The GOP's proposed changes to Social Security are more significant than just raising the retirement age.
"Flat benefit" plan would change the nature of the program
The Republican Study Committee in the US House gave Democrats a gift this week.
In its 2025 budget proposal, the RSC proposed major changes to Social Security.
Democrats pounced.
Most of the media attention has focused on the plan to raise the retirement age. But there’s another idea lurking in the Republican blueprint that deserves attention.
The RSC proposes “gradually moving towards a flat benefit.”
Republicans don’t go into detail, but conservative reformers have pushed the idea of a flat benefit for quite a while.
The pitch is essentially this: No longer would retirement benefits be tied to the wages beneficiaries earn during their working years. Instead, the program would move toward a flat benefit that would be aimed at providing enough money to keep seniors out of poverty.
Proponents of the flat benefit approach say it would deal with the program’s long-term fiscal challenges. The Heritage Foundation has said its plan, along with a few other program reforms, would cost a fraction of current costs and reduce payroll taxes, which would put more money into the pockets of Americans to save or spend as they wish.
However, critics of this approach say Social Security is a social insurance program, not an anti-poverty program, and that such programs are the kind that Republicans already try to cut.
You can argue about the merits of such an idea and the details, like how it would it be transitioned. But undoubtedly, it would be a radical change to the Social Security program. No longer would people who earned more money in their careers see it reflected in their Social Security checks. Instead, everybody would get … well, a flat benefit.
When the Congressional Budget Office modeled two flat benefit scenarios, at 125% and 150% of poverty, middle- and higher-income people saw hefty cuts, relative to current law. The people down the income scale saw an increase. The CBO also found it helped to markedly narrow the projected gap between Social Security’s revenue and its obligations.
I wasn’t surprised to see Republicans propose an increase in the retirement age. For years, they’ve been pushing the idea that a longer life expectancy should mean retiring later. The idea is unpopular with the public, but it’s not unheard of. In 1983, a bipartisan compromise raised the retirement age from 65 to 67, while also increasing revenues.
The changes extended the life of the program, but the nature of Social Security remained the same.
Conservative reformers want to change this, and the RSC is on board, too.
House Republicans are in a bind. The party is promoting “fiscal sanity.” But a central piece of the strategy is dealing with the challenges facing Social Security and Medicare.
Republican Party gospel won’t allow a tax increase, so they’re stuck with cutting benefits, even though some leaders were backing away from the plan after its release.
The RSC, which includes about 80% of the House GOP caucus, says seniors and people nearing retirement wouldn’t be affected by these changes. But even if that were to hold up, I’m not sure younger Americans want to see Social Security fundamentally changed.
Even if you just look at the idea of raising the retirement age, people of all ages have told pollsters they’re opposed.
How would they feel about a cut in benefits—even if they’re told the trade-off is they’d get more money sooner from a lower payroll tax?
I think they’d be suspicious. Which isn’t the best platform for a politician to stand on.
Most media reports say the RSC budget has no chance of passage; that it’s a statement of principles.
According to the Gazette’s Tom Barton, Rep. Ashley Hinson said that she opposes cuts to Social Security and is against raising the retirement age, too.
I’ve not seen any pushback on the plan from others in Iowa’s House delegation, but three of the four are members of the RSC, according to the organization’s website. Rep. Mariannette Miller-Meeks is not a member.
Donald Trump, meanwhile, has sent mixed signals on Social Security.
Previously, he’s said he opposed cuts. But a couple of weeks ago, he told CNBC: “There is a lot you can do in terms of entitlements in terms of cutting and in terms of also the theft and the bad management of entitlements, tremendous bad management of entitlements.”
President Biden, meanwhile, says he’d steadfastly oppose cuts. He’s proposed raising the income level on which Social Security taxes are levied. For 2024, it’s capped at $168,600.
If nothing is done, some estimates say that scheduled benefits will be reduced by 23% beginning in 2033. Which suggests at some point, Congress has to come to the table and find a solution. Or they’ll face a tremendous backlash.
In the meantime, the politics are still pretty hard.
So far this year, Republicans have been good at making the 2024 election about issues friendly to them: Immigration, the economy and inflation. But Democrats have some cards to play too: Trump’s legal troubles, his tendency toward chaos and autocracy and the confusion created by overturning Roe v. Wade.
The White House is trying to add Social Security to its side of the ledger. Now, the RSC is helping out.
Americans like Social Security. They may be worried about its fiscal future, but I see no evidence that Americans want to dramatically alter the program.
Every day Democrats focus on this and on plans to raise the retirement age is a win for them.
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With life expectancy declining or flat in the US this is no time to raise the retirement age. People are literally working themselves to death. Raise the cap on contributions and SS is in good shape. SS is the backbone of strong families where grandparents and parents have some degree of economic security that is not dependent on their children’s financial wherewithal. Joe Biden and Democrats need to fix SS. It is the only way it survives in its current form.
It used to be patriotic for public officials to present themselves as supporting federal programs for our seniors and specifically Social Security and Medicare, if not Medicaid. It used to be about as patriotic as making sure your political campaign materials had pictures of you at a senior center, or maybe a daycare, or a public school. I think GOP or other candidates who would harm Social Security will have trouble being welcomed in any senior center; for that matter, With the nursing home example of abuse and neglect, I should include all senior living facilities. I don't think GOP leaders are going to get a warm reception either in public schools or in child care centers. Ed did note that Hinson opposed this plan.