A House Budget Committee plan calling for cuts to Social Security benefits has rung alarm bells for executive board members of the American Society on Aging and senior care experts and industry leaders.
ASA members, a senior care advocacy organization, industry leaders and researchers say they are worried about budget cuts to Social Security achieved by rolling back income taxes among the highest income earners in the country by $2 trillion.
The compromise measure would translate into benefits being slashed by $13.9 trillion and an increase of the funded status of the Social Security trust by $11.9 trillion.
Authored by U.S. Rep. Sam Johnson (R-Texas), chair of the Ways and Means Social Security subcommittee, the proposal would make the fund solvent for 75 years.
However, ASA and senior care policymakers say the proposal would cut benefits by between 11 percent to 35 percent for workers making under $50,000 and restrict the cost-of-living allowance for those making $85,000 to prioritize the poorest.
Bob Blancato, MPA, president of Matz, Blancato & Associates, a D.C.-based government and nonprofit association advocacy consulting firm, and chair of the ASA board,
“Social Security was introduced at the end of the session of Congress,” Blancato said.
“[The] bill is to start conversation. [The] president says he is for protecting Social Security as it is. … If you don’t have to, there is no compunction to do so. [This calls for] a hard examination and look at [the] common ground [among the President and Republican and Democrat lawmakers].
“It [the bill] would have issues. Rich people and poor people don’t like [it]. Everyone takes a hit on this bill.”
In June 2018, lawmakers in the House Budget Committee voted for a budget that would cut $1.5 trillion from Medicaid, $537 billion from Medicare, and $2.6 trillion from nutritional assistance from Supplemental Nutritional Assistance Program (SNAP), Social Security, housing, disability and other programs. The measure goes before the full House soon.
Over a period of ten years, lawmakers mean to slash $763 billion from Medicaid, $236 billion from Medicare, $213 billion from SNAP, $4 billion in Social Security and $72 billion from the Social Security Disability Income (SSDI) and Supplemental Security Income (SSI) and $41.2 billion for the U.S. Department of Housing & Urban Development (HUD).
The budget measure occurred months after President Trump signed into law a $1.9 trillion tax plan, which is found to grant 83 percent of tax cuts to the richest 1 percent of the public.
House Republican plan to support the $1.9 trillion tax cut by reducing budget by $1.7 trillion, including Medicaid, Medicare, SNAP, Social Security, disability and HUD programs.
The bill would decrease benefits for seniors in the future, include a means test and increase the retirement age from 67 to 69 for individuals under age 50.
Lawmakers calculate that the Social Security fund will fall short of cash to pay benefits in full by 2034. This represents a 21 percent broad cut to match income and costs. Johnson proposed in his plan to cover the gap by cutting benefits and not increasing taxes on the rich.
These reductions would translate into employees who generate less than $50,000 in annual income finding their benefits in the future cut by between 11 percent and 35 percent. Only those at the bottom income brackets would be shielded from cuts.
The proposal would cease cost of living adjustments or COLA for beneficiaries making more than $85,000 a year. As a result, beneficiaries with the highest incomes would receive fewer benefits, which would convert Social Security into a means-tested program for those at the bottom income brackets.
The Trump administration has publicly pledged to protect Medicare, Medicaid and Social Security from privatization. The administration, however, once supported the appointment of Tom Price, ousted leader of the Department of Health and Human Services. Opposed to Medicare and Medicaid coverage, Price once crafted legislative proposals to cut Social Security.
Johnson’s reforms would not impact those who start to age before 2024, however, beneficiaries in the future would confront a 19 percent decrease in their benefits. The Social Security Administration projects that roughly half of the lowest-wage employees who would retire after 2030 would find cuts in their benefits. Some would receive a cut of 50 percent of scheduled benefits.
Putting an end to COLA would affect individuals in the bottom income brackets most of all. The number of retirees receiving 90 percent of their income from Social Security increases by two times between ages 65 and 80.
Many who are aged 50 will receive benefits at age 65 that will only amount to 74.8 percent of what today’s 65-year-old retirees benefit from in Social Security. If the same cohort lives to age 95, they will obtain 34.6 percent of what a beneficiary receives now.
The plan will decrease the benefits of caregivers who leave work to take care of elderly parents, children, spouses and others. Johnson’s proposal would also slash benefits from the spouses and the children of disabled employees.
U.S. Senate Minority Leader Chuck Schumer (D-N.Y.) and U.S. Sen. Bernie Sanders (D-Vt.) oppose Johnson’s proposals and have mounted Democratic opposition to his and other Republican measures.
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