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Why are Republicans telling voters they want to cut Social Security by a third? MarketWatch
If the Republicans take over the House, Rep. Kevin McCarthy has not ruled out cutting Social Security. So, it’s worth taking a look at what a Republican plan might look like.
The proposal in the RSC document — Make Social Security Solvent Again — is based on a bill put forward in 2016 by Sam Johnson (R-Texas). That legislation would eliminate Social Security’s 75-year deficit solely by cutting benefits. According to scoring by the Social Security actuaries at the time, the Johnson plan would reduce Social Security costs at the end of the 75-year projection period by 31%.
This 31% cut is the result of three major changes:
* Raising the Full Retirement Age—currently 67—to 69
* Dramatically reducing benefits for above-average earners
* Eliminating the cost-of-living adjustment (COLA) for individuals with income in excess of $85,000 ($170,000 for married couples) and using a chain-weighted inflation index for those below
Although the RSC takes a slightly different approach to raising the Full Retirement Age — linking it to increases in life expectancy — one would expect the overall impact on future workers to be roughly the same.
At first glance, one might conclude that’s a fine outcome: cut the benefits of the well paid and preserve the benefits of the low paid. But look closely at the earnings associated with the categories of well paid. The medium worker, who sees benefits drop to 77% of current law, had career average earnings of $58,700 in 2021 and the “high” earner, who sees benefits drop to 40% of current law, earned $94,000.
These are not rich people.
The proposal in the RSC document — Make Social Security Solvent Again — is based on a bill put forward in 2016 by Sam Johnson (R-Texas). That legislation would eliminate Social Security’s 75-year deficit solely by cutting benefits. According to scoring by the Social Security actuaries at the time, the Johnson plan would reduce Social Security costs at the end of the 75-year projection period by 31%.
This 31% cut is the result of three major changes:
* Raising the Full Retirement Age—currently 67—to 69
* Dramatically reducing benefits for above-average earners
* Eliminating the cost-of-living adjustment (COLA) for individuals with income in excess of $85,000 ($170,000 for married couples) and using a chain-weighted inflation index for those below
Although the RSC takes a slightly different approach to raising the Full Retirement Age — linking it to increases in life expectancy — one would expect the overall impact on future workers to be roughly the same.
At first glance, one might conclude that’s a fine outcome: cut the benefits of the well paid and preserve the benefits of the low paid. But look closely at the earnings associated with the categories of well paid. The medium worker, who sees benefits drop to 77% of current law, had career average earnings of $58,700 in 2021 and the “high” earner, who sees benefits drop to 40% of current law, earned $94,000.
These are not rich people.
19 replies
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