Recently the Senate Finance Committee held a hearing in which panelists gave “Perspectives on Deficit Reduction.”
Notes from Jessie Gibbons, TSCL Legislative Analyst
Recently the Senate Finance Committee held a hearing in which panelists gave “Perspectives on Deficit Reduction.” Members of the Committee heard testimony from four expert witnesses: Charles Blahous, Research Fellow at the Hoover Institute and Public Trustee for Social Security; Nancy Altman, Co-Chair of the Strengthen Social Security Campaign and Chair of the Pension Rights Center; James Roosevelt, Jr., President and CEO of Tufts Health Plan; and Alex Brill, Research Fellow at the American Enterprise Institute. At the hearing, Members and witnesses shared their opinions on whether or not Social Security should be included in the deficit reduction.
Nancy Altman was adamant that Social Security should be dealt with separately, and that when it is dealt with, Congress must listen to the American people. She cited polls showing that a majority of citizens do not want their benefits cut, and most do not want to see a raise in the retirement age. Senate Finance Committee Chairman Max Baucus (MT) agreed, and made his view clear that Social Security should be taken up separately from the deficit talks.
Others at the hearing – including Charles Blahous, Ranking Member Senator Orrin Hatch (UT), Senator Charles Grassley (IA), Senator Tom Carper (DE), and Senator John Thune (SD) – seemed open to dealing with Social Security as a part of the deficit reduction talks.
Many Members of Congress supported the ideas that the Fiscal Commission proposed late last year, but the panelists disagreed about some of the more controversial recommendations. When Senator Carper (DE) mentioned the chained CPI for use in calculating the cost of living adjustment (COLA), Nancy Altman and James Roosevelt both suggested the CPI-E, which would better reflect the spending patterns of seniors and thus would be a more fair measure to determine the COLA of retirees. Altman and Roosevelt also expressed their concern about raising the retirement age, which would result in a 7% benefit cut for every additional year of work. Surprisingly, Nancy Altman also expressed her concern about a hardship provision proposed by the Fiscal Commission; she worries that it will be too difficult to manage, and that it will quickly build up a backlog.
Charles Blahous and Alex Brill didn’t have major objections to any of the Fiscal Commission’s recommendations. Instead, they stressed the importance of taking action quickly.
At the hearing, the Senate Finance Committee didn’t seem much closer to reaching an agreement about Social Security’s future. Partisan issues continue to play a role in the debate. However, there is a consensus that modest adjustments will need to be made to the program, and that acting sooner rather than later will be crucial.