New Congress Eyes Testing The “Third Rail”
By Jessie Gibbons, Senior Policy Analyst
With Republicans in control of the House, the Senate, and the White House for the first time in eight years, The Senior Citizens League (TSCL) believes that major changes to the Social Security program could be on the way. Last summer, when they adopted their party platform, Republicans promised to make changes to the program in order to extend the solvency of its trust funds past 2034. They wrote, “We reject the old maxim that Social Security is the ‘Third Rail’ of American politics, deadly for anyone who would change it.”
The platform that they adopted rules out revenue increases – such as an elimination of the payroll tax cap that would require millionaires and billionaires to contribute more to the program – a proposal supported by 75% of older voters and backed by TSCL. That leaves only benefit cuts on the table. The platform states: “As Republicans, we oppose tax increases and believe in the power of markets to create wealth and to help secure the future of our Social Security system.” When they adopted their platform, Republicans assured current beneficiaries and those nearing retirement that they wouldn’t see major changes to their benefits, but they vowed to consider all options when reforming the program.
The following three proposals have gained the support of Republican leaders in recent years, and TSCL believes they will be featured strongly in Social Security reform plans in the near future. Without vigilance from senior activists and strong efforts to fight benefit cuts, these proposals could be signed into law by President Trump before the end of the 115th Congress…
- Increasing the eligibility age. Life expectancy has increased in recent decades, and many on Capitol Hill believe Social Security’s eligibility age should be adjusted accordingly. Last summer, now-retired Congressman Reid Ribble introduced legislation that would raise the retirement age from 67 to 69 over the course of 12 years, and then tie the age of eligibility to life expectancy. His comprehensive reform plan received praise from many leading lawmakers, despite research that shows a one-year increase in the eligibly age amounts to an across-the-board benefit cut of roughly 7%.
- Adopting the “chained” COLA. Proposals to switch to a more slowly-growing Social Security cost-of-living adjustment (COLA) have been floating around the halls of Congress for years. Four years ago, the change even appeared as a bargaining chip in President Obama’s annual budget proposal. Budget hawks have touted it as a minor technical correction to the way inflation is measured, but according to TSCL’s research, it would amount to a significant benefit cut when compounded over the course of a retirement. After 25 years, Social Security benefits would be 7% lower under the “chained” COLA than they would be under the current inflation index.
- Means-testing benefits. Many Republican leaders on Capitol Hill have also supported proposals that would create a Social Security means test, so that moderate and high-income seniors would receive reduced monthly benefits. Back in 2010, the National Commission on Fiscal Responsibility and Reform proposed a solution that would “flatten” Social Security’s benefit formula, leaving high-income earners with comparable benefits to low-income earners. Creating a means test would transform Social Security from an insurance program – where benefits are based upon lifetime earnings – into a welfare program for older Americans, and many believe that it would dramatically weaken public support for the program over time and leave middle income seniors living close to the poverty level.
It’s too early to tell what President Trump and the 115th Congress have in store for older Americans, but TSCL believes the three proposals mentioned here will likely gain traction on Capitol Hill. In the months ahead, we will monitor negotiations to reform the Social Security program very closely, and we will continue to advocate for solutions that would strengthen and modernize the program responsibly, without cutting benefits for current or future beneficiaries. For progress updates, visit our website at www.SeniorsLeague.org, or follow TSCL on Facebook or Twitter.