Social Security Cuts On The Table In Debt Ceiling Negotiations
Last week, President Barack Obama insisted that nothing could be off limits in talks to raise the nation's debt ceiling.
The president was mostly referring to tax increases on the wealthy, which Democrats have been pushing for in the deficit talks, and which Republicans have steadfastly opposed. But it now appears Social Security could be under the knife, according to Talking Points Memo.
Over the last few weeks, congressional aides, strategists and advocates have told TPM that a "stealth change" to the Social Security benefit structure is on the table.
The proposal wouldn't just impact Social Security benefits. It would also shave off yearly increases in federal pension payouts, and result in somewhat higher tax revenues. But the ratio would be skewed toward benefit cuts by a factor of about 2-to-1 and would represent a financial hit to even the poorest retirees unless they were exempted.
Under the current proposal being floated, the benefit cuts could be as high as 9.2 percent.
AARP CEO A. Barry Rand, whose organization is a major lobbying group for older Americans, said cuts to Social Security are not acceptable as part of a debt ceiling deal. But last month, the Wall Street Journal reported that AARP has privately conceded that trimming Social Security may be unavoidable.
Treasury Secretary Tim Geithner has said the government has until August 2 to raise the amount Congress can legally borrow. Failure to do so, Geithner warned, could cause an economic crisis.