The Guest Blog

Opinion: President Obama Plans to Cut Social Security Next

Lawrence A. Hunter, President, Social Security Institute

President Obama is playing “Watch the Birdie” with Americans over the age of 50, diverting their attention with handouts and scare tactics to hide in plain sight the enormous damage his policies are doing to the retirement safety net.

First it was Medicare. The ObamaCare legislation drops a few free goodies like breadcrumbs in front of Medicare recipients (such as free diagnostics and annual checkups) to draw their attention away from the enormous cuts in Medicare being used to help pay the freight for the new national healthcare system. Additionally, the White House has engineered a full-blown propaganda campaign, coordinated with the AARP, to deceive Medicare recipients and baby boomers about the magnitude and the implications of the $575 billion in Medicare cuts being used to help pay for ObamaCare. Even more deceitfully, using TV icon Andy Griffith in a taxpayer-funded TV ad to talk about how happy days are here again, the Obama Administration and its mouthpiece AARP are attempting to hoodwink people over the age of 50 about the inherent healthcare rationing sown into the very fabric of ObamaCare.

Medicare’s own Chief Actuary has already publicly reported that the Medicare payment rates for the doctors and hospitals serving retirees will be cut by 30 percent during the next three years. The details buried in the Medicare Trustees report reveal that still further Medicare cuts adopted in the ObamaCare legislation add up altogether to $818 billion during the first 10 years of full implementation, and $3.223 trillion during the first 20 years, just for Medicare’s hospital program (Part A, HI). Counting the cuts for Medicare physician reimbursement under the Part-B program brings the grand total in Medicare cuts to $1.048 trillion during the first full 10 years, and $4.95 trillion during the first 20 years.

President Barack Obama
Photo by: Pete Souza

Now the president is coming after Social Security.

In his Saturday radio address on August 14, President Obama revealed he is already moving on to cut Social Security.

But again, he is playing "Watch the Birdie," this time using scare tactics rather than sweeteners.

In that address, he denounced the idea of solving Social Security’s problems by allowing young workers the freedom to voluntarily choose to save and invest some of their taxes in their own personal retirement accounts, an option federal employees already enjoy. The president rejects fixing the Bernie-Madoff Ponzi scheme currently used to finance Social Security with some form of personal accounts to begin pre-funding Social Security with real saving and investment. Instead, he rails about “privatization,” an incendiary (and false) characterization of voluntary personal retirement accounts intended to scare the bejeebers out of the American people.

President Obama thinks Americans over the age of 50 are stupid and can be demagogued with false claims about their benefits.
President, Social Security Institute
Lawrence A. Hunter, Ph.D

President Obama knows that all these account proposals affect only younger workers and do not touch the benefits of today’s retirees or the baby boom generation soon to retire. Moreover, congressional proposals for voluntary personal accounts have maintained the safety net of Social Security, guaranteeing that workers would get at least as much as Social Security promises now.

But President Obama thinks Americans over the age of 50 are stupid and can be demagogued with false claims about their benefits. The far-left faction in the Democratic Party just can’t stand the idea of workers and retirees supporting themselves more through the private sector. They call that “privatization,” which means too much filthy capitalism for their tastes.

So the question remains: What is the president up to?

How does he propose to solve Social Security’s long-term financial crisis, which even his own Presidential Debt Commission realizes is real? Without some form of real saving and investment for workers to begin prefunding their retirement, the only alternatives remaining are to raise payroll taxes or cut benefits—and that is precisely what President Obama’s Debt Commission is planning.

One might think raising payroll taxes is out because President Obama pledged over and over to get elected that he would not raise taxes on anyone making less than $250,000 a year. If he refuses even to consider personal accounts as inconsistent with his socialist ideology, he will never be able to deliver on that promise.

As to benefit cuts, this is exactly what the Presidential Debt Commission is plotting to reveal right after the November election. Former Sen. Alan Simpson, co-chairman of the Commission, tipped the Commission’s hand recently when he described Social Security as a “milk cow with 300 million tits.”

Leaks indicate that among the options being considered are delaying the retirement age (sounds like a panacea to bureaucratic pencil pushers who never did a day of hard labor in their lives), changing the basic benefit formula to reduce future benefits, and delaying or slashing COLAs.

Apparently, President Obama’s concept of spreading the wealth includes sacking both the Medicare and Social Security systems on which America’s retirees have come to rely. That’s some progressive vision of “fiscal responsibility:” Put seniors out in the cold and into an early grave.

Dr. Lawrence A. Hunter is President of the Social Security Institute, a 501(c)(4) non-profit organization, and Senior Fellow at Americans for Prosperity and the Institute for Policy Innovation where he does economic research and writes reports on a diverse range of public policy issues. Dr. Hunter has worked as a business and economic consultant for numerous private firms and non-profit organizations and served on the White House staff as a policy advisor to the president during President Ronald Reagan's second term. He was Chief Economist and political advisor for Jack Kemp at Empower America between 1996 and 2005.