So by now most of us know the Fiscal Commission's proposals were not passed by 14 of the 18 commissioners. Unfortunately, this does not mean we will not see this in the next few months during budget proposals. Paul Ryan, now House budget Committee Chair, plans on using 85% of the Catfood Commission proposals in his budget. I am sure we can wager those will all be the spending cuts. Obama has not yet slammed these proposals as pure crap, and Gibbs has said Obama will consider them in his budget as well. If recent history shows us anything, Obama is very eager to please the Republicans and will probably say something about how we need to make "tough choices" and this is a "serious" plan which needs consideration.
Here is a really good overview of how bad and offbase these proposals are from James K. Galbraith:
http://www.huffingtonpost.com/james-k-galbraith/casting-light-on-the-mome_b_791540.htmlAnd here is some info on how bad the Social Security proposals are:
Analysis of The Report of the National Commission on Fiscal Responsibility and Reform
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On December 1, 2010, the National Commission on Fiscal Responsibility and Reform released a report containing a set of recommendations for addressing the nation’s fiscal crisis. Their proposed changes to Social Security are especially troublesome, as they represent a completely unbalanced approach to changing Social Security. An overwhelming majority of the adjustments to the program come in the form of benefit cuts which will hurt generations of Americans, something repeated polls have shown the American people do not support.
The following outlines the changes and their impact on beneficiaries.
Increase the Retirement Age
Current Law: The normal retirement age (NRA), which is the age at which a person can apply for Social Security benefits without any reduction, currently stands at age 66. It is scheduled to remain steady until 2016, when it will begin rising at the rate of two months per year until it reaches age 67 in 2022 and subsequent years. No additional increases in the NRA are scheduled.
Workers can apply for benefits as early as age 62, although they incur a reduction for electing early retirement. Currently, the amount of this reduction is 25 percent. The reduction will rise to 30 percent for those workers whose NRA will be 67. Workers who qualify for disability prior to NRA avoid part or all of the reduction for early retirement, depending on the age at which they become disabled.
Proposed Change: Under this proposal the NRA would continue to rise after reaching age 67 in 2022 based on continuing increases in longevity. According to the description in the Commission’s report, the NRA would rise gradually until it reached 68 in about 2050 and 69 in about 2075. The rate of increase, according to the memorandum prepared by the Office of the Social Security Actuary, would be 1 month every two years. Whether there would be periods during which the NRA would remain constant or whether the rise would be continuous is not entirely clear.
In addition, the provision would gradually increase the early eligibility age (EEA) so that there would be no more than 5 years between the EEA and the NRA. For example, when the NRA begins its proposed increase to age 68 and then to 69, the EEA would increase in tandem with it so that no more than 5 years would lie between them. Thus, by 2050 the EEA would be 63 and by 2075 the EEA would be 64. As a result, the reduction for early retirement would remain constant at 30 percent.
To counter the impact of increasing retirement ages on workers in physically demanding jobs, the proposal includes an attempt to provide some relief. The proposal is not described in any detail, nor has it been evaluated by the chief actuary. However, the concept is that the Social Security Administration would be required to develop some form of accommodation in the form of a “hardship waiver” for these workers before the longevity indexation begins, which appears to be scheduled to occur sometime after 2022. The exemption would be limited to no more than 20 percent of retirees. In addition, the SSA would be required to “set aside funds to pay for the new policy.”
The SSA is already stressed by an unprecedented number of disability claims – projected to reach 1 million initial claims at the state level by the end of this year, with appeals of denied claims taking over 400 days to process. It is unclear how the new “hardship waiver” would interact with the existing disability process, or how it might be designed to avoid the extreme delays and costs associated with the disability program.
Impact: Increasing the retirement age is first and foremost a cut in benefits. The estimates prepared by the chief actuary reveal that gradually over time all workers would have their benefits reduced significantly. By 2080 the reduction would be about 15 percent.
The increases called for in this proposal rest on the premise that, because people are living longer, they can therefore continue working for more years. Although it is true that people, on average, are living longer, these longer life expectancies are by no means across-the board. Over the last quarter-century, the life expectancy of lower-income men increased by one year compared to 5 years for upper-income men. This is not surprising considering higher income workers are less likely to have physically demanding jobs and more likely to work in jobs with high-quality health coverage. Lower-income women have actually experienced a decline in longevity during that period. Yet the increases in retirement age apply to all workers, whether or not they are living longer.
In addition, increasing the retirement age would have a severe impact on workers who are not healthy enough to continue to work, even though they would prefer to do so, especially those who have physically demanding jobs. The Commission’s proposals provide scant comfort for such workers. By moving the early eligibility age up to 64, older workers would have no choice but to continue to try to work, unless they were able to qualify for disability benefits.
In acknowledgement of the detrimental impact of their proposals, the Commission offers up an alternative to disability that they want the Social Security Administration to develop. But it is not funded and is not described in any meaningful detail. In addition, it is limited to no more than 20 percent of retirees. Capping a provision such as this would mean that some otherwise-eligible seniors would fail to find relief under this provision. In addition to being unfair, it would be extremely difficult for the Social Security Administration to administer.
Finally, while many older workers may be healthy enough to work, jobs for them may simply not exist. Although studies have shown the many contributions older workers bring to their employers, most companies remain focused on the bottom line, which, due to higher health care costs, translates into a competitive disadvantage for older workers. Unless there is a dramatic change in employer attitudes or in the structure of our workforce, most workers will continue to retire well below their full retirement age. The Co-Chairs’ proposals to increase the retirement age will only add to the difficulties older Americans will face in the years to come.
Effect on Workers: Although the Commission’s proposal to index the retirement age to longevity plays out over many decades, the analysis by the SSA actuaries is consistent and clear. Future retirees will face benefit reductions that grow larger with each generation. By 2080, this proposal, by itself, will result in an across-the-board 15 percent cut in benefits for all Americans. This provision addresses about 21 percent of the current shortfall in the program.
READ THE REST:
http://www.ncpssm.org/news/archive/Analysis_of_Commission_Co_Chairs_Proposal/ 
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