Blinder's Blunder on Social Security
By David Henderson
In a Wall Street Journal review of Alan Blinder’s latest book, Advice and Dissent, Matthew Rees writes:
Mr. Blinder cites two measures to show what can be accomplished when economists and politicians work together. In 1983 the members of a Social Security commission put forward a bold and sound idea: gradually raising the retirement age to 67.
Assuming that Rees is correctly referencing Blinder’s claim, Blinder blundered. The Social Security commission, headed by Alan Greenspan, did no such thing. Instead, it proposed hastening an already programmed increase in the Social Security tax rate and extending Social Security to non-profits and other entities not covered at the time. Congress accepted these recommendations and put them into law.
So how did the rise in the age for full SS benefits come about? It was due to one Congressman, a Texas Democrat in the House of Representatives named Jake Pickle.
This isn’t a picky point. If it were, I wouldn’t make it. I make it because it undercuts what I gather is one of Blinder’s main points about how to get better policy: get a bunch of politicians and economists together on a commission that will give some political cover to the politicians who have to vote on it. The Social Security did give cover for hastening tax increases and catching more people in the SS net. But these commissioners balked at the most important reform: raising the age for full benefits. It took one traditional politician saying “Hell, no” to get that one reform.