The Republican War Against The Elderly

Every time Trump was questioned about Republican plans to gut Medicare and Social Security, he said he would not allow it, that he would “improve it.” That’s what Paul Ryan, Mike Pence and Tom Price say too— they want to make it “better.” Sounds better than saying they want to destroy it, huh? On Sunday Fox Business ran a report by Sean Williams that points to the Republican “reform” efforts financially crippling most seniors. He started by pointing out 6 in 10 seniors are reliant on Social Security and that over 80% of “pre-retirees will rely, to some degree, on Social Security income during retirement. In short, without Social Security we'd probably have tens of millions of seniors struggling to pay their bills during their golden years.”

Instead of agreeing to eliminate the cap so that rich people pay their fair share of Social Security, Republicans have gotten behind Sam Johnson’s proposal to “save” Social Security but shredding it. The GOP plan starts with two terrible ideas: 1- raising the retirement age to 69 in the hope that more people will die before they can ever make use of the money they’ve paid into Social Security their whole lives; and 2- using chained CPI to hold down cost of living adjustments, something that many conservative Democrats from the Republican wing of the Democratic Party (primarily Blue Dogs and New Dems) also support. 

Ro Khanna is a freshman from the San Jose/Silicon Valley area. He seems horrified by what Sam Johnson and the Republicans are proposing. “At a time when many workers face age discrimination and layoffs in their late 50s and early 60s,” he told us last night, “it's appalling to consider raising the retirement age or using chained CPI to lower benefits. The message of this election is that the working class is feeling the pain of globalization and automation. We need to strengthen the safety net, not dismantle it.” Here’s how Fox Business says the “Republicans' latest effort to save Social Security could wind up financially crippling, not helping, most seniors.”

1. Raising the retirement age punishes everyone

To begin with, raising the retirement age, while accounting for lengthened life expectancies over the previous five decades, would punish every single retiree under Social Security -- especially the 60% who are already filing for benefits before reaching their full retirement age. Your FRA is the point at which the SSA deems you eligible for 100% of your benefit payout. If Republicans move the bar higher, it means that today's workers would have to wait an extra two years to receive 100% of their retirement benefit.

Worse yet, your FRA also helps determine what your payout would be if you sign up for benefits anytime between age 62 and age 70. With an FRA of 66 years, claiming at age 62 results in a payout that can be reduced by as much as 25%, while waiting until age 70 could increase your payout by as much as 32% over your FRA benefit. If the new bar becomes 69 years of age, claiming at age 62 would reduce your benefit even more, and the incentive to sign up after age 69 would provide only a marginal increase over your FRA benefit.

2. The chained CPI puts seniors in an even bigger hole relative to medical-care inflation

The Social Security Reform Act of 2016 could also devastate each and every recipient by switching to the chained CPI from the CPI-W.

By no means is the CPI-W perfect. A December 2011 comparison of the CPI-W and the Consumer Price Index for the Elderly -- a measure that looks solely at the spending habits of households headed by people aged 62 and up -- by the Bureau of Labor Statistics found that the CPI-W drastically underemphasizes medical costs and housing costs for seniors, while overemphasizing transportation, food, apparel, and education expenses. In simple terms, the CPI-W isn't accurately keeping pace with the real inflation Social Security beneficiaries are facing, especially when it comes to medical-care inflation.

However, the chained CPI is even worse. It grows at an even slower pace than the CPI-W because the chained CPI factors in the potential for consumer substitutions. In other words, when prices rise, the chained CPI takes into account the likelihood that consumers will switch out a more expensive good or service for a cheaper one. With this factor accounted for, the chained CPI would be expected to result in smaller "raises" for Social Security recipients, putting them in an even greater hole due to the effect of medical-care inflation.

3. Eliminating the taxation of benefits hurts more than it helps

On one hand, the tax thresholds that determine whether or not your Social Security benefits are subject to taxation by the federal government haven't been adjusted for inflation in 33 years, so there's clearly some optimism behind phasing out and eliminating the taxation of benefits. Middle-income retired workers would probably receive a welcome boost in their monthly payout.

