Chris Christie: Cut Social Security for the Rich

Three reasons his proposal might not work.

Chris Christie says he wants to eliminate Social Security benefits for high-income earners, the Wall Street Journal reports.

MANCHESTER, N.H.—Gov. Chris Christie called for reduced Social Security benefits for seniors earning over $80,000 and eliminating the benefit entirely for individuals making $200,000 and up, along with raising the retirement age to 69 from 67.

“Social Security at its core should be retirement insurance,” Mr. Christie said during his speech before roughly 120 people. “The wealthiest of us don’t need these benefits.”

Time adds:

“Washington is afraid to have an honest conversation about Social Security, Medicare and Medicaid with the people of our country,” Christie will say in a speech at New Hampshire’s St. Anselm College Institute of Politics. “I am not.”

The idea could have some appeal — hey, why should Warren Buffett collect a Social Security check when he’s already super-rich? — but three reasons why Christie’s effort might not work all that well:

Social Security goes to everybody who has “paid in” in order to preserve its political support. The reason that rich people have collected Social Security benefits all these years — even if they don’t need the money — is a simple matter of political self-preservation: If rich people benefit from a program, they’re less likely to call for its demise. Cut the benefits at the top, and — theoretically at least — you create a situation where the people at the middle and the bottom might someday also lose their benefits.

The left-leaning Campaign for America’s Future explained this back in 2011:

Most Social Security advocates respond to the “only-cuts-for-the-rich” myth by arguing that such cuts, though harmless in themselves, are a slippery slope to bigger cuts, because they will turn the wealthy against the program. They are right. Social Security’s universality is what has allowed it to stay in good graces while support for other government programs has dropped off significantly.

Lots of activists know this history, so you can expect they’ll charge Christie with making an effort to undermine the overall program.

Cutting benefits for the rich probably won’t save that much money. We assume that preserving Social Security’s viability is Christie’s ostensible point here. Again from the Campaign for America’s future:

There is not enough money in the Social Security checks of the richest men in the country to buy the government an armored Humvee, let alone fill Social Security’s $700 billion shortfall. This is true first and foremost because Social Security benefits are already capped, and have been from the very beginning. So even if you’re a billionaire, your Social Security benefits are calculated on a wage base of $106,800. Whether you make $1 billion a year or $200,000, if you retire today at age 70 you will only be entitled to a $27,000 annual benefit from Social Security (in 2010 dollars, not adjusted for inflation).

Even if that $27,000 payment seems excessive to you, there are very few people in the country that are eligible for benefits that large.

Changing Social Security is hard. It’s been a decade now, but you’ll recall that President George W. Bush launched a privatization effort almost immediately following his re-election in 2004. “I earned capital in this campaign, political capital, and now I intend to spend it,” he told reporters.

The effort was a disaster. Along with Katrina and the Iraq War, it helped sink Bush’s popularity so low during his second term that he left office as one of the most unpopular presidents ever.

Privatization isn’t as radical as means testing, of course, but still: People don’t like it when you mess with their Social Security.

So maybe Christie is brave to do this. Will that result in the kind of payoff he’s looking for? History doesn’t seem to suggest this proposal can end well for him.

Follow @JoelMMathis on Twitter.