Retired Federal Reserve Chairman Alan Greenspan is a frequently mentioned first choice to head a proposed entitlement commission to overhaul Social Security, Medicare, and Medicaid.  Cuts to Social Security, including Cost-Of-Living Adjustment (COLA) reductions, increased Medicare premiums, and other higher costs for beneficiaries are almost certain to come under close scrutiny in coming months.

Early this year President Bush proposed the establishment of a new entitlement commission - a proposal that was not warmly received by Congress prior to the November elections.  After the November elections, however, and by 2007, it is widely expected that Congress will examine proposals to deal with looming financial deficits in our nation’s benefit programs.

Join The Nationwide Social Security COLA Protest

In 1983 Greenspan presided over the Social Security commission responsible for the single largest overhaul in the program’s history.  While serving as Federal Reserve Chairman, Greenspan frequently advocated changes that would cut Social Security COLAs, saying that "there is almost a 100 percent probability that we are overcompensating the average Social Security recipient for increases in the cost of living."

TSCL is carefully monitoring legislation that would establish the Commission.  Although there have been many commissions in the past, most have failed to agree on a bipartisan plan, let alone produce any legislative changes.  Unlike past commissions, however, this one would be modeled on the Defense Base Closure Commission.  The proposed legislation would "fast track" the Commission’s final recommendations.  The Commission would be required by law to submit recommendations for revamping the programs in only 6 months or less, and Congress would be required to vote on them within 60 days.

Our nation’s benefit programs do face long-term financing issues.  Each year that Congress delays action closes off the opportunity to make gradual changes that can be phased in over a reasonable period of time.  Delay is more likely to require sudden deep benefit cuts, and could "give birth" to new generations of Notch Babies.

However, we believe that the scope of the proposed Commission may require more adequate time than just six months to allow for a thorough examination of all options for change, and to allow for free and open debate.  TSCL is calling on Congress to keep the needs of current beneficiaries in mind, and stands ready once again to defend COLAs from future "Greenspan COLA Cuts."

Sources:  "Wolf To Introduce Entitlement Commission Legislation Today," Congress Daily, June 2, 2006. Testimony of Chairman Alan Greenspan on the Consumer Price Index, Senate Committee on Finance, January 30, 1997.

October 2006