As we’ve reported here, the Republicans want to privatize Medicare by issuing vouchers to seniors to buy health insurance on the open market. Emboldened by the election of Donald Trump, who campaigned on not touching Medicare or Social Security, and the nomination of Representative Tom Price (R-GA) to head HHC, the House put forth a plan to get in done in 2017. Of course this has run in to snag with major objections by the Democrats and a number of more reasonable Republicans in the Senate.
But, if that’s not enough, now they are looking to drastically cut Social Security:
A key House Republican on the issue of Social Security introduced a bill Thursday that would impose major cuts to the program. The bill, the Social Security Reform Act of 2016, was introduced by Rep. Sam Johnson (R-TX), the chair of the House Ways and Means subcommittee on Social Security.
It would, among other things, gradually raise the retirement age from 67 to 69 on Americans 49 or younger at the present. It would change the formula that determines the size of a retiree’s initial payments. And it would switch the program to a less generous formula for raising payments according to cost of living increases.
Big picture, the most concerning element for many experts is that its approach to make the program more solvent rest entirely on cuts, and does not raise revenues for the Social Security Trust Fund, as some bipartisan proposals have. Across the political spectrum, solutions for long term solvency range from cuts-only approaches like Johnson’s bill to plans that achieve 75-year solvency by raising the current income cap on social security taxes.
The current formula that determines yearly increase doesn’t take into account the costs of living for recipients as it is. Last year there was no cost of living increase and this year it was a paltry 0.03%, less than $5 for the top recipients. This would make it even worse. From Michael Linden, an analyst at the Hub Project and former adviser to the U.S. Senate Health Education Labor and Pensions Committee, tweeted this:
Many would suffer even deeper cuts. For example, benefits to workers making about 50k would shrink by between 11 and 35%! 35 percent!! 3/
— Michael Linden (@MichaelSLinden) December 9, 2016
At Rep. Johnson’s request. Social Security actuaries examined the plan (pdf). They found that cuts would range from 17 percent to 43 percent but over a longer time period and with the same conclusion: everyone in Social Security with the exception of the lowest-income participants.
At the New Yorker, Jonathan Chait questions the sanity of the Republicans in even bringing up this bill:
As a public-opinion matter, it would be insane for Republicans to attempt to pass this bill. It would be almost as insane as a matter of voting mechanics. It would require not only 218 House votes but also 60 Senators to cut Social Security. (The Senate can pass fiscal bills with just a majority, but those bills, called reconciliation bills, are not permitted to touch Social Security.) That means, as in 2005, Democratic support would be needed to pass the bill. And the over/under on the number of Senate Democrats likely to vote for a bill like this is 0.0000000.
Republicans could eliminate the Senate filibuster to pass this bill. But that would still leave the problem that Donald Trump repeatedly promised not to cut the program, ever.
The suspected primary reason would be to cut taxes for the wealthier Social Security recipients, as if they need it.
The best way to ensure Social Security remains solvent for future recipients is, of course, to raise the cap to say $250,000, or entirely remove it and lower the payroll deduction a couple of percents to offset the Republican complaints about, omg, raising taxes. Those ideas would be reasonable but the wholly owned by Pete Peterson and Koch brothers GOP aren’t reasonable. The best the Democrats can do are try to woo as many middle of the road Republicans who would lose their seats if they vote for this and filibuster in the Senate. But you can’t say you weren’t warned.