Jul 20, 2017

The House Budget Resolution

     Below is the language from the House Draft Budget Resolution (starts on page 104) concerning Social Security:
(b) POLICY ON SOCIAL SECURITY. — It is the policy of this concurrent resolution that the House should work in a bipartisan manner to make Social Security solvent on a sustainable basis. This concurrent resolution assumes, under a reform trigger, that —
(1) if in any year the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund annual Trustees Report determines that the 75-year actuarial balance of the Social Security Trust Funds is in deficit, and the annual balance of the Social Security Trust Funds in the 75th year is in deficit, the Board of Trustees should, no later than September 30 of the same calendar year, submit to the President recommendations for statutory reforms necessary to achieve a 75-year actuarial balance and a positive annual balance in the 75th year, and any recommendations provided to the President must be agreed upon by both Public Trustees of the Board of Trustees;
(2) not later than December 1 of the same calendar year in which the Board of Trustees submit its recommendations, the President should promptly submit implementing legislation to both Houses of Congress including recommendations necessary to achieve a positive 75-year actuarial balance and a positive annual balance in the 75th year, and the majority leader of the Senate and the majority leader of the House should introduce the President’s legislation upon receipt;
(3) within 60 days of the President submitting legislation, the committees of jurisdiction should report a bill, which the House or Senate should consider under expedited procedures; and
(4) legislation submitted by the President should — 
(A) protect those in or near retirement;
(B) preserve the safety net for those who count on Social Security the most, including those with disabilities and survivors;
(C) improve fairness for participants;
(D) reduce the burden on and provide certainty for future generations; and
(E) secure the future of the Disability Insurance program while addressing the needs of those with disabilities today and improving the determination process. 
(c) POLICY ON DISABILITY INSURANCE. — It is the policy of this concurrent resolution that the House should consider legislation on a bipartisan basis to reform the Disability Insurance program prior to its insolvency in 2028 and should not raid the Social Security retirement system without reforms to the Disability Insurance system. This concurrent resolution assumes reform that—
(1) promotes opportunity for those trying to return to work;
(2) ensures benefits continue to be paid to individuals with disabilities and their family members who rely on them;
(3) prevents a 7 percent across-the-board benefit cut;
(4) legislation submitted by the President should — 
(A) protect those in or near retirement; 
(B) preserve the safety net for those who count on Social Security the most, including those with disabilities and survivors;
(C) improve fairness for participants;
(D) reduce the burden on and provide certainty for future generations; and
(E) secure the future of the Disability Insurance program while addressing the needs of those with disabilities today and improving the determination process.
(d) POLICY ON SOCIAL SECURITY SOLVENCY. — It is the policy of this concurrent resolution that any legislation the House considers to improve the solvency of the Disability Insurance Trust Fund must also improve the long-term solvency of the combined Old Age and Survivors Disability Insurance Trust Fund.
     Some comments:
  1. Seventy-five years is a very long time. Securing Social Security for 75 years into the future would require either dramatic cuts in Social Security benefits, significant tax increases or some combination of the two. How likely is it that a Republican controlled Congress would enact tax increases? No, this is Republicans trying to find a way to cut Social Security.
  2. This includes the idea that the public will accept cuts in Social Security if we just "protect those in or near retirement."  Republicans have been pushing this idea for decades but the public hasn't been buying it -- at all. By this point, the faith of Republican leaders that this plan will work is pathetic.
  3. Even though the draft resolution calls for no cuts in Social Security benefits for those in or near "retirement" it would be almost impossible to apply this to disability benefits. Accomplishing the goals of this resolution without "raiding" the retirement trust fund and without raising taxes would require dramatic cuts in disability benefits for those already on benefits unless there was some draconian limit on the number of people going on disability benefits. I don't know how you'd achieve this kind of savings without something like that 7% across the board cut.
  4. Note that this draft doesn't say exactly what should be done. It just demands that the President and other Congressional committees do something. The resolution keeps saying what others "should" do. What if they don't actually do what this resolution says they "should" do? This is not a rhetorical question. Trump is unlikely to propose cutting benefits or raising taxes. The votes won't be there to report a bill out of committee that would do either. It's a bigger non-starter than enacting Trumpcare. This is a wistful statement of what Republicans in Congress would really love to do if they didn't have to worry about those pesky voters back in their districts.

18 comments:

Anonymous said...

There were cuts in SSA before--1983 Amendments changing how future benefits were calculated. Remember the "notch years?'

Anonymous said...

They need to think outside of the box. Offer current SSDI recipients a buy down of some sort that reduces payments by a targeted percentage in return for making their benefits permanent until death. Specially for those with 5 - 7 year diary reviews. Say a 10% reduction (or whatever number works) in exchange for no more CDRs or potential removal from the program. It would be something people would have to volunteer for. I wonder if that could generate savings and reduce the work load SSA faces. I wonder if people would even be interested in signing up for something like that to avoid the chance of benefit cessation. I guess my point is to try some things they do in the private sector when they have to reel in costs. I have no idea if the math would work.

Anonymous said...

COMPLETELY REMOVE THE WAGE CAP -
PROBLEM SOLVED.

Today's Republicans will never do this. However, with pressure from the pesky voters who do not want any part of Social Security to fail, it will come to this sooner or later, and sooner would be better.

Today's ideological, alt-right wing dominance of the Republican Party who are obstructionists, refuse to compromise, or even talk with those across the aisle, cannot succeed, absent extraneous, (violent), measures, over the long run. Their ideological policies only serve the ultra rich and wealthy, resulting in ever increasing income inequality. Sooner or later, the masses will see through this, and finally vote their own best interests.

