Republican plans to 'cut' Social Security and raise Retirement Age 'should terrify voters'
Millions of seniors rely on Social Security every year to make ends meet, but recent proposals could see peoples' retirement benefits cut substantially.
Experts are warning that the Republican Party’s plans to overhaul Social Security should “terrify voters”.
Earlier this year, the Republican Study Committee (RSC) published its FY 2024 Budget Protecting America’s Social Security.
Policymakers in Washington are negotiating changes to the retirement benefit system in light of concerns that the Social Security system will become insolvent by 2023.
According to analysis, Republicans are proposing cuts to Social Security and raising the Retirement Age.
Alicia H. Munnell, the director of the Center for Retirement Research at Boston College, is sounding the alarm that “rich” Americans will not be the only ones experiencing these cuts.
The finance expert broke down the three major proposals that make up the RSC’s planned overhaul of the Social Security system.
These include raising the Full Retirement Age (FRA) from what it now, at 67, to a higher threshold of 69.
Furthermore, Republican policymakers are recommending that benefits for above-average earners be dramatically reduced.
Finally, the RSC is suggesting the cost-of-living-adjustment (COLA), which is used to determine the annual rate hikes to retirement payments be scrapped for higher earners.
Instead, the conservative group has put forward the idea of using a chain-weighted inflation index for those who qualify for a COLA.
On these recommendations, Ms Munnell said: “At first glance, one might conclude that’s a fine outcome – cut the benefits of the well-paid and preserve the benefits of the low-paid.
“But the medium worker, who sees benefits drop to 77 percent of current law, had career average earnings of $58,700 in 2022 and the ‘high’ earner, who sees benefits drop to 40 percent of current law, earned $94,000. These are not rich people.”
Despite this, the retirement expert cited that changes need to be made to secure seniors a better deal in the long run but warned that Americans should be worried if these proposals are implemented.
She added: “Moreover, changes to Social Security need to be made in the context of the entire retirement income system.
“Many households are likely to retire with little other than Social Security benefits, since at any moment in time less than half the private sector workforce participates in an employer-sponsored retirement plan.
“Policymakers do need to address Social Security’s long-run deficit, but the fact that a majority of House Republicans may support a plan that cuts Social Security by a third should terrify voters. Why put out such a document?”
