During the 2016 Presidential campaign surprisingly little was said about Social Security even though the program is critically important to American seniors and disabled workers. USA Today reports that “based on the most recent data released from the Social Security Administration, more than 60% of seniors currently receiving Social Security rely on their benefit for at least half of their monthly income”. Those with disabilities rely on Social Security benefits to even more to pay for housing, food and live-saving medications. Trump’s only position on Social Security while on the campaign trail was that he would leave Social Security alone; that he would ensure senior and disabled Americans will get the benefits they have earned despite projected future shortfalls in the Social Security Trust Fund.
“Rather than tackling changes to Social Security itself,” USA Today says, “Trump's pledge revolves around making changes to the individual and corporate tax structure in order to boost the growth of the U.S. economy. Having forecast GDP growth as high as 4% during his campaign, Trump believes faster growth should lead to rising wages and thus an increase in payroll tax collection.
If Trump's tax and economic plans don't deliver the growth he has suggested, then Social Security's current trajectory of a budgetary shortfall won't change one iota.”
However, at least one influential Republican in the House of Representatives has a different view and is proposing to carve up Social Security. In December, Sam Johnson (R-Texas), put on the table his Social Security Reform Act of 2016, which includes a number of sweeping changes to the program including raising the retirement age and readjusting how Social Security checks are adjusted for inflation every year. Michael Hiltzik and columnist for the Los Angeles Times made this observation about Johnson’s plan: “Followers of GOP habits won’t be surprised to learn that it achieves this goal [of “saving” Social Security] entirely through benefit cuts, without a dime of new revenues such as higher payroll taxes on the wealthy. In fact, Johnson’s plan reduces the resources coming into the program by eliminating a key tax --another way that he absolves richer Americans of paying their fair share, while increasing the burdens of retirement for almost everyone else.”
Johnson, chairman of the Ways and Means Social Security subcommittee, proposes to raise the full retirement age—currently 66 and set to rise to 67 by 2022—to 69 by 2030. On the face of it, this seems to be a benign proposal because Americans are living longer. But what raising the full retirement age does in reality is penalize lower income individuals. Wealthier people are in a better position to put off collecting Social Security benefits until they have reached the full retirement age, but those who are poorer and who are more likely to have to start drawing benefits earlier—as early as age 62—will now see their monthly check reduced. As Newsweek noted, “Some retirees simply don't have a choice when it comes to taking benefits early. Be it poor health or their inability to find a job, filing for benefits at age 62 with a [full retirement age] of 69 could mean accepting a hefty lifelong reduction in benefits.”
“Johnson would also cut benefits for the spouses and children of retired and disabled workers by pegging them to average wages, rather than to the wages actually earned by the worker,” Hitzlik reports. “This pares the benefits for families earning more than the average.”
Understandably Social Security advocates are alarmed. As Nancy Altman, co-founder of Social Security Works, put it, “in the last election no one voted for massive cuts to Social Security, nor to end the program as we know it. Trump needs to immediately reassure the American people that he will keep his campaign promise and veto this awful bill,” Altman said. “He should tweet that immediately.”