Slashing the nation’s $1.5 trillion federal deficit and strengthening the government’s fiscal outlook will be the focus of discussion Wednesday when President Obama’s bipartisan fiscal commission meets for a third time in Washington.
The commission will continue to weigh ideas and suggestions to shrink the deficit by 2015. The commission is scheduled to make recommendations to Congress by Dec. 1.
Many lawmakers have floated proposals to trim future Social Security benefits for millions of workers retiring 20, 15, even 10 years from now. The issue is of particular interest to AARP and its members.
John Rother, executive vice president at AARP, has urged the commission not to consider cutting the 75-year-old Social Security system. Reducing benefits, he said, could jeopardize the economic security of millions of retired people and people with disabilities who rely on it as their primary source of income.
“Social Security is financed separately from the rest of government with payroll contributions Americans make over their working lives,” Rother said in a statement.
“With the remaining retirement pillars—such as traditional pensions, personal savings and home values—crumbling, Social Security will play an even more important role in preserving the financial well-being of future generations,” said AARP CEO A. Barry Rand.
At the commission’s second monthly meeting in May, Sen. Judd Gregg of New Hampshire, ranking Republican on the Senate Budget Committee and a commission member, said he’d been creating a comprehensive list of ideas from fiscal experts and think tanks for ways to strengthen Social Security.
Former Republican Sen. Alan Simpson of Wyoming, co-chair of the commission, said he was confident the panel would recommend measures to “stabilize Social Security in a way that will not hurt people.”
At the commission’s first meeting on April 27, Federal Reserve Chairman Ben Bernanke told the panel that the task of developing and implementing sustainable fiscal policies “is daunting, but meeting this challenge is absolutely essential.”
He cited rising health care costs and the aging population as “primary forces” contributing to the deficit. He said that federal spending for Medicare and Medicaid has increased substantially over the past several decades because of the increasing number of beneficiaries as well as the rising cost per beneficiary. He also said the expanded number of retirees in the years to come will strain the Social Security program.
“The number of individuals expected to be working and paying taxes into the system is rising more slowly than the number of people projected to be receiving benefits,” Bernanke said.
“The projected fiscal imbalances associated with the Social Security system are notably smaller than those for federal health programs, but they still are significant and thus present an important challenge for policy.”
According to the White House, Obama appointed the 18-member commission to “put forth solutions to tackle our long-ignored fiscal challenges” so that the federal debt doesn’t grow faster than the economy.
The website for the fiscal commission, officially called the National Commission on Fiscal Responsibility and Reform, provides videos, testimonies, news releases and announcements. It also gives the public an opportunity to submit ideas and suggestions on how to address the nation’s long-term fiscal challenges.
Carole Fleck is a senior editor at the AARP Bulletin.