Why in the world would Republicans plan to dramatically cut Social Security?
Even Donald Trump said he would not play with the benefits of the program. Nevertheless, the Republican Study Committee blueprint to save america, released in June, has an entire section devoted to Social Security. I had never heard of the Republican Study Committee (RSC), but apparently the organization has served as the conservative caucus of House Republicans since its inception in 1973, and it currently has 212 Republican House members. Includes 158.
Yes, Some Republican Senators Are Actually Talking Openly About Cutting Social Security
If Republicans take over the House, Rep. Kevin McCarthy hasn’t ruled out cuts to Social Security. So, it’s worth seeing what the Republican plan might look like.
Offer in RSC document – Make Social Security Solvent Again Sam Johnson (R-Texas) put forward a bill in 2016. That law would eliminate Social Security’s 75-year deficit by cutting benefits entirely. According to Scoring by Social Security Actuaries At that point, the Johnson plan would reduce Social Security costs by 31% at the end of the 75-year projection period.
This 31% cut is the result of three major changes:
Although the RSC takes a slightly different approach to raising the full retirement age — linking it to an increase in life expectancy — the overall impact on future workers is expected to be roughly the same.
Social Security COLA 2023 Benefits Growing 8.7%—What It Means for Recipients
The best way to assess the impact of these three changes is to examine the ratio of the current benefits offered at different points in the income scale. As the impact of eliminating COLAs increases over the retirement period, it is helpful to look at individuals over the age of 85. As Figure 2 below indicates, low earners are basically considered harmless, while middle-earner benefits are reduced to 77% of those provided. Under the current law, the top earners are 40% and the maximum earners are 34%.
At first glance, one might conclude that this is a good result: reap the benefits of the well-paid and preserve the benefits of the low-paying. But take a closer look at the earnings associated with the categories of well-paid. The middle worker, who sees benefits falling to 77% of current law, had a median career earnings of $58,700 in 2021, and the “high” earner, who sees benefits falling to 40% of current law, earned $94,000.
These are not rich people.
Social Security’s COLA is not a bonus
In addition, Social Security needs to be changed in the context of the entire retirement income system. Many families are likely to retire with little other than Social Security benefits, as less than half of private sector workers participate in an employer-sponsored retirement plan at any given time. And for those lucky enough to have a 401(k) plan, the balance is modest. 2019 consumer finance surveyThe latest comprehensive data available shows that working families with 401(k) retirements (ages 55-64) had an average 401(k)/IRA holdings of $144,000.
Policymakers need to address Social Security’s long-running deficit, but the fact that most House Republicans can support a plan that cuts Social Security by a third should terrify voters. . Why keep such a document?
Credit: www.marketwatch.com /