Although the deficit-reduction plan from Erskine Bowles and Alan Simpson, co-chairs of the President’s fiscal commission, didn’t get enough votes to secure the panel’s endorsement, some people think it should form the nucleus of a big deficit-reduction package. But when it comes to Social Security, the plan is sorely out of whack. We’ve previously panned the Bowles-Simpson approach to achieving Social Security solvency as unbalanced, relying excessively on benefit cuts rather than revenue increases. Our new report makes clear just how deep those benefit cuts – and how patchy the plan’s claimed protections for low and moderate earners – would be. In brief:
While Social Security is in solid shape in the near term —it can pay full benefits until 2037 without difficulty, and about three-fourths of scheduled benefits even after that — policymakers should take action soon to restore the program’s long-run solvency. But the Bowles-Simpson plan is not the right approach.