Obama deficit commission considers raising retirement age

The leaders of President Obama's bipartisan deficit commission are considering raising the retirement age to 69. (Photo Credit: Public Domain/Pete Souza/Wikipedia)

The federal deficit is in excess of $1 trillion, which will make the work ahead for President Obama’s bipartisan deficit commission difficult. However, as the Associated Press reports, commission leaders Erskine Bowles and Sen. Alan Simpson already have a dramatic plan of attack that will prove controversial. Reducing cost-of-living increases to government pensions, raising the retirement age to 69 and chopping down tax breaks like the mortgage interest deduction – among other changes – are up for consideration.

The deficit commission also wants to cut Medicare and Social Security

As if the above ideas aren’t unpopular enough, Obama’s deficit commission is also considering cuts to Medicare and Social Security payments. For these reasons, suggests the AP, it does not appear that a consensus among the 14 deficit commission members will be possible. Only then could the proposals be taken to the floor of Congress for debate.

Cost of living just became too expensive

The deficit commission’s idea regarding government pensions centers upon reducing annual cost-of-living increases. By changing the inflation measurement used in calculating COLAs, Bowles and Simpson figure the savings for America would be significant.

Along similar lines, Medicare COLAs would be cut, although the timing would surely be unpopular. As seniors already have to face the fact that there will be no Social Security COLA in 2011 – the second straight year without an increase – cutting benefits back even more could sow more seeds of dissent.

The retirement age problem

By 2075, the U.S. full retirement age would be 69 under the proposed deficit commission plan. France recently raised its retirement age, and that resulted in widespread rioting and disruption of utility and goods transport. The United States would face serious trouble, if such a measure could even make it off the ground, suggests the AP.

Decision time by Dec. 1

Obama’s deficit commission originally was slated to meet a Dec. 1 deadline for deficit-cutting ideas to bring before Congress, but current reports suggest it may be impossible within that time frame. The president has voiced a goal of cutting the federal deficit to 3 percent of the gross domestic product.

Sources

Associated Press