Mike Stark caught up with Democratic Majority Whip James Clyburn and asked him where he stood with regard to the Deficit Commission and potential plans to cut Social Security benefits.
Clyburn said he met with the commission yesterday, had confidence in its composition and had worked with Nancy Pelosi to choose the Democratic members from the House.
Mike asked him if he thought Social Security benefits would ultimately be cut. Clyburn replied “I don’t think it will be cut, I think there will be modifications, I think there will be adjustments.” But he also told Mike that he supports means testing, and that is explicitly a benefit cut:
CLYBURN To be fair — and I may get beaten up by some people on this, and that’s all right, I get beaten up a lot. But I think to be fair, you cannot possibly not modify a program that at the time of its enactment, we had 17 people working for every one person that was a retiree. Today, you have about three people working for every one person that is a retiree. Now that is unsustainable.
Now what we got to do is really get real about how we make that kind of adjustment. People are living longer, at the turn of the last century the life expectancy in this country was less than fifty years, at the turn of this century life expectancy got over 70 years.
When I was a little boy, my dad was 55 years old, I thought he was an old man. Come July 21 if all goes well, I’m going to be 70 years old. I’m not thinking about retiring. And so most 70 year olds I know are not thinking about retiring any more. And so all of that needs to be taken into consideration going forward.
STARK: Is means testing the fairest way?
CLYBURN: I think that’s one way we ought to be…we ought to be discussing means testing. I think that those of us who operate at the income level that I operate at ought to be means tested.
Clyburn is repeating George Bush’s debunked claim about “17 workers for every retiree” — there were a million people working for every retiree when Social Security was first implemented. The ratio declined quickly, and it’s been it’s been roughly 3:1 since the early 1970s. The actual dependency ratio (workers to nonworkers) reached its peak in 1965 and has declined ever since. Clyburn also echoes George Bush’s arguments about the population living longer. Because health care has improved more children do live longer. But life expectancy for those who reach age 65 has gone up relatively little since 1983 when the retirement age increase was enacted, so there is no reason to raise it now.
And while it’s great that Clyburn and the people he sees every day as a member of congress feel no desire to retire at a spry age 70, he can’t assume that those who spend their lifetimes enduring hard manual labor share those sentiments.
However, if the Treasury is indeed going to default on its bonds (as PIMCO’s Scott Mather is now predicting), it’s unclear why Clyburn thinks senior citizens who have paid into the Social Security trust fund should have to bear the burden of it (rather than, say, China).
As Dean Baker and Mark Weisbrot note in their book Social Security: The Phony Crisis, means testing puts a disproportionate tax burden on the elderly:
Some policy analysts and advocates have argued for “means testing” on the grounds that the government should not pay money to wealthy senior citizens while it cuts programs for poor chidren.
There are compelling reasons, however, to reject this approach. Most important is the danger that it poses to the program’s broad base of political support. One reason it has been so difficult to cut, privatize, or dismantle Social Security is that 43 million beneficiaries receive it. The more that base is reduced, especially by cutting off those seniors who have relatively more of a voice in politics the shakier Social Security’s position becomes.
It is not just the absolute numbers that are significant but the nature of the program as well. Social Security is a social insurance program in which retirement benefits are proportaional to one’s payments into the system. Means-testing would convert the system into a welfare program. And we know from the recent cancellation of the most important federal welfare entitlement, AFDC, how much more difficult it is to defend welfare against political attacks than it is to defend social insurance.
The justification for denying benefits to people who have paid taexs into the system is also questionable. We do not deny interest payments to the wealthy owners of U.S. Treasury bonds, for example, and it is difficult to se how the payment of Social Security benefits to rich senior citizens is any less appropriate. Indeed, why single out senior citizens as a group for special treatment in this regard? If we think that the rich are getting too much of the economic pie, then they should all be getting taxed more — not just the ones who happen to be over 65.
Is Clyburn saying that he agrees with PIMCO, and that the Treasury intends to default on those bonds? That would be news.
James Clyburn is a senior member of the Democratic leadership in the House. He has been meeting with the Debt Commission. He’s close to the White House, and he very much knows what everyone is planning and discussing. The fact that he is on board with Social Security benefit cuts (no matter what he wants to call it) should be of concern to everyone who cares about the future of the program.
Note: this post was edited slightly from its original version to clarify the points about retiree-to-worker ratio and life expectancy.