Hiltzik: Republicans are targeting Social Security again

It used to be a truism that no elected official would dare tamper with Social Security if they wanted to keep their job.

That may no longer be true given the increase in threats against the revered program that have come from the GOP of late.

In their most recent manifestation, four Republicans who aspired to chair the House Budget Committee in a Republican House of Representatives spoke openly about holding the federal debt ceiling hostage to an “entitlements” agreement — that is, Social Security and Medicare — that is clearly aimed at benefits to shorten .

Republicans have a list of authority reforms, and we don’t like the tax hikes.

— Rep. Jodey Arrington (R-Texas)

In fact, Republicans are proposing to deny benefits to millions of Americans, all in the name of “empowering and bolstering” these programs, as Steve Scalise (R-La.), House Republicans whip the proposals for Fox News Oct. 24 described. 16. More on that in a moment.

In interviews with Bloomberg, the four laid out their vision. Rep. Buddy Carter (R-Ga.) said the GOP’s focus on budget cuts “must be on entitlements.”

Rep. Jodey Arrington (R-Texas) told Bloomberg that the party’s caucus would oppose options to shore up Social Security tax conditions that include tax increases, but would welcome an increase in the eligibility age for that program and Medicare.

“Republicans have a list of reforms to do, and we don’t like the tax hikes,” Arrington said.

Meanwhile, House minority leader Kevin McCarthy (R-Bakersfield) – who hopes to become Speaker if the GOP gains control of the House – added his voice to the GOP chorus calling for the debt ceiling to be ” Leverage to achieve their fiscal targets.

McCarthy was wary of tying the debt ceiling to benefit cuts, telling Punchbowl News in an interview that he would not “predict” options. But his Republican compatriots weren’t so evasive in their Bloomberg interviews.

“The debt limit is clearly one of the tools Republicans are going to use to make sure we’re doing whatever it takes to make this economy strong,” said Rep. Jason Smith (R-Mo.), the senior Budget Committee member.

This isn’t the first time the GOP has attempted to portray Social Security and Medicare as enemies of sound tax policies. Senate Minority Leader Mitch McConnell put it in 2018. Joni Ernst
(R-Iowa) spoke openly about cuts “behind closed doors.” Late. Marco Rubio (R-Fla.) has drawn up a plan for family vacations funded by the crackdown on future Social Security benefits.

Let’s examine this talk and gauge its potential impact on Americans of all ages.

First, the debt ceiling.

As I’ve reported almost more times than I can remember, the debt ceiling is the most infantile feature of American policymaking. It’s also one of the most misunderstood, and that’s exactly what gives the GOP the ability to use it as a weapon. Republicans contend that the ceiling, which limits the Treasury Department’s spending on federal debt but can be raised by a vote in Congress, represents a hard limit on federal spending and that an increase leads to more waste.

It doesn’t do anything like that. The debt ceiling was originally intended not as a limit on the Treasury Department’s powers to issue debt, but as a way to grant it amuse to borrow leeway. It was passed in 1917 when Congress was tired of having to vote on every proposed bond issue, which it found irksome. So instead it chose to give the Treasury blanket powers to issue bonds, subject to a makeshift restriction.

The cap was never designed to prevent Congress from passing spending legislation or deficit-building tax breaks that it wanted. Raising the debt ceiling does not help increase spending; it merely authorizes borrowing for debts already incurred by Congress.

The need for a regular vote to raise the cap merely gives Republicans an opportunity to comment on Democrats’ spending proposals. Since a vote on the debt brake will be necessary next year, this is happening now.

In 2011, I observed that the debt ceiling had been raised 91 times by congressional vote since 1960, generally without discussion. Including seven times under George W. Bush and three times (until then) under Barack Obama. That year, Republicans took control of the House of Representatives, and the debt ceiling became the raw material of a political stunt.

The economic consequences of exceeding the debt ceiling are devastating. Payments on existing debt would be halted, as would Social Security checks, Medicare reimbursements to doctors and hospitals, and paychecks to military families.

