Obama is scrapping his previous offer to trim cost-of-living increases in Social Security and other benefit programs. That idea had been a central component of his long-term debt-reduction strategy, even though it was considered odious by many Democrats.Last March, I wrote this:
But I guarantee that Democrats will run screaming from even this paltry, barely-a-scratch, adjustment because "scaring Grandma" is their biennial approach to winning elections.The chained-CPI proposal aims to bring benefit increases closer to reality by factoring in substitution costs. The Social Security Administration's chief actuary estimated this would reduce typical benefits by $4 a month. Denying Grandma of a copy of People magazine was a bridge too far, I guess.
I've also written before that we will never reform entitlements and more's the pity for younger Americans who may be foolishly credulous about future benefits:
For Social Security to continue to exist as it does today, Congress must figure out a way to shore up the expected deficit in the program. Otherwise, it will have to resort to paying out reduced benefits.That's right, kids, Social Security is on a glide path to an automatic cut. The average SS monthly benefit is around $1200 right now so a one-quarter cut is $300. But $4 today? Oh heavens, no...election's coming.
According to forecasts made by the Social Security Board of Trustees, there should be enough money coming into the program to pay out only about three-quarters of total expected benefits starting in the year 2032. “So if you were to receive $1,000 a month, it is projected that you would only receive $750 a month instead,” says Derrick. “Those benefits should be intact through the year 2086,” she notes.