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May 2013

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The Wrong Conversation

There is much to recommend in President Obama's first budget of his second term, including expanding access to education and $300 billion in jobs and infrastructure spending. But there is one item the president put on the table that is unacceptable for working families: slashing Social Security benefits.

Congressional Republican leaders have demanded cuts to Social Security and Medicare as a precondition for budget talks, and sadly too many Democrats, including the president, are going along with it.

Currently, the federal government ties the growth of Social Security benefits to the inflation rate — higher inflation means bigger boosts in benefits to retirees and the disabled.

Obama's proposal would change the way the government measures cost of living adjustments — a change that would result in cuts for current and future retirees — to the tune of more than $130 billion over 10 years. For millions of retirees, that amounts to losing a full-month's check.

This is the wrong debate America should be having. First off, numerous economists have shown that if Washington wants to reduce the debt, going after Social Security is the wrong way to do it.

The Social Security trust fund has enough to cover beneficiaries for the next two decades. And Social Security does not contribute to the overall national debt.

Secondly, this debate ignores the fact that we are living through what Forbes magazine has called "the greatest retirement crisis in American history."

Corporate mergers and downsizing have devastated private pensions, which are increasingly a thing of the past for most workers. And stagnant wages and tough economic times have left 75 percent of Americans nearing retirement age with less than $30,000 in private accounts like 401(k)s.

For millions of Americans, retirement isn't an option any more. So why is Congress debating how to slash many retirees' last lifeline? Corporate America, Congress and President Obama should say no to policies that make things worse for current and future retirees and should start talking about how we can make real retirement security accessible to all.


Also: Hill: Giving Good News Its Due Read Hill's Column

Salvatore J. Chilia

Salvatore J. Chilia
International Secretary-Treasurer