Over the past couple of years, we've been arguing that raising the Social Security and Medicare ages could be an important part of a fiscal reform agenda.
In an op-ed for The Atlantic, CRFB Senior Policy Director Marc Goldwein made the case for offsetting the costs of the payroll tax cut, AMT patch, and unemployment benefit extension with the chained CPI. He argued that using the chained CPI, which is widely considered to be the most accurate measure of inflation available, makes both technical and budgetary sense.
Later this week, Senate majority leader Harry Reid is expected to hold a vote on the two largest components of President Obama’s jobs bill, totaling $250 billion of the $450 billion proposal.
It's amazing how sequences in Washington can repeat themselves.
Congressman Chaffetz (R-UT) has just proposed a Social Security reform plan to restore solvency to the program. The plan relies on reforms to the benefit side of the equation and calls for slowing the growth of benefits for higher-earners, increasing the numbers of years over which benefits are calculated, fixing the cost-of-living calculation by switching to the chained CPI, and enhancing benefits for lower-income earners and the very old, among other changes.
As is well-known by now, the growth in entitlement programs fueled by rising health care costs and an aging population threatens an ever-increasing national debt. Our largest mandatory spending programs occupy nearly one-third of the federal budget and, in the coming years, payments out of these programs will continue to outpace the rate of growth in the overall economy. As such, serious entitlement reforms will have to play a role in a comprehensive approach to long-term debt reduction, along with other areas of the budget, in order to get our fiscal house in order.
Social Security beneficiaries will see a raise in their benefits next year, resulting from a 3.6 percent cost-of-living adjustment (COLA) increase. The last time seniors saw such an increase was 2009, when they received a 5.8 percent bump in their Social Security checks.