Here’s How The Gop Could Remove $174 A Month From Retirees’ Paychecks Without A Direct Cut
On Capitol Hill, both political parties have acknowledged that Social Security needs some TLC. Unfortunately, neither party is in the same ballpark as to how best to fix what’s estimated to be a $13.9 trillion shortfall over the next 75 years.
What isn’t in doubt, though, is that if Republicans were able to implement their two most prominent solutions, every beneficiary would see some form of reduction in their payout.
The GOP has long favored cost-cutting as the best means of reducing Social Security’s shortfall. The most commonly touted method of tackling this would be by gradually raising the full retirement age — i.e., the age at which you become eligible for 100% of your monthly payout. Currently set to peak at age 67 in 2022 for those born in 1960 or later, Republicans would like to see this figure gradually increased to age 70. Such a move would require future generations of retirees to either wait longer to collect their full payout or to accept a steeper up-front reduction by claiming early. No matter their choice, lifetime benefits, and therefore program outlays, would be reduced.
But the thing about raising the full retirement age is that it takes a long time to work. Meanwhile, the other Republican proposal — changing Social Security’s inflationary tether from the Consumer Price Index for Urban Wage Earners and Clerical Workers to the Chained CPI — could yield modestly faster savings.
Republicans Are Pushing Myths About Social Security
Republican politicians want to cut Social Security. They never say so out loud, but their 2016 platform reveals the truth. In the section labeled, Saving Social Security, it proclaims, As Republicans, we oppose tax increases Since Social Security cannot deficit spend and is projecting a shortfall in 2035 if Congress doesnt act, that only leaves benefit cuts.
Representative John Larson , the Chairman of the House of Representatives Subcommittee on Social Security, is trying to force his Republican colleagues into the open. Larson is the sponsor of the Social Security 2100 Act, which increases Social Securitys modest benefits. Additionally, it raises enough revenue to ensure that all benefits can be paid in full and on time through the year 2100 and beyond. Ninety percent of the Democrats in the House of Representatives are co-sponsors, but not a single Republican. Given their refusal to back his bill, Rep. Larson has urged Republicans to offer an alternative proposal to no avail.
Non-action is not an option, unless your goal is to cut Social Security. The most recent Social Security Trustees’ Report projects that with no action, benefits will be automatically reduced by 20 percent in 2035. As Chairman Larson has plainly stated, The hard truth of the matter is that Republicans want to cut Social Security, and doing nothing achieves their goal.
Vote Tallies For Passage Of Medicare In 1965
Actions in Congress- H.R. 6675, The Social Security Admendments of 1965, began life in the House Ways & Means Committee where it passed the Committee on March 23, 1965 and a Final Report was sent to the House on March 29, 1965. The House took up consideration of the bill on April 7th, and passed the bill the next day by a vote of 313-115 . The Senate Finance Committee reported the bill out on June 30th and debate began on the Senate floor that same day, concluding with passage on July 9, 1965 by a vote of 68-21 . The Conference Committee to reconcile the differing bills of the two houses completed its work on July 26th. The reconciled version of H.R. 6675 then went to final passage in the House on July 27th and final passage in the Senate the following day.
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They Haven’t Taken A Dime From The Social Security Program That Isn’t Accounted For
Another misconception is that the Republican Party stole money from the Social Security Trust and used it to fund wars. More specifically, Ronald Reagan, George H.W. Bush, and George W. Bush have come under intense scrutiny for borrowing from Social Security and “not putting the money back.”
However, the truth of the matter is that Congress has been able to “borrow” Social Security’s excess cash for five decades, and it’s happened under every single president over that stretch. In fact, the Social Security Administration is required by law to purchase special-issue bonds and certificates of indebtedness with this excess cash. Please note the emphasis on “required by law” that I’ve added above. The federal government isn’t simply going to sit on this excess cash it borrows from Social Security. It’s spending this cash on various line items, which may be wars and the defense budget, as well as education, healthcare, and pretty much any other expenditure you can think of.
This setup is actually a win-win for both parties. The federal government has a relatively liquid source of borrowing with the Social Security Trust, and the Trust is able to generate significant annual income from the interest it earns on its loans. Last year, $85.1 billion of the $996.6 billion that was generated by the program came from interest income.
Social Security Fixes That Democrats And Republicans Agree On
This article originally appeared on The Motley Fool.
Social Security income is vital to the well-being of our nations retireesdata from the Social Security Administration shows that 61 percent of retirees currently receiving Social Security rely on their benefits for at least half of their monthly income. But seniors benefits could be in trouble less than a generation from now.
According to the Social Security Trustees Report from 2016, the program is on track to deplete its more than $2.8 trillion in spare cash by the year 2034. If this cash is exhausted and Congress passes no new laws to boost revenue collection, benefit cuts of up to 21 percent could be needed across the board to sustain benefit payouts through 2090. This isnt a comforting outlook for those seniors counting on Social Security income to make ends meet.
