5 Ways Republicans Plan to Cut Social Security
By: Katherine Gallagher Robbins and Ryan Erickson
This past week, Rep. Sam Johnson (R-TX), the GOP’s thought leader on Social Security, quietly introduced a new proposal to “reform” the program. While the GOP will claim that Johnson’s bill is a plan to modernize Social Security, let there be no doubt: Johnson’s bill would lower benefits for virtually all beneficiaries, forcing even more hardship on seniors and working families struggling to make ends meet. What’s worse, at the same time it cuts benefits for working and middle class Americans, it gives rich Americans’ incomes a boost by lowering their taxes.
On the campaign trail, President-elect Trump stressed that he was a different kind of Republican, and promised to protect Social Security. That’s no surprise, because Social Security has long been considered close to sacred in American politics. In fact, most Americans would rather see the program expanded, rather than cut, and they’d even be willing to pay more to do it.
Johnson’s proposal is a direct contradiction of Trump’s campaign promises. But as Trump stocks his cabinet and his White House with wealthy, trickle-down conservatives who have ambitious plans for dismantling the social safety net, it wouldn’t be a surprise to see President Trump embrace the Johnson plan, too.
Here are five ways the GOP plan for Social Security will hurt seniors and other beneficiaries:
1. Raises the retirement age another two years to 69.
The retirement age for Social Security is already set to increase to 67 — and Johnson wants to increase it another two years to 69. Raising the retirement age cuts benefits for all retirees by roughly 7 percent a year — which makes it a terrible idea for everyone, but especially for lower-income workers who are more likely to retire and claim benefits early, often due to the physical demands of their jobs. In addition, Americans’ life expectancy has dropped for the first time in more than 20 years, and life expectancies are already lower for lower-income Americans. Raising the retirement age clearly disadvantages lower-income workers the most.
2. Reduces or eliminates benefit increases that ensure Social Security keeps pace with rising costs.
For working class and lower-income Americans, the proposal recommends switching to a new measure of inflation, the Chained Consumer Price Index (chained CPI), which would mean benefits lose their value over time. Not only is the chained CPI a less accurate way to ensure that Social Security benefits are keeping up with rising costs, it cuts benefits more deeply the longer one receives benefits. Johnson’s proposal also makes another change that hits middle class Americans especially hard: for them the proposal eliminates Social Security’s cost of living adjustment altogether. This would mean that benefits would never increase. Benefits’ declining purchasing power would mean these seniors fall further and further behind. This change would particularly hurt long-term beneficiaries, including our nation’s oldest beneficiaries. These changes would begin in 2018, hurting today’s beneficiaries in just a few years.
3. Reduces benefits for spouses, students, and children.
Beginning in 2023, the proposal limits benefits for many spouses and children of retired or disabled workers. And starting in 2019, it would require young adults ages 15 to 19 who receive benefits because their parents retired, became disabled, or died to be in school full time. This provision is particularly harmful to young adults of color and LGBTQ young adults who are more likely to be pushed out of school.
4. Changes how benefits are calculated so they are reduced.
The proposal makes technical changes to how Social Security benefits are calculated, changes that will impact middle class workers who are retiring or become disabled in the next decade. These technical changes will reduce the program’s already modest but essential benefits for millions of Americans.
5. Cuts benefits to cut taxes for the wealthy.
The Johnson plan provides a clear proof point for the GOP’s real agenda with Johnson’s Social Security “reform.” Johnson’s proposal actually cuts Social Security past the point that is necessary to ensure the program’s solvency. Why? So they can provide a tax cut for the wealthy: the Johnson plan reduces taxes on benefits for higher-income beneficiaries. These benefits for wealthy Americans come on top of the fact that wealthier earners already don’t pay Social Security taxes on all of their income while they are working. That’s because the payroll tax is capped at $118,500 — meaning that any dollar that a worker earns over that amount isn’t subject to the Social Security payroll tax. Every dollar of capital income they earn isn’t subject to the payroll tax at all. If Social Security is in such bad shape that it requires massive benefit cuts to survive, why cut funding for it, too? The answer is clear: because Johnson’s plan isn’t a plan to save Social Security. It’s a plan to give the wealthy a tax cut that struggling beneficiaries will pay for.
Social Security’s modest benefits are vital to the economic security and well-being of millions of older Americans, those with disabilities, and children and in the face of America’s retirement crisis these proposed cuts are shameful. They will further burden people already facing significant economic hardship, and they demonstrate once again who the GOP is really fighting for.