Late last Thursday, Rep. Sam Johnson (R-Texas), the chair for the House Ways and Means Social Security subcommittee, introduced a bill that would raise the retirement age and reduce benefits as much as a third. The bill, called the the “Social Security Reform Act of 2016,” is intended to extend the life of the retirement program another 75 years, but the plan favors wealthier retirees and adds no new funding for the program.
According to ABC 10 News, Rep. Johnson introduced the bill labeled as a reform for the program instituted by beloved President Franklin D. Roosevelt. Johnson introduced the legislation just before the end of the congressional session, which is breaking for the holidays. Johnson claims that the bill would “permanently save” social security, but rather than helping to provide better benefits to American retirees, the changes would delay and curtail a dignified retirement.
As reported by CBS News, The Social Security Office of the Actuary estimates that the act would keep the trust fund solvent for another 75 years, but would include a $2 trillion decrease in revenue into the program and a $13.9 trillion decrease in benefits.
Currently, the Social Security system will require a 21 percent reduction in benefits in 2034 if not reformed. But rather than increasing the cap on Social Security pay-ins by workers, as suggested by Vermont Sen. Bernie Sanders, the Republicans seem determined to dissolve the national pension and force workers to rely more heavily on risky investment plans to secure a dignified retirement.
Steve Vernon of CBS Moneywatch wrote:
‘The GOP proposals don’t include any revenue increases to shore up the system. In fact, the proposal overshoots the current funding deficit with net benefit cutbacks of 122 percent of the current deficit in order to fund a tax decrease with a present value of 17.5 percent of the deficit.’
One of the more drastic measures in the Republican bill is raising the retirement age to 69 for those born in 1968 or later. According to Forbes, the changes will also alter the benefit formula:
‘In such a way that benefits are progressively and gradually reduced for roughly the top half of retirees.’
The plan changes also include deleting any cost of living (COLA) increases for retirees with higher incomes: singles over $85,000 and couples making over $170,000. It would also reduce the benefits for spouses of higher-income retirees.
Although this sounds much fairer on the surface, the Republican bill places funding for social security on the middle class and working poor. According to the Los Angeles Times, Johnson’s plan reduces funding coming into the social security program through the elimination of taxes on benefits for high-income retirees that would normally be paid back into the social security system to support it.
Johnson is also proposing cutting the benefits for the spouses and children of retired and disabled workers. Rather than providing dependent benefits based on the actual wages earned by the disabled worker, dependent benefits would be based on “average wages.”
Johnson’s bill contrasts sharply with a plan proposed by the Bipartisan Policy Center (BPC) in June that would add revenue to the program. The BPC program would raise benefits for low-income workers, and widows/widowers, while reducing benefits for wealthier retirees. The BPC program would also increase benefits for older Americans who choose to continue working past retirement age. With increasingly more sedentary occupations and longer, healthier lifespans, those who choose to work past the 35 years estimated would be rewarded with higher benefits after working 40 years. The plan also increases funding into the struggling retirement program by raising social security tax from the 2016 wage cap of $118,500 to $195,000 by 2020.
Nancy Pelosi, house democratic leader, released a statement regarding Johnson’s plan to severely chop benefits for retirees.
‘Apparently, nothing upsets house republicans like the idea of hard-working people getting to enjoy a secure and dignified retirement. While Speaker Ryan sharpens his knives for Medicare, chairman Johnson’s bill is an alarming sign that Republicans are greedily eyeing devastating cuts to Americans’ Social Security benefits as well.
‘The top Republican on the Social Security subcommittee is rolling out legislation that cuts benefits by more than a third, raises the retirement age from 67 to 69, cuts seniors’ cost of living adjustments, and targets benefits for the families of disabled and retired workers.’
Reducing benefits, raising the age of retirement, and cutting funding to social security is only the first step in gutting our national pension fund. Republicans have had it in for Social Security since it was introduced in 1935, calling it “socialism” and an “entitlement,” seemingly unaware that American workers pay a percentage of their gross income into the program every working day of their lives.
Readers who wish do to so can find and contact their House representative and express their opinion regarding the new bill at the House.gov website.
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