Relevant and even prescient commentary on news, politics and the economy.

“One neat trick to stop Social Security ‘Reform'”

Republicans constantly try to bring Social Security into ongoing debates about ‘Balanced Budgets’. But they face a fundamental problem with their math. For a variety of reasons, some quite reasonable and others nakedly political (seniors vote) nearly every ‘Reform’ proposal out there promises to hold 55 and older harmless. Meaning you can’t have any more than miniscule effects on Cost projections until today’s 54’s and younger start retiring. Except for a handful of early retirees that event happens 11+ years in the future, which is to say outside the 10 year Budget Scoring window.

You can’t have a fix to a problem scored over 10 years with a solution starting Year 11. Sure the ‘Reformers’ will blather about “Infinite Future Horizons”. But any proposal that spares current seniors from cuts will score close to zero by CBO and JCT. You just have to count years on your fingers.

CBO Budget and Economic Outlook: 2015 to 2025

CBO Budget and Economic Outlook: 2015 to 2025

Document link for Robert’s post. Lots of numbers here, including a new
Jan 2015 Baseline for Social Security
Just started poking at the numbers but it seems that CBO has revised projected revenue for SocSec down going forward. Not by a lot but perhaps enough to make Brother Krasting happy. But in the interest of ‘Numbers for All!!!’ and before I dive back in here are the links for Bears to start their own foraging.

Update: Well I found the smoking gun that drives those revenue forecasts. It is on page 114 in App A.

A change in CBO’s forecast of economic growth lowered
revenue projections for the 2017–2024 period. CBO has
slightly reduced its projection for the pace of economic
growth over the 2016–2019 period: Real (inflationadjusted)
GDP is now projected to be about 1.1 percent
lower, on average, over the 2017–2024 period than CBO
anticipated in August, and nominal GDP—the main
source of taxable income—is projected to be lower by
1.2 percent over the same period. (The projection for
inflation as measured by the price indexes for GDP is
little changed.)
Consequently, CBO also has lowered its projections for
wages and salaries—the most highly taxed type of income
specified in the economic forecast—by an average of
1.2 percent over the 2017–2024 period. That change
in the forecast has led CBO to make a downward adjustment—of
slightly more than $300 billion (or 1.1 percent)—in
its projections of revenue from individual
income and payroll taxes for that period.

I will leave it to smarter Bears to see if these drops in GDP and wages make sense.