This Social Security package would restore long term solvency, go a long way towards protecting it from would-be privatizers, and enhance benefits for the lowest lifetime earners through two new provisions. It also includes a tax max increases, which progressives tend to support. The benefit formula reduction — which some Progressives erroneously liken to "means-testing" — is actually just an extension of the already existing progressive benefit structure.
This criticism seems particularly odd coming from progressives who normally want the more well to do to bear the brunt of any Social Security fixes. Progressives can't clamor for higher payroll taxes or higher limits to the "tax max" while simultaneously criticizing benefit reductions that affect higher-than-average earners. In short, this is overall a pretty progressive package of changes to the program, which Progressives and Democrats should support.
For what it's worth, I agree. The co-chairs' Social Security proposal is not the one I'd make, but it's pretty solidly in the mainstream of reasonable takes on shoring up Social Security's finances. Basically, it's a collection of small revenue increases and small benefit cuts, with the cuts focused on high earners and everything phased in over several decades. The worst part of their plan is the increase in retirement age — I think there are much better ways of reducing benefits — but the increase they propose is pretty modest: full retirement goes from 67 to 68 by 2050. That's not Armageddon.
If it were up to me I'd do a bit more on the revenue side, possibly increasing the payroll tax from 12.4% to 13%, for example. But as a discussion draft, Simpson-Bowles is OK, and it's a good demonstration of my point that fixing Social Security is pretty easy if both sides are even minimally serious about finding a compromise.
Other aspects of the plan still strike me as unserious. The 21% cap is just a sop to conservative dogma, not something related to deficit reduction. Ditto for the tax plan. The discretionary cuts are mostly pie in the sky, and in any case don't really deserve much space in a document concerned with long-term deficit reduction. And the healthcare discussion is woefully underpowered.
But the Social Security proposal? It's not bad.