The bipartisan committee working on deficit reduction announced a plan today to reduce cost-of-living increases in Social Security: But don't worry—it looks like that proposal is going nowhere fast.
But there's more: Not only are there provisions for freezing Social Security cost-of-living increases, but a Bloomberg article on the same topic suggests the possibility of an increase in retirement age as well. (Breathe deeply : The retirement age increases wouldn't kick in until at least 2050.) There are also additional proposals being floated by the commission for the reduction of federal expenditure on Medicare.
How bad is the situation? And does the system really need a dramatic overhaul?
Co-chairman Erskine Bowles seems to be suggesting that it's pretty grim: "This country’s out of money and we better start thinking." He continued, "Without 'tough choices…we’re on the most predictable path toward an economic crisis that I can imagine." Not subtle.
The "National Commission on Fiscal Responsibility and Reform," was created by President Obama with the objective of reducing the deficit and improving the fiscal situation of the country. Instead of ceding the deficit reduction process to a highly partisan Congress, the goal was to develop a mechanism for getting good, bipartisan proposals—and then to vote on them in the least politicized way possible.
The commission is composed of both Democrats and Republicans currently serving in the House and Senate with experience in fiscal matters, a few senior former lawmakers and government officials, and several member of the business community.
The process seems fairly straightforward: Have the commission review and vote on proposals to reduce the deficit; then, after approval by the commission, submit the proposals to Congress. Congress must then vote up or down—with no ability to introduce amendments.
Here's the rub: 14 of the commission's 18 members must approve a proposal before Congress can consider it.
Not surprisingly, based on the content of the proposals, some of the early opposition sounds fairly entrenched. From The AP:
"This is not a proposal I could support," said Rep. Jan Schakowsky, D-Ill. "On Medicare and Social Security in particular, there are proposals that I could not support."
According to an About.com article, Social Security and Medicare are the two largest single line items of government spending in the federal mandatory budget, which represents 56 percent of all government spending.
The breakdown of spending within the mandatory federal budgetis as follows:
- Social Security—$730 billion
- Medicare—$491 billion
- Medicaid—$297 billion
- TARP—$11 billion
- Jobs Programs—$25 billion
- Health Care Reform—Budget reduction of $17 billion
- All other mandatory programs—$619 billion. These programs include
Food Stamps, Unemployment Compensation, Child Nutrition and Tax Credits, Supplemental Security for the Disabled and Student Loans.
(Compared to Social Security and Medicare, TARP funding it's chump change.)
So if you want to tackle the deficit, you have to tackle mandatory spending: And if you want to tackle mandatory spending, you have to tackle Social Security and Medicare.
It is of course too soon to say whether the commission will ultimately be successful or not. If they succeed, however, it will be a testament to their individual commitment and fortitude -- as well as a tribute to a bipartisan process. And if they fail, it will prove that the political divisions between Democratic and Republican lawmakers run far deeper than the structure and rules governing the congressional voting process.
Note: Tip O'Neill is generally credited with coining the phrase Third Rail of American politics in relation to Social Security. But the political body count on Social Security predates the phrase: The Washington Post's obituary of Barry Goldwater cites his criticism of Social Security as one of the key reasons why he lost the 1964 presidential election—and Ronald Reagan was elected president in 1980 only after changing his position on the issue.
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