WASHINGTON – Former Sen. Fred Thompson promised fiscal conservatives Friday that he’d trim the cost of government by slowing the growth of Social Security benefits.
Stepping squarely onto an issue long known as “the third rail of politics,” the Republican presidential candidate said, almost in passing, that changing the formula that adjusts Social Security benefits to keep pace with the cost of living would keep the program solvent over the long term.
While he wasn’t specific, numerous academic studies have concluded that the only way such a plan could work is if it slashes future Social Security benefits by one-fourth to one-half below what’s promised under current law.
“We could have the same level of Social Security benefits, for example, and adjust the cost of living increases to cover inflation,” Thompson told the Americans for Prosperity Foundation convention, and that “would solve the problem for probably 75 years.”
Thompson has been slowly rolling out his Social Security idea. He told the Des Moines Register’s editorial board this week that he supports the idea of indexing the growth of Social Security benefits to goods rather than to wages. Wages tends to increase at a higher rate than do the prices of goods.
Thompson spokeswoman Karen Hanretty said the candidate hasn’t settled on details for how his formula adjustment would work.
However, President Bush’s 2001 Social Security Commission offered such a proposal. Under it, a worker born in 1977 who earned average wages and retired at age 65 would get Social Security benefits 27 percent lower than under the current benefit structure – $14,432 a year instead of $19,423, according to the Center on Budget and Policy Priorities, a liberal think tank.
There are many variations of possible “price-based” cost-of-living-indexes, but the only one that would eliminate Social Security’s solvency problem for 75 years by itself would require benefits to be cut by more than 50 percent by 2075, according to a 2005 study by the National Bureau of Economic Research.
Whatever formula Thompson settles on will likely be a difficult sell to a Democratic-controlled Congress and to the public. David Certner, legislative policy director for the AARP, formerly the American Association of Retired Persons, said the effect of shifting to a price-based benefit system starts small but compounds over time.
“It affects younger workers more than older workers,” he said. “I’m sure it appeals to certain sectors of the (Republican) base. But people generally don’t support cuts in Social Security.”
Thompson also vowed to extend Bush’s tax cuts and to cap corporate tax rates at 28 percent.
“I’ve got this complex economic policy: Let’s keep doing the things that work and quit doing the things that don’t work,” he said.