Former Gov. Tim Pawlenty (R-MN) is now pitching a potentially controversial idea to deal with entitlement spending: Means-testing of Social Security’s automatic cost-of-living increases.
As the Associated Press reports, Pawlenty told an audience in New Hampshire:
“Look, means testing isn’t ideal, but amongst the choices — the suboptimal choices we have in front of us — means testing just the cost-of-living increases — not the whole program — is a reasonable step,” Pawlenty said.
“What that means is, in the future, if you are wealthy, your increase to Social Security will be smaller than if you’re middle income or lower middle-income or poor.”
[TPM SLIDESHOW: Meet The 2012 GOPers: Ex-Gov. Tim Pawlenty (R-MN)]
Means-testing of Social Security is politically tough, because it would have the effect of — dare we say it — redistributing wealth. For illustrative purposes, if this idea were taken to its absolute extreme and the whole program was means-tested (which Pawlenty is expressly not proposing here), this would transform it from a universally-enjoyed entitlement to a social welfare program.
But even means-testing the cost-of-living adjustment would have a partial effect in this direction, by cutting an expected increase in benefits for wealthy people, and be vulnerable to political attacks from the right.
On the more conservative side, Pawlenty also says that raising the retirement age should be an option: “Your retirement age is going to be pegged to some reasonable correlation to life expectancy.”