NU Online News Service, Feb. 4, 2005, 5:20 p.m. EST
Members of Congress are facing financial pressure to cut Social Security benefits for members of a large group of baby boomers.[@@]
Douglas Holtz-Eakin, director of the Congressional Budget Office, pointed out Thursday in testimony on Capitol Hill that cutting benefits 10% for workers born in the 1950s could produce twice as much savings over a 40-year period as imposing the cuts only on workers born after 1959.
That example “is not intended as a recommendation,” Holtz-Eakin said at a hearing organized by the Senate Special Committee on Aging, according to a written version of his testimony.
But, if all other factors were held constant, “lower benefits for older workers would allow smaller reductions for future generations,” Holtz-Eakin said.
One problem, though, is that that projection “is based on the notion that all other tax policy and spending decisions are unchanged,” Holtz-Eakin said.
If policymakers cut benefits for the many workers born in the 1950s, then made changes that somehow lowered national savings, the money saved through the benefits cuts “could not be used to moderate future reductions in benefits,” Holtz-Eakin said.
The CBO testimony is on the Web at http://www.cbo.gov/ftpdocs/60xx/doc6068/02-03-SocialSecurity.pdf