There is no commitment to finance Social Security out of general revenue. The projections from the Social Security trustees show the program first facing a shortfall in 2033 after which point it will only be able to pay a bit more than 75 percent of scheduled benefits. While this date is still fairly far in the future, at some point it will likely be necessary to address a shortfall.It is reasonable to expect that the changes needed to keep the program fully funded will involve some mix of revenue increases and benefit cuts. However if the chained CPI is adopted as part of a budget deal unconnected to any larger plan for Social Security then it effectively means that there will have been a substantial cut to Social Security benefits without any quid pro quo in terms of increased revenue. This hardly seems like a good negotiating move from the standpoint of those looking to preserve and strengthen the program.
The appeal of chained CPI is its complexity, which allows politicians to pretend they’re making a technical change rather than a real cut. This is a perverse approach to choosing deficit-reduction policies, and I’d like to see it stop.
You have to focus on the entire deal, and right now we don’t know what the deal is. Even Paul Krugman was going back and forth on whether the rumored deal is good or bad (although this morning he seems more con than pro). If the tradeoff is Medicare age or SS CPI, the CPI may be the least of the two evils.
What took him so long? Krugman has been such a relief to those of us in the United States, because the public culture is so bereft of critical perspective, but the fact remains that he's an apologist for the capitalist system, just not as bonkers as some of the others. I quote from his recent posting on the implications of the displacement of human labor power by robots, which means profits go to those who own capital, not those who actually work:Better education won’t do much to reduce inequality if the big rewards simply go to those with the most assets. Creating an “opportunity society”, or whatever it is the likes of Paul Ryan etc. are selling this week, won’t do much if the most important asset you can have in life is, well, lots of assets inherited from your parents. And so on.
I think our eyes have been averted from the capital/labor dimension of inequality, for several reasons. It didn’t seem crucial back in the 1990s, and not enough people (me included!) have looked up to notice that things have changed. It has echoes of old-fashioned Marxism — which shouldn’t be a reason to ignore facts, but too often is. And it has really uncomfortable implications.
The public culture of the United States is obviously an embarrassment, so I don't want to knock Krugman too much, since he's been the most visible voice for civilization in recent years...BUT look what he wrote: "the capital/labor dimension of inequality....didn't seem crucial back in the 1990s." He at least does a mea culpa, so kudos to him for that. Now that the Repugs have been trounced in the latest national elections, we need a real revival of the labor movement in this benighted country to recapture a larger portion of capital from its current heirs, and insure that it meets human needs in the decades ahead.