VSPs Get Their Way With Budget Deal: Social Security Benefits Are Cut

All the Very Serious People are jumping up and down and cheering.  We have a budget deal in the House and the debt ceiling is being raised and there will be no more artificial budget crises until after the new president is in office, hurray hurray hurray!  Not only that, all the Dems in the House voted for it, with everybody gushing gratitude to John Boehner for making it possible by resigning as Speaker to turn it over to reasonable Paul Ryan once Boehner could get this deal through the House, thwarting the evil Tea Party/Freedom Caucus bomb throwers who want to have a big crisis with the government shut down and indeed bankrupt outright. We are saved!

Well, indeed there certainly are these benefits.  But without much publicity, Paul Ryan is reported to be behind slipping into the deal something that he has long supported, entitlement benefit cuts, which have been heavily featured in past budgets he has proposed.  The particular cut is the ending in Social Security of the ability of couples to "file and suspend" with this being replaced by "deemed filing."  File and suspend allowed someone to get Social Security benefits prior to retiring, while not having to accept the lower benefits one gets if one retires at 62 or 66.  One can get the higher benefits later.  This will now not be allowed, so one must accept the lower benefits if one starts getting benefits early.  This has only been possible for  married couples with this involving one getting spousal benefits and then their own through some semi-complicated maneuvers that have been allowed since 2001.

So, while most commentators have simply ignored this item, or focused on some other changes that have involved propping up the disability part of Social Security (which has needed some propping), this is indeed a benefit cut and one that will affect people who are on the verge of  retiring (those already doing it I think are grandparented in), not non-voting Gen-Xers or millennials down the road, as would be the case for most of the proposals being made by the GOP presidential candidates (e.g. gradually raising the retirement age as has been going on for several decades thanks to the 1983 Greenspan commission).  Most of those who have noted this, particularly the VSP types, have applauded it, saying this has been sort of a scam and has been available mostly to higher income people.  There is something to this, but there is no doubt it is a benefit cut, and we did not see any cuts to any other programs, with in fact defense spending being allowed to rise.  Even though Cruz claimed this deal would raise the deficit during the latest GOP debate, it will not.  The bottom line is that Social Security benefits are being cut while DOD spending is increasing, and this was unanimously supported by Dems in the House, and probably will be also be in the Senate. What a farce.

Regarding Ryan, Paul Krugman and Dean Baker have done a good job of pointing out how off the wall the budgets he has proposed in the past have been, filled with asterisks, while he has somehow been praised over and over as this responsible Republican in the House.  Of course he has national recognition due to being Romney's VP candidate, and he has some favorable qualities, including even his desire to spend time with his family.  He looks like a reasonable person until one looks too closely.  However, it is a bit ironic that the VSP crowd is so enamored of him.  Their fave commission was the failed Bowles-Simpson one, with the long favored VSP deal being cutting entitlement benefits in exchange for a tax increase.  It should be remembered that the reason it failed (and its "report" was simply a document issued by Bowles and Simpson themselves, not the whole commission) was that some of the Republicans on the commission voted against its recommendations.  One of those who did so was Paul  Ryan. Why did they do so?  Because it proposed tax increases.  So, Paul Ryan is just great on cutting Social Security (and Medicare and Medicaid) benefits, but he is not in favor of  that crucial other piece of the VSP deal, tax increases. But that has not restrained their enthusiasm for him.

Oh, and WaPo in particular has continued to look like itself earlier today in a column by Charles Lane.  He mostly wastes time blaming Obama for all the failures of the VSP dreams to come true,  "kicking the can" down the road, although he mostly focuses in particular on Obama's "failure" to implement cuts to Social Security and healthcare, shame on him.  Lane mentions in passing these cuts in Social Security in the budget deal, but basically dismisses them, "too little, too late."  Only near the end does he mention in passing the unwillingness of  GOPsters to raise taxes, with his focus overwhelmingly on the "need" to cut those darned entitlement benefits, gosh darn it!

Barkley Rosser