2014
Bloomberg.com is reporting on that Obama has backed off any support for changing the formula used to calculate the Social Security COLA.
I won’t get into that issue again, you can search it on this blog if you want to see the debate.
However, I found the closing paragraph in the Bloomberg article interesting.
Of course taking money from one pocket and putting it in another pocket doesn’t solve problems. But guess what, that is exactly what Obamacare is doing. The ACA is making health care “affordable” by and only by shifting costs from one group to another. Find me a way to truly lower costs by any way except to take money from someone’s pocket.
In addition, don’t we try to solve every social problem by taking money from taxpayer pockets and giving it to someone else?
Of course, the Social Security COLA thing is ludicrous. Giving someone a little less of more is not taking from anyone. Rather we should simply let the Social Security system continue to deteriorate? Or should we just keep raising taxes on working Americans?
Based on comments received here, seniors collecting SS don’t care about the solvency of the system, their children or grandchildren but just about the benefits they earned , paid for and are entitled to receive.
Two things to note: One, Obama was never a big fan of chained CPI. He expressed openness to the idea last year as part of a grand budget compromise with Congress. He has since lost faith that such a deal can be struck. Two, taking money out of one pocket and putting it into another won’t solve America’s serious long-term financial problems. For that, the only answer is reforms that truly lower costs and raise the economy’s
wealth-producing capacity. Bloomberg.com
QUINNSCOMMENTARY 
The flaw in the Chain-CPI change is that it is a benefit cut that gets larger as you get older. Chain-CPI does not measure inflation more accurately. It measures in part people’s behavioral response to inflation.
You have to decide what SS is suppose to be. If it is old age insurance, then cutting benefits as you get older is not much different than fixing a broken refrigerator by calling it a doorstop.
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“Based on comments received here, seniors collecting SS don’t care about the solvency of the system…” <— Based on my foray into local politics years ago, I am convinced that many retirees feel that way about many issues. They wanted what they wanted right now, with no concern how it would screw things up in the future. IT makes reform pretty much impossible.
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Indeed it does, but such views are not limited to seniors. In my town the sports nuts rule. They have convinced the town to borrow $5 million more for yet another sports field. They have no regard for the impact on taxes. As a frame of reference, my modest house on a 120×50 lot has property taxes of $12,600 already, others on my street are near $20,000. The town is about to borrow $16 million to deal with neglected repairs and upgrades for schools and the town manager tells us about the additional cost of the Cadillac tax from Obamacar (rather than adjusting the benefits so there is no tax to pay). Self-interest and stupidity in government are bankrupting us.
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Count me in as one who is currently collecting social security retirement benefits and is concerned about the future of the system.
My grown children sometimes make the casual remark that social security will be finished by the time they retire. I argue with them that it may be a self fulfilling prophecy unless they demand significant changes now.
There are at least a dozen solid proposed fixes to the long time problem of social security funding. The Bowles Simpson group put forward many of them. The fixes must be significant but, at least right now, do not have to be drastic. The longer the problems linger, the more the fixes drop into the drastic category.
I think it was Churchill who said that Americans eventually do the right thing, after having exhausted all other possibilities.
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You are 100% correct and the sooner the politicians stop playing politics, the less pain there will be for all.
Dick
Richard D Quinn
Blog http://www.quinnscommentary.com Twitter @quinnscomments
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It seems to me that the longer social security goes without an actuarial fix. the more likely it will be fixed by means testing. So if you have saved for your own retirement, have a pension, contributed to 401K ect, this may all work against you. Means testing will use some formula based on your adjusted gross income to cut back on your social security benefit. This will also help bring about income equality that progressives love so much but it certainly will be a disincentive to save for your own retirement.
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Excellent point
Dick
Richard D Quinn Quinnscommentary.com
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There is a calm about the crisis forming in SS because people think that we have so many options. Social Security is already means tested in the way you suggest. What people think is a tax, is actually a means-tested clawback of benefits – all of the revenue on SS benefits collected on the 1040 is returned to SS.
Everything that you are predicting happened 40 years ago.
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