Take a fresh look at your lifestyle.

- Advertisement -

Analysis | Republicans are too thirsty for Social Security cuts


During President Joe Biden’s State of the Union address, Republicans in Congress sought to distance themselves from plans to cut Social Security. Do not believe it. Many Republicans are committed to cutting Social Security — even though 84% of Republicans and 86% of Democrats want those pensions increased. It’s bad enough for retirees and older workers. Cuts in benefits would only make them worse.

Make no mistake: House Republicans want to take advantage of the debt limit vote coming this spring to cut Social Security. That’s behind their proposal to create a committee to explore ways to lower Social Security costs. And last week, former Vice President Mike Pence said in a closed session that the government should partially privatize the program, which will reduce benefits for most families, including those most dependent on it.

Republicans seem to have forgotten the lessons of 2005, when newly re-elected President George W. Bush proposed privatizing Social Security, but dropped the idea after his ratings plummeted every time he brought it up.

And they also seem to have forgotten the lessons of 1983, when President Ronald Reagan and a Democratic Congress raised the retirement age to 67 and raised taxes to support the program. That deal was based on the hope that pensions and 401(k)s would expand to take up the slack, and that older workers would find suitable labor markets. That hope never materialized.

Now poverty rates among older Americans are on the rise, just as tens of millions of boomers are entering their early sixties and seventies. Americans aged 55 to 64 now work significantly more hours per week than their peers in other wealthy countries. Nevertheless, newly appointed House Budget Committee chair Jodey Arrington (a Republican from Texas) said earlier this month that he sees a new Social Security Commission as a repeat of the 1983 deal.

I expect Republicans in the House to pick up on the plan recently proposed by the Committee for a Responsible Federal Budget, a right-wing think tank in Washington. The CRFB would like to raise the Social Security retirement age to 70, which would effectively cut benefits from about 13% to 15% for people who go out of work and retire well before age 70.

Today, less than 5% of Social Security claimants claim at age 70 — even though they leave money on the table by claiming earlier. About 49% of men and 52% of women see large reductions in monthly benefits for taking their Social Security benefits before normal retirement age (67 for those born in 1960 or later).

Even if they prefer to keep working, most older men and women retire earlier than they would like; they are fired, they face physical or mental problems while working; or they have to take care of a sick spouse. Raising the retirement age to an ambitious number ignores this reality.

And many people who work past 70 or even 80 do so because they feel they can’t afford to stop. Do Republicans expect further cuts to help the likes of 82-year-old Warren Marion, a Walmart cashier who eventually planned to retire after a viral TikTok video and GoFundMe campaign netted him more than $100,000? TikTokker Rory McCarty posted the video and said, “I was stunned to see this little older man still grinding. Working in shifts from 8 a.m. to 9 p.m..” Marion said he intended to use the money to pay off debts, including his home. McCarty copied the idea of ​​a fundraising campaign that helped retire another octogenarian Walmart employee—one Carman Kelley, who pushed a shopping cart instead of a walker.

Republicans and Democrats alike should be ashamed that America’s retirement security has been eroded into random acts of kindness and GoFundMe pensions.

Cutting benefits in 1983 was a mistake. Most people approaching retirement now have nothing or almost nothing in a retirement account. And the vast majority of those over 62 (79%)—who had just started their careers in 1983—don’t have enough potential sources of income to maintain their pre-retirement standard of living.

More than 50% of older Americans derive most of their income from Social Security. Even though the average check is only $1,676, the program is still the main force in reducing retirement wealth inequality.

Cutting Social Security benefits is no idea whose time has come. It’s an idea whose time has come and gone.

More from Bloomberg’s opinion:

• $31 trillion isn’t the scariest number in the fight against the debt ceiling: Karl W. Smith

• Biden should limit credit card interest rates, not just late fees: Alexis Leondis

• Biden’s speech must reconcile two great promises: Jonathan Bernstein

This column does not necessarily reflect the views of the editors or Bloomberg LP and its owners.

Teresa Ghilarducci is the Schwartz Professor of Economics at the New School for Social Research. She is a co-author of “Rescuing Retirement” and a member of the board of directors of the Economic Policy Institute.

More stories like this are available at bloomberg.com/opinion

Leave A Reply

Your email address will not be published.