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TSCL Monitoring Possible Social Security Reforms
TSCL legislative staff and supporters are both gravely concerned about proposals that would cut Social Security benefits and reduce Cost-of-Living Adjustments. The Congressional Budget Office (CBO) recently estimated that the 2004 deficit would be the highest in history at $422 billion. This should make no difference to Social Security, because it is more than adequately funded with �earmarked� payroll taxes � but it does. By cutting benefits, Congress can lower the deficit. In particular, the growing deficit is intensifying pressure on Congress to cut annual Cost-of-Living Adjustments (COLAs). Recently the CBO was asked to perform one of the first comprehensive cost analyses of Social Security reform proposals, a move that often signals that Congress is about to consider the legislation. One of the proposals, H.R. 3821 -- introduced by Representatives Jim Kolbe and Charles Stenholm -- included a provision that would use a new �chained CPI� to calculate annual COLAs. According to the CBO, �this proposal would apply to current beneficiaries, not just people who become eligible in the future.� The provision mandates a switch to the new, more slowly growing �chained� Consumer Price Index (C-CPI-U). Earlier this year, Federal Reserve Chairman Alan Greenspan urged Congress to consider cutting the deficit by adopting the new �chained� CPI and other measures to restrain the growth of Social Security. Chairman Greenspan is on record for having urged Congress to adopt the �chained� CPI since 1997. TSCL is vigorously opposing the �chained� CPI proposal and supports a more fair COLA based on the senior CPI that more appropriately takes into account the greater portion of health care goods and services upon which seniors must spend their money. In addition, TSCL supports a Constitutional Amendment, introduced by Mississippi Representative Gene Taylor, H.J. Res. 88, which would remove the Social Security Trust Fund from the federal budget deficit. Sources: 2004 Mid-Session Budget and Economic Update, Congressional Budget Office, September 7, 2004. CBO Cost Estimate, Bipartisan Retirement Security Act of 2004, CBO, July 21, 2004. Testimony of Chairman Alan Greenspan on the Consumer Price Index Before the Committee on Finance, U.S. Senate, January 30, 1997. September 2004 | ||||||||
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