It used to be a truism that no elected office-holders would dare to tamper with Social Security if they wished to keep their jobs.
That must not be true any longer, judging from the surge in threats to the revered program coming from the GOP lately.
In its latest manifestation, four Republicans angling to become chair of the House Budget Committee in a Republican House talked openly about holding the federal debt ceiling hostage to an agreement on "entitlements" — that is, Social Security and Medicare — plainly aimed at cutting benefits.
In fact, the Republicans are proposing to deny benefits to millions of Americans, all in the name of "strengthening and shoring up" those programs, as House Republican Whip Steve Scalise, R-La., described the proposals for Fox News on Oct. 16. More on that in a moment.
In interviews with Bloomberg, the four laid out their vision. Rep. Buddy Carter, R-Ga., said the GOP's focus in budget cutting has "got to be on entitlements."
Rep. Jodey Arrington, R-Texas, told Bloomberg that the party caucus would oppose options for shoring up Social Security's fiscal condition that included tax increases, but would look kindly on raising the eligibility age for that program and Medicare.
"Republicans have a list of eligibility reforms, and we don't like the tax increases," Arrington said.
Meanwhile, House Minority Leader Kevin McCarthy, R-Calif. — who's hoping to become speaker if the GOP wins control of the House — added his voice to the GOP chorus calling for using the debt ceiling as "leverage" to achieve their budget goals.
McCarthy was cagey about whether he would tie the debt ceiling to benefit cuts, telling Punchbowl News in an interview that he would not "predetermine" the options. But his fellow Republicans were not so evasive in their Bloomberg interviews.
"The debt limit is clearly one of those tools that Republicans ... will use to make sure that we do everything we can to make this economy strong," Rep. Jason Smith, R-Mo., the ranking member of the Budget Committee, said.
This isn't the first time that the GOP has tried to depict Social Security and Medicare as enemies of sound fiscal policy. Senate Minority Leader Mitch McConnell spelled it out in 2018. Sen. Joni Ernest, R-Iowa, talked openly about making cuts "behind closed doors." Sen. Marco Rubio, R-Fla., cooked up a plan for family leave funded by raiding future Social Security benefits.
Let's examine this talk and gauge its potential impact on Americans of all ages.
First, the debt ceiling.
As I've reported almost more times than I can remember, the debt ceiling is the single most infantile feature of American policy-making. It's also one of the most commonly misunderstood, which is exactly what gives the GOP the opportunity to wield it as a weapon. Republicans assert that the ceiling, which caps the Treasury's issuance of federal debt but can be raised by congressional vote, places a hard limit on federal spending and that raising it encourages more waste.
It does nothing of the kind. The debt ceiling was not originally meant as a limit on the Treasury's authority to issue debt, but rather as a way to give it more latitude to borrow. It was enacted in 1917, when Congress grew weary of having to vote on every proposed bond issuance, which it considered a pain in the neck. So it chose instead to give the Treasury blanket authority to float bonds, subject to a stopgap limitation.
The ceiling was never designed to keep Congress from enacting any spending bills or deficit-building tax breaks it wished. Raising the debt ceiling does nothing to increase spending; it merely authorizes borrowing for debts already incurred by Congress.
The need for a periodic vote to raise the ceiling merely gives Republicans a chance to posture about Democratic spending proposals. Since a vote on the debt ceiling will be necessary next year, that's what's happening now.
In 2011, I observed that the debt ceiling had been raised by congressional votes 91 times since 1960, generally without discussion. That included seven times under George W. Bush and three times (by then) under Barack Obama. That year, Republicans took majority control of the House of Representatives, and the debt ceiling morphed into the raw material of a political stunt.
The economic consequences of breaching the debt ceiling are dire. Payments on existing debt would be halted, as would Social Security checks, Medicare reimbursements to doctors and hospitals and paychecks to military families.