The unanswered question at this time is how best to fix Social Security. Lawmakers have no less than 15 solutions on the table, but political gridlock in Congress has halted any progress. However, the American public has a pretty clear picture of what itd like to see happen.
Based on responses from nearly 8,700 registered voters across eight states, the Voice of the People Citizens Cabinet Survey conducted by the Program for Public Consultation, School of Public Policy, University of Maryland, found that Americans from both the Democratic and Republican parties agree on a four-step solution to fix Social Security.
Two additional observations
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Why Do Republicans Hate Social Security
OpedNews.comnoSign on as a citizen co-sponsor of theKeeping Our Social Security Promises Act.S. Paul note: ;17.9% of U.S. debt is owned by Social Security Trust;along with 6% to public pensions. By eliminating both, the debt is forgiven. ;The idea of creating ;private accounts as the author so states, equates to billions upon billions of dollars set up as working capitol and investment funds for corporations while those managing the accounts make hundreds of millions on interest alone. ;There is also no guarantee on the return or even if the program will pay out when needed unless backed by the Government. ;Oh wait; they want to eliminate that, too. ;The republican plan for America’s future entails one basic;tenet; profit for the few while We the People still go without.
Let Employers To Band Together To Offer 401s
- To bring our retirement policies into the 21st century and empower working families, Congress should:
- Ensure plans are well-funded and employers remain in the system.Congress should make sure benefits are secure for workers and retirees and that employers are not discouraged from voluntarily offering these plans.
- Make it easier for employers to band together to offer 401s. Under current law, certain businessescan join together to offer a retirement plan to their employees, but only under strict circumstances. Congress should eliminate these bureaucratic restrictions.
- Reduce costly red-tape, needless federal regulations, and mandates.
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Don’t Count On A Switch To The Chained Cpi Anytime Soon
Now, before you start worrying about a reduction in your current or future Social Security benefit check, let me caution that a switch to the Chained CPI from the CPI-W appears highly unlikely anytime soon.
For one, President Trump has been pretty adamant about not making direct changes to the Social Security program. Trump has argued that indirect solutions that boost economic growth, thereby leading to an increase in payroll tax collection, should be more than enough to improve the health of the program.
More important, there would need to be bipartisan cooperation in Washington in order to pass such a measure; and none exists right now. Any amendment to the Social Security program requires 60 votes in the Senate, and it’s been four decades since either party had a supermajority in the upper House of Congress. There’s virtually no way Democrats would support switching to the Chained CPI when they have their own inflationary tether change proposal on the table.
Since 2000, the purchasing power of Social Security income has fallen by 33%, and it doesn’t look as if this trend will slow anytime soon.
Republicans Very Much Dislike The Current Cola Measurement
You should understand that the Republican Party doesn’t like the current inflationary tether, the Consumer Price Index for Urban Wage Earners and Clerical Workers .
The biggest issue Republicans have with the CPI-W is that it doesn’t do a very good job of measuring the inflation that seniors are facing, thereby resulting in an inaccurate cost-of-living adjustment each year. That’s because, as the name implies, the CPI-W tracks the spending habits of urban and clerical workers, who in nearly all instances aren’t receiving a Social Security check. Essentially, seniors’ annual raise is tied to the spending habits of non-seniors, and that doesn’t sit well with anyone in Congress.
In particular, Republicans would like to replace the CPI-W with the Chained CPI. The Chained CPI takes into account the idea of substitution bias, which involves trading down from a pricier good or service to something less expensive if prices go up. For example, if the price of ground beef rises 40%, you might buy pork or chicken instead. The CPI-W does not take into account substitution bias.
Although substitution bias does take into account a real-life purchasing strategy of consumers, the consensus view among pundits is that it would result in lower annual COLAs more years than not, relative to the CPI-W.
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Yes Republicans Want Big Time Cuts In Social Security
Over the last couple weeks, Dylan Scott has been out front on the House GOPs effort manufacture a Social Security funding crisis that would hit over the next two years. Theres more than one Social Security Trust Fund. Theres one that covers most retirees. Theres another that covers the disability part of the program. And over the years, Congress with little controversy has shifted funds back and forth between the two to maintain actuarial balance. So to date, the whole push has been rather technical and framed around bean counting. But earlier this month, most notably from Rand Paul, we heard the other prong in the attack come into play.
Speaking to Republican presidential primary voters in New Hampshire, Paul said that most Social Security disability recipients are in fact malingerers and scofflaws who have no business receiving benefits in the first place.