Anonymous said...

Life expectancy has been growing about one month per year since the 75 year deal enacted in 1983 that was to leave Social Security sound until 2058 (right now more like 2034).

Want to save Social Security?
Cut the tax on smokes
Cut the tax on booze
Pull the regulation of marijuana.
Maybe back off a bit on opioids and coke.
Pass the senate health care bill
Put a cap on annual medical expense per person after age 65 and bar spending on anything other than palliative care on anyone with a projected life span of less than one year.
Make airbags in cars optional.
Remove speed limits on rural interstates and raise them elsewhere.
Water down the Clean Air Act and Clean Water Act.

Give it a few years and the problem fixes itself.

Anonymous said...

Cut the Baby Boomers Benefits, if they would have paid a higher tax amount, about .25% when they started working this would have never been an issue. The most entitled generation needs to pay for the shortfalls they created.

I have no faith that I will get my benefits, but you can sure bet the Boomers will!

Anonymous said...

@5:02 I don't need faith that I will get my paid-for benefits. If any fool in my congressional delegation tries (or even says) they want to cut them not only will I vote against them, I will donate to their opponent in the next election...as will many others.

AKM said...

Cut the Baby Boomers Benefits??? What are you thinking??? ALL PEOPLE ARE EQUAL!

Anonymous said...

5:02 You better look at the greatest generation they paid 5 dollars a week and are still getting what baby boomer will get when we retire. I have a 95 year old mother-in law that lives with us and she gets over 1000 dollars a month and I know that she paid 5 dollars a week for years. When they reformed SSI back in the 80's I was in my early 20's at that time and we took the hit on that reform so stop blaming the boomers. We have paid our fare share, you better look at the generation that raised us for the problems of today.

Anonymous said...

9:13 in what alternative fact world do you live in where you believe that Boomers have paid their fair share? Knowing for decades that the cohort was the largest in the nation and knowing the generations after were smaller, did the Boomers, while in control of the government and the work force, increase the FICA by 0.25% to save the fund? Did they kick the can? ignore the problem they created? Take any responsible action knowing that for the next 30 years 10000 people a day turn 65? NO!

I love the typical Boomer response, blame someone else.


Anonymous said...

@5:02 and 10:12:

Typical, entitled Millennial. No critical thinking skills, or substantive ideas offered about how to go about solving the problem, just blaming someone else, in this case members of the Baby Boom generation. These types of comments serve no useful purpose. To the contrary, they are divisive. Instead of working together in Unity, or as a Team, to come up with innovative solutions to resolve the problems, the only comments you have to offer is to place blame on someone else, or another group of people. This is not what mature human beings do.

Further, 9:13's comments concerning the Greatest Generation before the Baby Boomers is quite accurate. During my life, I had the pleasure to know all of my great grandparents and grandparents. Many drew SSA benefits far into their late 80's and 90's, way beyond the years they paid into SSA.

All of us must unite and work together to save SSA going forward. The best solution which has the least impact on others, especially the most vulnerable in our society, us to completely remove the wage cap altogether. If this were done, there would be no need to reduce disability or retirement benefits, or eliminate certain types of SSA benefits all together. The question is whether we are willing to unite as a society to preserve what has been the most successful benefit program we have ever had, or be divisive, and allow greed to destroy all of it for the benefit of ONLY the most wealthy 1% in our society? Under this scenario, we all lose except the ultra rich. If Republicans have their way, this is, indeed, what they want to happen more than anything else. So, we're in this together. Do we choose divisiveness and allow Republican greed to completely destroy SSA, or unite and work together to maintain what had been the best benefit program in our history?

Anonymous said...

Seems counter-productive to call for unity and working together after leading with
Typical, entitled Millennial. No critical thinking skills, or substantive ideas offered about how to go about solving the problem, just blaming someone else, in this case members of the Baby Boom generation.

Anonymous said...

This is 9:13 you want a solution gradually raise the retirement age to 69 and raise FICA tax 1 percent across the board and if you retire at 62 you only get 40 percent. Just like our parents did to us.

Anonymous said...

No, completely remove the wage cap - problem solved.

Anonymous said...

@1:42:

I do not think 11:53's comment is counter-productive. To the contrary, the paradoxical remarks allow the Millennial to see how s/he sounds, while at the same time providing insight into how mature adults think.

Anonymous said...

Millenials and Baby Boomers should not turn on each other. They all deserve dignity in retirement, or if disabled. We should all turn on the politicians who want to cut Social Security. Beating them is the solution, not trying to beat each other.

Arizona Jim said...

Republicans Social Security "sin" is they view its balance sheets from an accountant perspective. Anyway, this isn't a call to cut anything but seeks bi-partisan solutions.

Anonymous said...

Since Millennials will be paying the Social Security tax that funds boomer retirements, smart strategy is quit insulting them.

They've been screwed over and know it. They get to fund paying off the wars no one bothered paying for it. Their highways were built on debt not pay as you go financing so they pay gas tax that goes to paying bonds. Higher ed funding strangulation means taxes pay a third of the cost of college not 2/3rds as it was with the Boomers.

Most have discovered stable employment is a thing of the past. Gee why are they in such a bad mood?

Anonymous said...

Boomers need to remember they are moving out of power. They will be treated as they have been treating everyone else. Enjoy your Tender Vitals!