Retirement

Obama Draws Fire for 'Chaining' Social Security

Friday, July 15, 2011

As the deadline to avert a U.S. debt default looms, Obama is proposing lowering cost-of-living increases for Social Security. Women's advocates cry foul, saying it's not a "shared sacrifice" and unfairly punishes the elderly.



(WOMENSENEWS)--President Barack Obama reportedly left talks on deficit reduction late Wednesday with the warning that Social Security checks might not go out next month if lawmakers can't find a way to raise the government's borrowing limit before a default on Aug. 2.

Advocates for women's financial security find that worrisome. But while a default could delay checks by days or months, the president's offer to lower cost-of-living increases for older Americans could cause worse damage by shrinking benefits for generations.

Obama urged congressional Democrats Monday to back his plan to make cuts in the cost-of-living adjustments for Social Security beneficiaries in exchange for Republican support to raise taxes in a deal to increase the national debt ceiling.

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Maria Freese, director of government relations of the Washington-based National Committee to Protect Social Security and Medicare, objects to that bargain.

"Proposing cuts in a self-financed program paid for by Americans throughout their working lives to get Republicans to close tax loopholes and end tax breaks for the wealthy few is not shared sacrifice," she said in a telephone interview.

Advocates for maintaining the safety net for elderly women, children and other groups served by entitlement programs argue that the deficit has spun out of control because the United States has spent $1.3 trillion on the wars in Afghanistan and Iraq. Tax revenues also have plummeted during the recent recession--the most severe since the 1929 crash--because of the Bush-era tax cuts on the country's top earners.

Republicans argue that making cuts in military spending, which represents 21 percent of the federal budget, won't lead to long-term solvency. They favor cuts in entitlement programs, such as Social Security ($761 billion of the total budget) and Medicare ($468 billion of the total budget), because over the next 30 years the percentage of the labor force under 55 will stagnate, providing less payroll taxes to fund these programs. They also oppose raising taxes because the economy is so fragile.

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