With Republicans now in control of the presidency, as well as a majority in Congress and the Senate, the future of Social Security is in much worse shape than before. This political party is not known for its support of public assistance programs, and while Social Security, which provides financial security for millions of retirees, disabled people, and survivors, is one of the most popular programs in the country, particularly among their demographic, the campaign to defund it has been ongoing for a long time.
In truth, this period will be no different, as the trend has not yet shifted, and the Republican Study Committee (RSC) has already presented a budget that would cut Social Security by $1.5 trillion. These revisions now stand a much better chance of passing through both chambers and being signed into law. Some of the planned changes include:
Raise the Retirement Age
This has been one of the most persistent Republican ideas 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 individuals born in 1960 or later. The idea believes that raising it even higher, to 69 years old, will reduce the financial strain on the Social Security Trust Fund.
This theory was quickly disproven by the United States Senate Committee on the Budget (COB), which discovered that raising the retirement age would not change the year Social Security is projected to 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 viability; however, since the shortfall will occur regardless, a better option should take precedence.
Modifying the Cost-of-Living Adjustments (COLA)
This is a bipartisan plan, but as one might expect, both sides of the aisle disagree on this topic. The COLA, which is intended to help Social Security recipients keep up with inflation, is computed using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
This index weights categories and provides a percentage gain for all advantages. However, Republicans would like to replace this measure with the Chained Consumer Price measure (C-CPI), which normally grows at a slower rate than the CPI-W.
They claim that the C-CPI better represents changes in consumer behavior and inflation, and that slower growth would result in a lower COLA and so fewer benefits being delivered.
This might financially devastate many individuals who are already struggling to make ends meet as it is. In fact, Democrats and senior advocates want to modify the index to the Consumer Price Index for the Elderly (CPI-E), which measures expenditure among those aged 62 and up and has expanded faster than the present CPI-W. This would increase beneficiaries’ disposable income while hastening the program’s collapse.
Means testing for Social Security benefits
Means testing for Social Security payments is a proposed reform that would base payouts on an individual’s income and assets, potentially decreasing or abolishing benefits for higher-income seniors. Currently, payments are based on a person’s earnings history and contributions made during their working years, regardless of retirement savings. Proponents claim that means testing might shift funding to individuals in more financial need, extending the program’s stability. Critics argue that it compromises Social Security’s universal nature and may discourage retirement savings.
