Thursday, November 11, 2010

Fiscal Commission's Initial Recommendations Threaten Elder Economic Security

Recommendations released yesterday by the co-chairs of the President’s National Commission on Fiscal Responsibility and Reform do not represent the wants or needs of the American people.

The co-chairs of the bi-partisan fiscal commission have issued recommendations that fall hard on middle- class Americans, especially elders. A formula change in calculating Social Security benefits would reduce benefits for one in two Social Security beneficiaries. Also recommended is yet another rise of the retirement age (except for an unspecified “hardship exception” for those unable to work after age 62). Under the proposed plan, the annual cost-of-living adjustment (COLA) would be reduced to account for a “substitution” effect, such as substituting pork for beef. Furthermore, the changes proposed to our nation’s most successful social program would hurt the economic security of future retirees by cutting retirement benefits for young people just entering the workforce by more than 35%.

Though the proposal does mention increasing the cap on wages subject to the Social Security tax to increase revenue, overall the report relies more heavily on reducing spending than on raising revenues through tax reform. Programs like Meals on Wheels and Low-Income Home Energy Assistance would be subject to annual across-the-board cuts if discretionary programs as a whole were not reduced to meet annual caps.

From our recent opinion research conducted by Lake Research Partners as part of  WOW’s Building Bridges to Economic Security Campaign, we found that Americans of all ages and political affiliations support programs, like Meals on Wheels, that help vulnerable populations stay afloat. In fact, 93% favored the maintenance of this crucial program. A secure retirement topped the list of all the things Americans wished they could save for – with almost 4 in 10 wanting to do so – and many voiced concerns about potential cuts to Social Security as adding to the uncertainty of their family’s ability to be economically secure.

Though the full report will not be released until December 1, these initial recommendations as a whole do not bode well for the economic security of current and future retirees absent an outcry from the public. WOW urges the Commission and Congress moving forward to propose ways to build, not diminish, the economic security of Americans across the generations.

Susan Rees
Director of National Policy & Projects

Alisha Howell
Communications & Program Coordinator
Elder Economic Security Initiative

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