Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, February 2, 1993 TAG: 9302020217
SECTION: NATIONAL/INTERNATIONAL PAGE: A8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
ANALYSTS: BIG SAVINGS POSSIBLE
Estimates from Congress' top budget analysts Monday indicate that proposals being studied by President Clinton to trim Social Security benefits would save the government billions.Clinton aides have been saying since last week that in his drive to pare $145 billion from the budget deficit in 1997, the president is considering reductions in Social Security payments.
"The president is reviewing all of his options right now. When he has his program prepared, he will announce it," White House spokesman George Stephanopoulos said Monday.
The option getting the coldest reaction from the Democrats who dominate Congress is one which would eliminate the annual cost-of-living increase Social Security recipients receive next January. Democrats say the proposal would be a blow to the poorest Social Security recipients.
"That's a death wish and let's get it out of the way and forget it right now," Sen. Daniel Patrick Moynihan, D-N.Y., chairman of the Senate Finance Committee, said of the idea Sunday on ABC-TV's "This Week With David Brinkley."
The average Social Security beneficiary receives $653 a month and will get a roughly 3.2 percent increase because of 1992 inflation.
According to Congressional Budget Office estimates released Monday, eliminating the cost-of-living increase due next January for Social Security and railroad retirement beneficiaries would save the government $6.6 billion in fiscal 1994, which starts Oct. 1. It would save $41.5 billion over the next five years.
The budget office considered the railroad retirement program, which covers many railroad retirees, because it is similar to Social Security.
Democrats have said they would rather see an increase in taxes paid by the most well-off Social Security recipients.
Retirees earning less than $25,000 a year - or $32,000 for couples - pay no taxes on their Social Security benefits. If they exceed those caps, they pay taxes on half their benefits.
The Congressional Budget Office estimated that if they instead owed taxes on 85 percent of their benefits, the government would raise $2.8 billion in 1994, and $31.5 billion over five years.
Some other savings, over five years, that the Congressional Budget Office released Monday:
Hold the cost-of-living increase for Social Security to two-thirds of the inflation rate for five years: $39.7 billion.
Pay the full cost-of-living increase for benefits up to $600 per month, but give just half the increase for benefits exceeding $600: $9.2 billion.
Tax half of Social Security benefits, regardless of the recipients' income: $43.6 billion.
Tax 85 percent of Social Security benefits, regardless of the recipients' income: $112.5 billion.