The thing is that all of these programs, theres always somebody whos deserving, everybody in this room knows somebody whos gaming the system. I tell people that if you look like me and you hop out of your truck, you shouldnt be getting a disability check. Over half the people on disability are either anxious or their back hurts. Join the club. Who doesnt get up a little anxious for work every day and their back hurts? Everyone over 40 has a back pain.
What’s The Real Reason Republicans Want To Do Away With Social Security
At first glance, Social Security seems innocuous enough. What’s not to like? It’s as American as, well, the Great American Century. Also, until recent years, it’s managed to straddle the political divide from Democratic President Franklin Roosevelt, under whose administration it was instituted, to Republican President Dwight Eisenhower.
But today many Americans view it, ironically, as un-American and would like to see Social Security reduced with an eye to abolishing it. Besides opposing large government in principle, they believe that the money withheld from their paychecks for Social Security is just another form of taxation, to which, in itself, they’re constitutionally incapable of reconciling themselves. Furthermore, it’s money that they feel they could invest more profitably in stocks and bonds, mutual funds, IRAs, 401s, or . . . lifetime savings accounts.
Beyond opposing big government and controlling how one invests one’s money, there’s a more powerful agenda behind lifetime savings accounts. See, they’re likely to be administered — at some level, anyway — by Wall Street, which hopes to reap a small fortune in fees for managing them.
For starters, however involuntarily, many who depend on Social Security to withhold money from their paychecks are, often — usually, in fact, these days — poor savers. Books such as The Great 401 Hoax by William Wolman and Anne Colamosca demonstrate what a poor job 401s have done providing retirement security.
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The Republican Record On Social Security
1935: Almost all Republicans in Congress oppose the creation of Social Security.
1939: 75 percent of Republicans in Senate try to kill legislation providing Social Security benefits to dependents and survivors as well as retired workers.
1950: 79 percent of House and 89 percent of Senate Republicans vote against disability insurance to defeat it.
1956: 86 percent of Republicans in Senate oppose disability insurance; program approved nonetheless.
1964: Republican presidential candidate Barry Goldwater and future president Ronald Reagan both suggest that Social Security be made voluntary.
1965: 93 percent of Republicans in House and 62 percent in Senate vote to kill Medicare.
1977: 58 percent of Senate votes against amendment to provide semiannual increases.
1977: 88 percent of Republicans in House and 63 percent in Senate vote against an increase in Social Security payroll tax needed to keep the system solvent.
1981: President Reagan proposes $35 billion in Social Security cuts over the next 5 years. The cuts would have included the elimination of student benefits, lump-sum death benefits, and a retroactive elimination of the $122 minimum benefit for three million recipients.
1981: Reagan administration begins a wholesale review of the Social Security Disability rolls, resulting in over 560,000 eligibility investigations in 1982 360,000 more than the year before. Ultimately, at least 106,000 families were removed from the rolls.
What Changes Could Come In 2021
Experts expect one Social Security issue to be on lawmakers’ agendas this year.
The Covid-19 pandemic has created a so-called notch that would reduce benefits for those turning 62 and claim retirement benefits in 2022, as well as those who file for disability or survivor benefits that year.
Congress is expected to act to prevent those reductions before they take effect.
Because those benefit reductions were directly caused by Covid-19, it could be addressed in the next relief package, said Dan Adcock, director of government relations and policy the National Committee to Preserve Social Security and Medicare.
“I think that’s the most likely early action on Social Security,” Adcock said.
If reduced benefits for that cohort is not included in that upcoming legislation, lawmakers could consider it later in the year, which could prompt bigger conversations about Social Security reform, said Nancy Altman, president of Social Security Works, which advocates for Social Security expansion.
“If it’s not done in the Covid package, then it would make sense to do it in a comprehensive Social Security package, which gives some impetus to acting on it in this coming year,” Altman said.
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Republican Views On Social Security
May 7, 2014 By RepublicanViews.org
The Republican Party gets a lot of criticism over the issue of Social Security. Many will state that Republicans are against Social Security as a whole. This is untrue. Republicans are against Social Security in the form that it currently exists. While Social Security does represent ideas, such as government spending and redistribution of wealth, which the Party is generally against, very few Republicans will argue that Social Security should be done away with. Instead, they believe in large reforms to the system. They believe that workers need to be given greater control over their own retirement investments. In light of lengthening lifespans, Republicans believe that Americans need greater freedom to arrange personal retirement investments as a supplement to Social Security. They believe young Americans especially should be given this opportunity, as many members of the younger generations do not believe in the effectiveness of the Social Security system, and their money should not have to go into a system they do not support and/or believe in when they have many other options available to them.
Stopping Payments To Dead People
This is a joint document provided by the Committees on Ways and Means and Oversight and Government Reform.;Topline: In order to stop payments to dead people, this legislation will remove hurdles to reducing improper payments.Background: The Social Security Administration collects death information in order to accurately administer its …
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