The Committee for a Responsible Federal Budget swallows AAA’s line about a cut in Social Security benefits not being a benefit cut. I wrote about it here.
The committee got AAA’s obfuscation and passes it along heartily:
So when the American Academy of Actuaries sent a letter to the Commission arguing for raising the retirement age, it was something worth noting……..
They point out that for all the years that the retirement age remained fixed (and even after adjustments included in 1983 legislation), retirees have been getting a de facto benefit increase, since they will spend more years collecting benefits in the system than previous generations. This increase comes on top of the fact that initial benefits grow with wage inflation and retirees have (for the most part) recevied annual COLAs.
Ergo, reducing benefits won’t be a benefit cut.
As before, I’m not upset that the AAA favors increasing the retirement age. I am upset that they are abusing the image of actuaries as honest brokers of information, because saying a reduction in benefits is not a reduction is, in my opinion, not honest.
I can think of another place where we can cut the deficit, using the AAA approach. The last time Social Security reform passed was 1984. A Senator made $72,600 a year. Today, that Senator makes $174,000. Let’s save $10 million a year by returning Senators’ salaries to where they were 26 years ago. We won’t be cutting their salaries, we will merely be returning it to where it was.