Social Security is under attack from some Republican politicians. The ability of those GOPers to change — even terminate — key features of the retirement income program hinges on who controls the next House of Representatives and Senate.
And GOP prospects in the upcoming Nov. 8 midterms are fueled in large part by Joe Biden's sinking popularity.
Since 1862, the incumbent president's party has lost House seats in 36 out of 40 midterm elections. It lost Senate seats in 13 out of 19, according to Fidelity Investments.
Social Security: Targeted By GOP?
Biden's popularity has indeed suffered. Only 39% of American approved of Biden's job performance as of Oct. 25, according to a Reuters/Ipsos poll.
His approval rating was 42% on June 1. It was 45% on March 8.
Biden's falling popularity and polling for House and Senate candidates in general gives Republicans confidence that they will fare relatively well in the midterm elections.
That could translate into a shift of control of the House at least to the GOP. "Many of them think they have the political momentum," said Dan Adcock, political action committee (PAC) coordinator and legislative director of the National Committee to Preserve Social Security & Medicare (NCPSSM), a nonprofit advocacy group. "So they think they can get away with talking about unpopular things like changes to Social Security. And that it won't be a drag on their chances to elect a majority in the House and the Senate."
What The GOP Aims To Change
What changes to Social Security benefits have GOPers called for? You can find a GOP wish list for Social Security in the Republican Study Committee (RSC) Blueprint To Save America. The Blueprint is the RSC's alternative budget for fiscal year 2023.
One change would shift the full retirement age (FRA). Now, FRA is 67 for people born Jan. 2, 1961, or later; that would shift to age 70 or later.
In turn, proposed changes could push the maximum-benefit claiming age to 72 or 73 from its current 70.
Under current rules, the longer you wait from age 62 to 70 to start benefits the larger your monthly benefits are. If your monthly benefit at age 67 would be $1,000, it would be just $700 at age 62. That's according to Nancy Altman, president, Social Security Works, a social welfare organization. If you wait until age 70, your starting benefit would be $1,240. There is no additional advantage to delaying the start of benefits beyond age 70, based on age alone.
Reduction In Social Security Benefits
Like bowling pins knocking one another over, those two changes would lead to a third one. That would be a reduction in the size of Social Security benefits if you retire at age 62. That's because the size of your monthly payment from the SSA at age 62, when you first become eligible for benefits, depends on the length of time until your eligibility for FRA. Since the new rule would extend the time between initial eligibility and FRA, your benefit at age 62 would be smaller.
"Under current law, people who turn age 62 in 2022 could see reductions of as much as 30% to 35% if they start benefits at 62" under the new rules, said Mary Johnson, Social Security and Medicare policy analyst for the Senior Citizens League. "If the first age of eligibility at 62 is kept the same, that would mean very deep reductions (in benefits) for individuals retiring earlier than their full benefit age at 72 or 73," Johnson said.
The uncertainty about whether 72 or 73 would be the new age of maximum benefit based solely on age is because the RSC budget calls for pushing the age back "and then (the age would) be indexed to increases in average life expectancies," said Social Security Works' Altman.
Under current rules, every year that you wait from FRA to age 70 to start to collect Social Security benefits, the size of your initial benefit grows by 8%. A different, more complex formula applies for every year of delay from age 62 to FRA.
Promote Privatization
A fourth change would undermine the payroll taxes that finance benefits by allowing participants and employers to divert some of their taxes to private savings accounts like IRAs.
A fifth change would alter the formula that determines the size of benefits by basing it on a person's 40 top-earning years of income. That would be up from the current top 35 years.
How could that hurt recipients financially? "Earnings would be averaged over a longer period of time," Johnson said. "That would reduce benefits for most people. In addition, those with work histories less than 40 years would wind up with zeros in their earnings records (for some years). This would tend to most negatively impact women who take time away from the work force for rearing children or caring for older or disabled family members."
How The GOP Sees It
How does the RSC justify its proposals? It reads, "The RSC budget would make no changes to benefits for current retirees. Instead, it would make modest changes to the benefit formula for those 54 and younger who reach early retirement in FY 2030."
The RSC also said its proposals are intended to "address the Social Security's solvency issues."
In addition, the RSC says it aims to make benefits more evenly distributed. The budget reads, "The Social Security Reform Act would produce a flatter benefit where workers who had lower levels of average lifetime earnings see higher benefits relative to current law while slowing the rate of growth for those that had higher levels of average earnings."
And the Blueprint says there is precedent for pushing back starting ages for benefits. FRA was age 65 until Congress changed it in 1983. Now it ranges from 65 to 67, depending on when you were born.
Republican strategists tell candidates that cutting Social Security benefits are not good issues for them, Adcock says. "These proposals are unpopular even among Republican voters. But there are other issues that they care about more. So even if it's against their self-interest to vote for a candidate who would cut their benefits, they may vote for that candidate because they think those other issues are more important."
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