One of the astonishing things about the so-called ‘fiscal cliff’ negotiations is how many politicians and people in the media talk of raising the marginal income tax rates on the highest earners by a small amount as a quid pro quo for raising the retirement age for Social Security (currently 67 for those born in 1960 and later) and the eligibility age for Medicare (currently 65). They seem to treat those as if they were somehow equal-valued chips in a game.
They are not. The tax rate hike has an impact on a very small number of people who will hardly feel it while the raising of the ages has a huge and seriously harmful effect on a vast number of people. There is no way in which the two are even comparable.
The trouble is that the people who think so are those with cushy, well-paying jobs, in air-conditioned and heated offices with good health benefits. For them working a couple of extra years before being able to retire may not be a problem and in fact they may well want to continue working even though they don’t need to because their work is easy and enjoyable. But as I wrote in a post over two years ago that examined the arguments presented in favor of raising the ages, the view looks quite different for those who do hard, physical, soul-killing work and for whom finding private health insurance for a couple of extra years after they reach the eligibility age of 65 could be a huge, even ruinous, burden. Furthermore, forcing older people to work more years reduces the number of available jobs for young people entering the workforce. This Tom Tomorrow cartoon from a few years ago is even more apropos now.
And it is not as if Social Security benefits are extravagant. The current average benefit is just $1,230 per month or $14,760 per year which is below the poverty threshold of $15,130 for a couple. For someone born in 1950 currently earning the median income of around $50,000, their benefit on retiring at the age of 66 would be around $1,540 per month. The maximum payout is $2,750 per month, given to very high-income earners, those earning over $190,00 or so and fall in the top 5% of wage earners.
I think that the retirement ages when you can get full Social Security benefits and Medicare are too high now. Under no circumstances should they be raised even higher. We can reduce health care costs by going to a single-payer system, and the Social Security trust fund can easily be made solvent into the foreseeable future by eliminating the salary cap (which is currently $110,100) on payroll taxes.
Gutting Social Security and Medicare has long been the dream of the oligarchy, and the Democrats, as one arm of the oligarchy, cannot be trusted to be stalwart defenders of those programs. If Barack Obama and the Democrats make any noises whatsoever about touching those two programs, they need to be met with a barrage of angry protests. Because they will sell us out in a heartbeat if they think they can get away with it.