Possible cutbacks to Social Security raise ire

The idea of Social Security cuts produced anger and questions from locals Thursday, the day after Federal Reserve chairman Alan Greenspan announced that the government cannot afford to pay the Social Security benefits promised to baby boomers.

Greenspan said unless Congress acts, soaring budget deficits from out-of-control entitlement programs could lead to a "very debilitating" rise in interest rates in coming years.

The mere mention of cutting Social Security at Jackson's Senior Center on Thursday drew angry reactions.

"Those big shots up there don't have any idea how we live," said 82-year-old Ruby Moll. "They need to cut out something else in Washington."

Moll said some seniors have saved money over the years and were living, in part, off the interest. But as a result of the recession, interest rates dropped "so low, you can't live on interest now," Moll said. "Times have changed."

However, if Greenspan's prediction comes true, some of those seniors who live off their interest would actually benefit from a spiraling Social Security situation.

Unfortunately, Moll said, there are many retirees who live on Social Security alone.

One means of cutting back Social Security, Greenspan said, is a switch to an alternative measure of inflation for annual cost-of-living adjustments that gives lower inflation readings and thus would mean smaller payment increases.

That's hogwash to 63-year-old Deanna Dunn. Dunn said her Social Security check increased by $6 per month as a result of the most recent cost-of-living adjustment. And then the government took away $9 from her food stamps because of the increase in income.

Tom Strickland, a 60-year-old engineer in Jackson who is nearing retirement, said he wanted to hear more details about Greenspan's plans before he issued an opinion.

"Personally, I hate to see a reduction in what's been promised," he said. "But I'm not against the government trying to justify expenses. We'll have to wait and see."

Greenspan suggested that Congress take action on cuts sooner rather than later so baby boomers nearing retirement can make some adjustments to their savings plans.

Financial consultant Fritz Sander of Jackson said it would be a good idea for baby boomers to start saving more now, anyway.

He said talk of Social Security changes wouldn't be felt as sharply if people would start saving larger amounts sooner. Sander said knows that there are some people out there who simply cannot afford to save, but, in general, it's a choice.

"Saving is no longer the highly regarded value it was 50 years ago," Sander said. "A lot of people have a consume-and-spend mindset that gives a false feeling that they can't save money."

The Associated Press contributed to this report.

bmiller@semissourian.com

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