Republican control of the presidency, Congress, and Senate puts Social Security in even worse shape. While this political party is not known for its support of public assistance programs, the campaign to defund Social Security, which provides financial security for millions of retirees, disabled people, and survivors, has been ongoing for a long time.
In fact, this period will be no different, as the tide has not yet shifted, and the Republican Study Committee (RSC) has already proposed a budget that would cut Social Security by $1.5 trillion. Now, both chambers are more likely to approve these changes and sign them into law. Some of the proposed changes include:
Raising the Retirement Age
This has been one of the most consistent Republican proposals in recent years. The full retirement age has gradually increased since the Social Security Collapse in the 1980s, and it now stands at 67 years old for those born in 1960 or later. The proposal believes that raising it even higher, to 69 years old, will reduce the financial strain on the Social Security Trust Fund.
The United States Senate Committee on the Budget (COB) quickly disproved this theory, finding that raising the retirement age would not change the projected year Social Security would go bankrupt and that, as is customary, this policy change would disproportionately affect low-income retirees, who must work until full retirement age and sometimes even later.
The Republican party justifies this extension by claiming that raising the retirement age reduces the number of years benefits are paid out, extending the program’s solvency; however, since the shortfall will occur regardless, a better proposal should take precedence.
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Modifying the Cost-of-Living Adjustments (COLA)
This is a bipartisan proposal, but as one might expect, both sides of the aisle disagree on this issue. The COLA, which is intended to help Social Security recipients keep up with inflation, is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
This index weights categories and provides a percentage increase for all benefits. However, Republicans would like to replace this index with the Chained Consumer Price Index (C-CPI), which typically grows at a slower rate than the CPI-W.
They contend that slower growth would lead to a lower COLA and, consequently, the distribution of fewer benefits, and that the C-CPI better reflects changes in consumer behavior and inflation.
This could severely impoverish numerous beneficiaries who are already grappling with financial difficulties. In fact, Democrats and senior advocates want to change the index to the Consumer Price Index for the Elderly (CPI-E).
Which measures spending among people aged 62 and up and has grown faster than the current CPI-W. This would increase beneficiaries’ disposable income while hastening the program’s insolvency.
Means Testing for Social Security Benefits
A proposed reform, known as means testing for Social Security benefits, would base payouts on an individual’s income and assets, potentially reducing or eliminating benefits for higher-income retirees.
Currently, benefits are based on a person’s earnings history and contributions made during their working years, regardless of retirement savings. Proponents argue that means testing could shift resources to those in greater financial need, extending the program’s solvency.
Critics argue that it undermines Social Security’s universal nature and may discourage retirement savings.
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