Hutchison unveiled her plan, which she said would avoid tax increases or cuts to core benefits, on Thursday. Under the proposal, the Social Security retirement age would gradually rise, finally reaching 69 in 2027, and the yearly cost-of-living adjustment (COLA) would be shaved by 1 percent.
The senator, also citing the Social Security actuary, said her plan would roll back deficits by more than $400 billion over the next decade and more than $7 trillion over the next 75 years or so.
Social Security is generally seen as being in better fiscal shape than two other entitlement programs, Medicare and Medicaid.
But the most recent trustees report said Social Security’s trust fund would run out a year earlier than previously expected, in 2036. The trust fund has also run deficits in 2010 and is estimated to do so again in 2011.
Still, if no changes to the program are made, it is still estimated to be able to pay out roughly three-quarters of guaranteed benefits through 2085.
With all that in mind, liberal Democrats have long fought to keep Social Security out of the discussion over deficit reduction, saying it has not contributed to the current fiscal situation.
But Republicans have said that Social Security – and everything besides tax increases, for that matter – need to be on the table in the current talks led by Vice President Biden.
President Obama’s fiscal commission also dealt with Social Security, proposing to raise the retirement age to 69 in around 2075 and increases the amount of income that is subject to the payroll tax.