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Thievery: How Congress Keeps Stealing From Our Retirement Benefits and Social Safety Net

Steven Rosenfeld| Alternet | Jan 21st 2014

government_stealing_moneyCongress has a nasty habit that’s not going away. It has been stealing a few billion here and a few billion there from earned retirement and safety net payments, overlooking whether those benefits have been promised or are even sufficient.

As the House and Senate passed its $1.012 trillion 2014 budget last week, veterans were blindsided when they learned that Congress had cut cost-of-living increases for retiree pensions by 1 percent. A master sergeant who served 20 years could lose $80,000 in his lifetime, said Col. Mike Barron of the Military Officers Association of America.

The cuts will affect 1.1 million retirees, 400,000 of whom retired after 9/11, and save an estimated $6 billion. “It’s deferred compensation,” Barron said. “You are changing the rules of the game in the middle of the game. It’s very unfair. It’s a clear breach of faith with us.”

But it’s not just military retirees who are prey to Congress’s petty thievery. In the Senate, there are competing Democratic and Republican proposals to extend unemployment insurance (UI) for 1.3 million longterm jobless people. Unemployment is another earned benefit that people pay into from years of work. The UI extension would be funded by taking money that now goes to Social Security disability recipients, so someone could not receive both unemployment and disability.

The GOP plan, proposed by Ohio Sen. Rob Portman, cuts off all disability benefits—so there is no so-called double-dipping. The Democratic plan, from Majority Leader Harry Reid, cuts back disability payments dollar for dollar, deducting whatever amount is received in unemployment. Eleven million Americans received disability benefits in December.

This Hunger Games mentality of playing off groups of deserving people against each other for earned social insurance is part of Congress’ nasty habit. The other nasty piece is what Congress has been doing since the 1980s with Social Security cost-of-living formulas: chipping away at yearly increases.

Going after promised pensions, or shaving back retirement benefits, or tinkering with cost-of-living formulas is hardly confined to Congress. It’s become a budget-balancing tactic that shadows government employees nationwide, and has equivalents in the private sector as workers pay more for their benefits.

In terms of magnitude, the several billion dollars involved in the military pensions and disability cuts pale compared to what’s at stake when tinkering with Social Security’s inflation formula.

When President Obama presents his 2015 federal budget next month, one of the biggest questions is will he again propose using a stingy cost-of-living increase formula for future Social Security payments, known as the chained CPI (consumer price index).

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