Billion Dollar Social Security Solution?
Melba NewsomeMelba Newsome is a Charlotte-based freelance writer. Her work has appeared in Time, the New York Times, Oprah and ARRP, among others.
At 84, billionaire Peter G. Peterson won’t be affected by any proposed changes to Social Security and, given his personal fortune (Forbes puts his net worth at $1.7 billion), it wouldn’t matter if he were. Nonetheless, Peterson is obsessed with fixing the entitlement program. He has spent the past 30 years warning that, unless we address the nation’s debt, deficits and entitlements programs, this country is headed for economic disaster.
Peterson’s pronouncements carry some weight, in part because he served as Nixon’s Commerce Secretary, Chairman and CEO of Lehman Brothers and founded the private equity firm, the Blackstone Group. In 2008 when he established the Peter G. Peterson Foundation with a personal $1 billion endowment. The foundation’s sole mission is advocating for cutting the deficits and debt and federal entitlement programs.
Throughout the years, Peterson has offered a number of remedies for Social Security. All of them include cutting benefits. His most recent solution came in November, 2010, and includes raising the retirement age, reducing cost of living and expanding the payroll Social Security tax.
Like anyone who advocates such a thing, Peterson has earned the scorn of progressives who view America’s compact with its seniors as sacrosanct. Liberal economists argue that the Social Security trust fund is solvent for decades to come and, thus there is no crisis. For them, Peterson’s concerns about the deficit masks another attempt by conservatives to dismantle the federal safety net since he was preaching the same sermon during the 90s when we had a surplus.
“Increasing the retirement age would hurt minorities hardest for two reasons,” says economist Dean Baker, co-director of the Center for Economic and Policy Research. “First, they are more likely to work at physically demanding jobs where it is more difficult to work into your late 60s. Second, they have shorter life expectancies than whites. Reducing the cost of living adjustments has the largest impact on oldest retirees, since the reductions are cumulative.”
Minorities disproportionately benefit from the disability and survivors programs that are part of the Social Security system and would suffer if that provision gets hacked.
Most deficit hawks admit that cutting social security benefits will do little to address our long-term deficits. Those, like Peterson, who propose that those who have the least, make the greatest sacrifice to set America’s fiscal house in order is neither fair nor credible.