the retirement and health care of the Baby Boomer generation will be expensive. Yet Americans have repeatedly rejected Republican proposals to wipe these expenses off the government’s ledger by cutting Social Security, delaying the Medicare eligibility age or replacing Medicare with a voucher. Instead, polls indicate overwhelming support for reforms that expand Social Security benefits and ensure all Americans contribute at the same rate, as Senator Mark BegichMark BegichThe future of the Arctic 2016’s battle for the Senate: A shifting map Trump campaign left out of Alaska voter guide MORE (D-Alaska) and I do in the Protecting and Preserving Social Security Act.
Our urgent need to repeal sequestration is no justification for an agenda opposed by most Americans. In these bipartisan budget talks, it is time for Democrats and Republicans alike to acknowledge that the American people do not have to choose between job creation and their hard-earned retirement benefits. Such a trade is neither fiscally necessary nor economically prudent.
Deutch has represented Florida's 21st Congressional Distrit since 2010. He sits on the Ethics; the Foreign Affairs; and the Judiciary committees.