Destroying the US government’s pristine history of always paying its debts would immediately raise its borrowing costs, put more strain on its budget, and drastically reduce the value of government securities held by individuals and pension funds, not to mention investors in other countries.

From time to time, Republicans get at least a little of what they want in the debt ceiling battles. It’s never good for the public. The 2011 version led to the Sequester, an automated austerity regime aimed at suppressing non-defense spending.

The confiscation was a weapon Congress held to its head, designed to be so deadly that our lawmakers would not dare pull the trigger in the form of draconian budget cuts. Nobody told the trigger finger. So the budget cuts came into effect.

The confiscation reduced gross domestic product by 1.2% and cost up to 1.6 million jobs in the first two years.

Tens of thousands of 3- and 4-year-olds have been denied access to Head Start, perpetuating the cycle of poverty and poor education faced by their families. Unemployment benefit was cut nationwide by an average of 15%. (Conventional pay and benefits were, of course, exempt from these cuts.)

Now let’s examine the GOP proposals for Social Security and Medicare. According to the party’s model federal budget, they include raising the eligibility age for Social Security and Medicare up to 70 years.

This idea is both ignorant and insane. The current full retirement age for Social Security is 67 for people born in 1960 or later, but workers can start collecting as early as age 62 (wait until age 70.)

Most workers don’t wait until full retirement age to start receiving benefits, almost always because they can’t — they need the money and can’t keep working. According to program statistics, about 37% start drawing their pension at age 62, more than half before reaching full retirement age. Only about 6.7% can afford to wait until age 70. In other words, if you made people wait, more than 98% of future beneficiaries would be left behind.

The GOP defends this proposal by noting the increase in life expectancy for those who live to age 65 – “the average life expectancy for males who live to age 65 has increased from 77.7 to over 82.9 years,” they write them in their budget – implying that the average American is spending longer time accumulating for retirement than in the past. However, the average hides a great variety.

Life expectancy tables released by the Centers for Disease Control and Prevention show that the numbers given by the GOP are mostly for white males. For black men, the average life expectancy is just 81 years – two years less than the white male cohort. Would Republicans adjust to this discrepancy? They don’t say so the answer is probably no.

The Republican plan would also allow workers to divert some of their Social Security contributions to private pension plans. The downsides to this idea are no secret — thankfully, they helped torpedo a similar proposal by George W. Bush in 2005.

The GOP says its goal is to “give workers the freedom to choose how they save their own money for retirement.” Here’s a translation of that encoded phrase: It’s a way to put your retirement savings in the hands of Wall Street. The GOP claims that “requiring all young workers to participate in a unified state pension program makes no economic sense.”

In fact, it makes perfect economic sense. The great advantage of Social Security is that it is there for everyone, regardless of the prevailing winds in the investment market, throughout everyone’s life. It is a lifetime, anti-inflation bulwark against bad or wrong investment decisions.

No private tariff can do that; No private plan has the disability insurance component of Social Security, which pays a full benefit to workers who are incapacitated by injuries and their families.

If you want a counterpoint to Republicans’ praise for the 401(k) plans in their budget proposal, the stock market has you covered: It’s down about 23% of its value since the beginning of this year. If you’ve been relying on your 401(k) to provide you with short-term retirement, you may need to do some recalculation.

By the way, raising the eligibility age for Medicare won’t save Americans a penny. It will only mean people will have to stay on private plans five more years and risk medical bankruptcy if they experience a major medical event, which is hardly unusual in the 65-70 age group. Many will end up on Social Security during those years, which just means the costs borne by Medicare will be transferred to Social Security. How’s that a win?

To give them little credit, Republicans have made no bones about their intention to shut down these programs, even though they frame their proposals in misleadingly positive terms like “empowerment and support.” You will pay the price if any of these ideas come to fruition. Don’t say you weren’t warned.

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