Lawmakers Aren’t Giving Up On Benefit Cuts
By Jessie Gibbons, TSCL Legislative Director
Earlier this year, after passing a $1.9 trillion tax bill in December and a $1.3 trillion spending package in March, leaders in the House called for a vote on a balanced budget amendment to the constitution that could have been disastrous for your Social Security and Medicare benefits. The amendment ultimately failed in the House, thanks to the voices of concerned citizens like you, but many lawmakers have said they aren’t giving up on the drastic measure.
A balanced budget amendment to the constitution, like the one that was considered this year, would prohibit the federal government from spending more than it collects in revenues each year. It’s a budget gimmick that would essentially make it unconstitutional for Social Security and Medicare to use the trust fund reserves they currently have to pay out benefits, because it would prohibit “borrowing” even when new revenues are insufficient to pay out benefits. Additionally, the federal government would be prohibited from repaying the $2.7 trillion it currently owes to the Social Security trust funds.
That means the trust fund reserves – money that came out of your paychecks to finance your earned benefits – would become unusable by the Social Security and Medicare programs. Here’s how that could lead to benefit cuts…
- Social Security and Medicare Part A (hospital insurance) would have to rely solely on the payroll tax revenues they collect each year to pay out benefits or pay medical providers like physicians.
- Borrowing money to fund Social Security and Medicare benefits would not be possible unless that option could win the support of three-fifths (60%) of both the House and Senate.
- If Congress could not reach an agreement to borrow money, Social Security and Medicare benefits would be cut when payroll tax revenues run out as they inevitably would.
A balanced budget amendment to the constitution might sound like a good idea on the surface, but when the details are examined, it could be disastrous for programs like Social Security and Medicare. The Senior Citizens League tirelessly advocated against its adoption when it was considered earlier this year, and because lawmakers aren’t giving up on it anytime soon, we aren’t either.
That’s why we endorsed legislation from Congressman Ted Deutch (FL-22) that would protect the earned benefits of older Americans, by exempting Social Security and Medicare from any requirements of a balanced budget amendment. The bill – H.R. 5466 – would go a long way in protecting the retirement security of older Americans against irresponsible measures like the one that was considered this year.
TSCL understands that the budget deficit is growing out of hand. According to the non-partisan Congressional Budget Office, the massive tax reform and budget bills recently adopted by Congress will cost the federal government an estimated $2.7 trillion over the next ten years. However, TSCL firmly believes that a constitutional balanced budget amendment, that would disproportionately impact seniors and limit the ability of Congress to respond to economic downturns, is not the solution to the problem.
In the coming weeks and months, TSCL will continue to advocate against this balanced budget amendment to the constitution, and we will ask lawmakers to protect the earned benefits of older Americans by supporting legislation like H.R. 5466 from Congressman Ted Deutch. For more information or updates from Capitol Hill, visit our website.