But removing the taxation of Social Security benefits also seems like a foolish move considering that the program needs more revenue to sustain its current payout trajectory, not less revenue. Furthermore, it only makes sense for higher-income individuals and couples who aren't reliant on their Social Security income to pay some level of tax on those benefits. Ultimately, removing revenue from the program by eliminating the taxation benefits could hurt more than it helps.

While there are certainly two sides to this issue, and the Republican plan to save Social Security has redeeming qualities, there are genuine reasons for future generations of retirees to be deeply concerned about the Social Security proposal Republican lawmakers have put on the table. If the plan is implemented, the real purchasing power of Social Security benefits could be greatly reduced in the years to come, which is terrible news for a majority of current and future retirees.

John Goodman is an author and academic and one ion the country’s leading thinkers on health care policy. His policies seem to bend a little to the right but in the new issue of Forbes he asks why Paul Ryan and the GOP have screwed up healthcare so badly.

Do you think it is a bit strange that after 7 years, Republicans in Congress still don’t have a replacement plan for Obamacare? Or that they now tell us that developing one will take 3 or 4 more years. And of course, once they have a plan it will take state governments and insurance companies two or three more years to phase it in. So, we are looking at a decade’s delay. That’s if we are lucky.

Suppose the tables were turned. If Obamacare were a Republican reform and Democrats controlled Congress, how long would it take the Democrats to come up with a better plan? They’d do it in a heartbeat. They would do it by doing what Democrats are traditionally good at: putting ideology aside and finding solutions that make all the major stakeholders better off.

Why can’t Republicans do that? Because they don’t know how to put ideology aside and they are unable to honestly communicate with their base on what Obamacare reform really means. The result is a series of Republican plans with elements that almost all Republicans have already said they won’t vote for.

Last night, Bernie sent a message to his supporters about standing up to the Republican efforts against working families. If you didn’t see it, this is the heart of it:

In less than one week, the new Republican Congress will begin their efforts to dismantle America’s health care system. Their goal is to take away health insurance from tens of millions of Americans, privatize Medicare, make massive cuts to Medicaid, increase prescription drug prices and defund Planned Parenthood. At the same time, in the midst of a grotesque and growing level of income and wealth inequality, they want obscene tax breaks for the top one-tenth of 1 percent.

As we enter the new year, our message to the Republicans is simple and straight forward. You are not going to get away with it. You are not going to punish the elderly, disabled veterans, the children, the sick and the poor while you reward your billionaire friends.

Stopping this Republican assault on the working class of this country will require the active participation of millions of Americans in every community in our country. In fact, it will require nothing less than a political revolution that engages millions of people from all walks of life, regardless of whether they voted for Hillary Clinton, Donald Trump or anyone else.

On Sunday Jan. 15, Democratic members of Congress, trade unions, senior citizen groups, health care activists and all those who believe in economic and social justice are organizing a day of action called “Our First Stand: Save Health Care.” Rallies will be held around the country. Now I need to know that you’re in:

Add your name to demand that Congress protect and expand the health care needs of working families, not cut them. Tell Trump and Congress that they must pass legislation that makes the wealthy start paying their fair share of taxes instead of trying to slash life-or-death programs that tens of millions of Americans rely on.

Change will never happen from inside of Washington, D.C. — it will always come from our communities and the grassroots. That is what the history of America is all about. Whether it’s the creation of the trade union movement, the women’s movement, the civil right’s movement, the environmental movement, the gay rights movement and more, justice prevails when we stand together. We lose when we are divided or apathetic.

So Senate Democratic Leader Chuck Schumer, House Democratic Leader Nancy Pelosi and I have asked my colleagues in Congress to organize events in their states and their districts where people can come together and make their voices heard. We will win when we are all in this fight together.

With Donald Trump set to take office and Republicans in control of Congress, it’s more important than ever that we recommit ourselves to building a movement that transforms this country and brings people together around an agenda that works for the working families of this country, and not just the 1 percent.