As readers of this column know I have been doing what I can to try to let people know that the Trumpublican Party is doing all they can to severely cut SS benefits and if possible hand the money that is currently in the SS accounts to the gamblers on Wall Street. This has been an unstated policy of what was once the Republican Party since the day FDR signed the Social Security Act on August 14th of 1935.
One of the little known provisions of the bill that gave corporations and the wealthy huge tax cuts was a provision that changed how the COLA (cost of living adjustment) is calculated for Social Security. This made raises in SS much harder to come by and much lower when they come. From the National Committee to Preserve Social Security and Medicare:
“The “chained” Consumer Price Index (CPI) for making cost-of-living adjustments (COLAs) was incorporated into the tax code with the 2017 revision of the tax law. It was a little-noticed provision that adjusts tax brackets and eligibility for deductions and is expected to push more Americans into higher tax brackets more quickly.
The National Committee is concerned that a proposal to move to a chained CPI for Social Security benefits may be considered an option for balancing the budget and cutting Social Security benefits. In fact, the House Republican Study Committee’s FY 2019 Substitute Budget Resolution included switching to the chained CPI for cost-of-living adjustments, increasing the full retirement age to 70 and indexing it for life expectancy. This proposal will reduce benefits for current and future retirees, while increasing their taxes.
Beginning in 2000, a new index became available – the chained CPI-U. This index is updated to reflect changes in spending patterns as prices increase on a month-by-month basis, as opposed to every two years in earlier indices. For example, if the price of apples increases while the price of bananas remains constant and consumers respond by buying fewer apples and more bananas, the current index does not fully account for the substitution, while a chained-CPI-U does. However, not all the “substitutions” are this simple – for example, consumers forced to spend more on fuel, may spend less on food – so that the ability of some groups, such as seniors with health care expenses, to adjust and make substitutions becomes difficult.
Replacing the current CPI-W with the chained-CPI-U for purposes of calculating the Social Security COLA will reduce benefits for current and future beneficiaries. The chained-CPI-U produces lower estimates of inflation than the current CPI does, averaging about 0.3 percentage points lower than the increases in the current CPI since December 2000. The Chief Actuary of the Social Security Administration estimates that after three years of enactment this reduced COLA would result in a decrease of about $130 per year (0.9 percent) in benefits for a typical 65 year-old. By the time that senior reaches 95, the annual benefit cut will be almost $1400, a 9.2 percent reduction from currently scheduled benefits.”
That was step one, but certainly not enough for those hell bent on crippling Social Security. Now Dear Leader is finding himself in a world of hurt thanks to his economic policies that have greatly enhanced an already extreme inequality situation and tariffs that have backfired on our country. Many economic indicators point increasingly to a a coming big recession.
So Dear Leader lands on an old Republican idea of cutting SS payroll taxes for workers. While the shortfall of income to the SS trust fund would (supposedly) be made up by money from the General Fund this idea is a precarious idea at best. First, one of the saving graces of Social Security is that the trust fund money is separate from other government funds. Second once that wall is breached the mixing and mingling of funds would eventually lead to SS being paid out of general funds. At that point it could become a discretionary budget item with a possibility of changing yearly.
Finally of course is how far can you trust a promise from Dear Leader or any Trumpublican. A promise to restore Social Security funds lost in payroll tax cuts from general funds could easily become a political football in congress rather quickly.
As the graphic above shows Dear Leader bounced from no payroll tax cuts to payroll tax cuts and back to no payroll tax cuts as if he was on a bungee cord just bouncing in the wind.
A promise to save Social Security from any Trumpublican candidate, such as Joni Ernst, should mean nothing. Ernst was a hand-picked Koch candidate in 2014. Social Security is on the Koch hit list. We have seen Ernst display her fealty to the NRA in her recent town halls. She has the nearly the same devotion to the Koch brothers.