Chris Christie says his Social Security plan hurts the rich, but it really hurts the poor

In a speech delivered April 14 in New Hampshire, New Jersey Governor Chris Christie proposed a large across-the-board cut in Social Security benefits that would primarily target poor Americans. In a remarkable bit of political salesmanship, he also managed to get this covered in the press as primarily a proposal to reduce benefits for wealthy retirees.

The proposal is part of an effort by Christie, whose 2016 chances have dimmed considerably in recent years, to position himself as the Republican brave enough to take on the politically difficult fights the rest of his party won't. In recent years, congressional Republicans have decided to back off any cuts to Social Security — Rep. Paul Ryan's budget, for instance, simply punts on the issue altogether. But Christie is proposing real cuts here, even if he's obscuring whom they'll hurt most.

What did Chris Christie propose, exactly?

It's difficult to get too exact, because Christie gave a speech rather than release a white paper (here's a fact sheet). But his proposal has two parts:

• "I’m proposing we raise the age to 69, gradually implementing this change starting in 2022 and increasing the retirement age by two months each year until it reaches 69."
• "I propose a modest means test that only affects those with non–Social Security income of over $80,000 per year, and phases out Social Security payments entirely for those that have $200,000 a year of other income."
• He also added the qualification that these proposals would not apply to people who are currently old:

Let me be clear. The changes I propose today would not affect seniors currently in these programs or seniors approaching retirement. Let me repeat that: these changes will not affect you, but will save these programs for your grandchildren. Anyone who tells you differently is simply not telling you the truth.

Christie brilliantly executed a bait and switch

Although the retirement age section of Christie's proposal is both more quantitatively significant and targeted to especially inflict pain on the poor, Christie spent more time talking about the case for his smaller cuts on the rich. And he succeeded in framing much of the media conversation around this idea.

Heather Haddon and Nick Timiraos of the Wall Street Journal, for example, wrote this after having been shown advance sections of the speech:

Mr. Christie’s proposal would reshape Social Security from its New Deal origins as retirement vehicle for most working Americans into a program that taxes workers at all income levels but pays benefits only to those without other major sources of retirement income.

"What Christie is doing is huge," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates debt reduction. "This is certainly farther than anyone has gone about being specific about hard choices."

Again, it is true that Christie's plan has this feature. But the specific choice that generates the bulk of the savings is a broad cut in benefits that cuts proportionately more from the poor.

Luciana Lopez and Scott Malone of Reuters likewise made this the very first sentence of their story on the plan: "New Jersey Governor Chris Christie, risking a backlash from older Americans, on Tuesday proposed cutting Social Security retirement benefits for the wealthy as he sought to stand out from a crowded Republican 2016 presidential election field."

Max Ehrenfreund of the Washington Post focused his column on Christie's "explosive" proposal exclusively on the cuts to the rich, rather than the larger across-the-board cut.

Christie himself further encouraged this by going on conservative talk radio to snark, "It's good to see that the left are defending the rich."

Raising the retirement age is terrible for the poor

The key thing to know here is that most people actually begin collecting Social Security benefits at the "early" retirement age of 62 rather than at the full retirement age, which is currently 66 but rising to 67. People who retire at 62 rather than 66 get smaller checks from Social Security, but most Americans do it anyway, because they need the money, hate their job, or both.

Christie's proposal isn't just to raise the "full" retirement age to 69; he also says, "We need to raise the early retirement age at a similar pace — raising it by two months per year until it reaches 64 from the current level of 62."

In other words, Christie would actually change the age at which people start collecting benefits.

As the average American's life expectancy at 60 is about 21 years, this means Christie is effectively proposing an across-the-board benefit cut of almost 10 percent in Americans' lifetime Social Security benefits.

Except this is a particularly cruel and regressive form of cut, because life expectancy is longer for richer people. Inequality in life expectancy is also growing over time.

Because this Social Security cut would be large and apply to essentially all Americans, it would substantially reduce the federal deficit over the years. The Simpson-Bowles Commission proposed a similar idea, which officially — and rather unhelpfully for the sake of comprehension — scored as reducing the deficit by 1.22 percent of taxable payroll in the very long term. Because it's phased in gradually, it's less than that in the short term, but we're talking hundreds of millions of dollars over a 10-year period. And the people most impacted would be the poor: they tend to retire earlier, and they've seen the least increase in life expectancy.

This is also a particularly painful cut for people with unpleasant jobs. Politicians don't tend to retire at age 62, and neither do political pundits or think tank scholars, because people in these jobs tend to enjoy them. Proposals to raise the retirement age tend to be popular with this cohort.

Many people, however, have jobs that force them to stand on their feet eight or 10 hours a day, doing rote work for a boss they dislike, and they want to retire as soon as they can. These are the people who will be particularly hurt by raising the early retirement age.

Christie's progressive benefit cut would impact few people

Christie successfully managed to attract more attention to his other proposal, a reduction in benefits for retirees with over $80,000 in annual income and the elimination of benefits for retirees with over $200,000 in annual income.

This is not many people.

Lots of Americans earn at least $80,000 for at least some portion of their lifetimes but to earn $80,000 in a year while you're retired most likely requires $1 million or more in non-housing assets. To earn over $200,000 a year purely in investment income is very rare. As Christie himself said in his speech, this idea "would affect less than 2 percent of all recipients" and thus save only a modest amount of money.

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