On the very day that a bleak jobs report showed how feeble the recovery is, the White House revealed that the president will propose a budget that features cuts in Social Security. This was designed to get Republicans to agree to negotiate a grand bargain on deficit reduction — or to prove that they are obstructing any deal.
House Speaker John Boehner’s reflexive reaction immediately revealed the political folly of the president’s ploy:
“If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes.” (Emphasis added)
Yes, we need to reform Social Security, but the reform should increase, not cut the income support that millions rely on. In an important political blueprint for sensible reform released by the New American Foundation, Michael Lind, Steven Hill, Robert Hiltonsmith and Joshua Freedman call for adding a supplement to Social Security that would guarantee all retirees about 60 percent of their average wage in retirement (similar to that of most other developed nations).
They would pay for the expanded benefit not by increasing the payroll tax rate but by eliminating tax breaks for the wealthy, particularly those now offered to private retirement plans that disproportionately benefit the wealthy (à la Mitt Romney’s famous $100 million IRA plan) They would also lift the payroll cap to make Social Security financially stable.