Ruining the U.S. government's unblemished history of always paying its debts would instantly raise its borrowing costs, placing a heavier burden on its budget and slashing the value of government securities held by individuals and pension funds, not to mention investors in other countries.
Every so often in the debt ceiling battles, Republicans get at least a bit of what they ask for. It's never good for the public. The 2011 version resulted in the sequester, an automated austerity regime aimed at suppressing non-defense spending.
The sequester was a gun Congress held to its own head, designed to be so lethal that our lawmakers wouldn't dare to pull the trigger in the form of draconian budget cuts. No one told the trigger finger. So the budget cuts went into effect.
The sequester pared gross domestic product by 1.2% and cost as many as 1.6 million jobs over its first two years.
Tens of thousands of 3- and 4-year-olds were barred from Head Start, perpetuating the cycle of poverty and poor educational attainment faced by their families. Unemployment benefits were cut by an average of 15% nationwide. (Congressional pay and benefits, naturally, were exempt from those cutbacks.)
Now let's examine the GOP proposals for Social Security and Medicare. According to the party's model federal budget, they include raising the eligibility age for Social Security and Medicare to as high as 70.
This idea is both ignorant and insane. The current full retirement age for Social Security is 67, for those born in 1955 or later, but workers can start collecting as early as age 62. (They get reduced monthly benefits for life if they do so, but higher benefits for life if they wait as long as age 70.)
Most workers don't wait until their full retirement age to start collecting benefits, almost always because they can't — they need the money and can't continue working. According to program statistics, about 37% start taking benefits at 62, and more than half do so before their full retirement age. Only about 6.7% can afford to wait until age 70. In other words, force people to wait, and more than 98% of future beneficiaries would be left behind.
The GOP defends this proposal by pointing to the increase in life expectancy for those reaching 65 — "the average life expectancy for men reaching 65 increased from 77.7 to over age 82.9," they write in their budget — implying that the average American spends a longer period collecting retirement than in the past. The average, however, masks a lot of diversity.
The life expectancy tables issued by the Centers for Disease Control and Prevention show that the figures cited by the GOP apply chiefly to white males. For Black males, the average life expectancy is only 81 — two years short of the white male cohort. Would the Republicans adjust for this discrepancy? They don't say, so the answer is probably no.
The Republican plan would also allow workers to divert some of their Social Security contributions into private retirement plans. The drawbacks to this idea are no secret — they helped torpedo a similar proposal by George W. Bush in 2005, thank goodness.
The GOP says its goal is to "provide workers the freedom to choose how to save their own money for retirement." Here's a translation of this coded phrase: It's a way to place your retirement resources into the hands of Wall Street. The GOP asserts that "requiring all young workers to participate in a one-size-fits-all government-run retirement program does not make economic sense."
In fact, it makes perfect economic sense. The great virtue of Social Security is that it's there for everybody, regardless of the prevailing investment market winds throughout anyone's lifetime. It's a lifetime, inflation-protect bulwark against bad or mistaken investment decisions.
No private plan can do that; no private plan has the disability insurance component of Social Security, which pays a full benefit to workers forced out of the workforce by injury and their families.
If you want a counter-argument to the Republicans' praise for 401(k) plans in their budget proposal, the stock market has one for you: It has lost about 23% of its value since the beginning of this year. If you were counting on your 401(k) to provide for you in a near-term retirement, you may have to do some new math.
By the way, raising the eligibility age for Medicare won't save Americans a dime. It will just mean that people will have to stay on private plans for five years longer, risking medical bankruptcy if they experience a major medical event, as is hardly uncommon in the 65-70 age range. Many will end up on Social Security disability in those years, which just means transferring costs borne by Medicare over to Social Security. How is that a gain?
To give them meager credit, the Republicans don't make much of a secret of their intention to gut these programs, though they couch their proposals in misleadingly positive language such as "strengthening and shoring up." You'll pay the price if any of these ideas comes to fruition. Don't say you weren't warned.
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