Some Reasons Why We Should Not Cut Social Security Benefits

Social Security Benefits Do Not Contribute to the Federal Deficit

Representative Reid Ribble and others are calling for reductions in Social Security benefits as a part of the effort to reduce the federal deficit. This is wrong in several ways.  First, Social Security payments do not contribute to the federal deficit. Social Security is fully funded by the social security tax, which is collected from workers and employers. So, cutting Social Security benefits would not do anything to reduce the deficit. In fact, it might very well increase the deficit because people whose benefits were cut would become poorer, and some of them would apply for food stamps or other programs that are paid for out of the federal government’s general revenue, thereby contributing to an increase in the federal deficit.

Cutting Benefits Would Place an Unfair Burden on the Old

Second, cutting benefits would place the burden of making Social Security itself solvent for the long term entirely on the old. Although Social Security does not contribute to the federal deficit, the program has its own long-term financial problems that have to be fixed. Social Security will become unsustainable during the next 20 years if we do not find a way to improve its finances, but there are several ways to do that without cutting benefits. We can raise the level of wages that are subject to social security tax, we can tax non-wage income like interest income, dividend income or capital gains, or we can raise the social security tax rate slightly (2%). Some combination of these can make Social Security solvent for the foreseeable future while spreading the burden equitably among all of us. In contrast, cutting Social Security payments would place the burden of making Social Security solvent for the long run entirely on a group many of whose members are already poor. Many old people are already struggling to make ends meet. Such people include elderly veterans, and we should certainly not reward their selfless sacrifices by making their last years harder than they already are.

Cutting Benefits Would Hurt the Economies of Wisconsin and the Fox Valley

Third, cutting Social Security benefits would harm the economies of Wisconsin and of the 8^th Congressional District where we live. In Wisconsin, more than 1.1 million people collect Social Security benefits, and their benefits contribute almost $16 billion to the state’s economy. In the 8^th Congressional District alone, 141, 855 people receive total benefits of $2.02 billion. Almost all of these dollars are spent locally. They create jobs and contribute to the profits of local businesses.  Cuts to Social Security benefits would thus directly harm the economy of our area by reducing the amount that Social Security recipients spend. Be careful what you wish for. You might get it.