Republican Study Committee, Social Security and Medicare

Published in RINewsToday on July 3, 2023

Last month, the Republican Study Committee (RSC) unveiled its 167-page FY 2024 “Protecting America’s Economic Security” budget proposal which calls for balancing the federal budget in seven years, slashes $16.3 trillion in wasteful government spending over ten years, and cuts $5.1 trillion in taxes. During the 118^th Congress (2023 to 2024), 175 House Republican lawmakers from 38 states are RSC members. With over 70 percent of the House Republicans belonging to the RSC, the release of the proposed budget is a dependable indicator of where the chamber’s caucus stands on key legislative priorities.

The RSC annually releases its own budget proposal for the next fiscal year during the time when both House and Senate Budget Committees prepare official budget resolutions. The fiscal blueprint provides the House Republican Caucus with an opportunity to detail its wish list of spending priorities and also provides its position on social issues.

RSC’s FY 2024 budget, released on June 14, 2023, is made up of 220 individual legislative proposals and initiatives received from its members. Reflecting GOP values, the proposed budget would eliminate most funding for new abortion policies, Critical Race Theory, and “gender politics” initiatives, while ensuring adequate funding for the military, continued construction of a Southern border wall; rolling back “climate change” programs, and eliminating increases in funding for the IRS. It would also make 2017 tax cuts permanent as its provisions are starting to expire soon, and ensuring the nation’s energy independence; providing tax benefits to promote R&D: restricting free meals for students, and the Supplemental Nutrition Assistance Program, with the possibility of work/volunteer requirements.

Aging groups are concerned that the RSC budget also takes aim at Social Security and Medicare programs. During 2023, the annual Social Security trust fund report warned that the program will only be able to continue paying out full benefits through 2034. The Medicare trust fund also reported that it could run low on funds by 2028, two years later than reported last year. While the Democratic platform seeks to raise caps on some programs to address this, the RSC’s budget proposal floated additional policies to financially fix these programs.

The RSC budget proposes “modest changes” to benefits for those who are not near full retirement age. For future retirees, it calls for raising the full retirement age (taking into account for increases in life expectancy) from age 67 to age 69 for those who turn 63 in 2033. It would also reduce benefits for future beneficiaries who earned a “higher salary” before retirement. Also, only “modest adjustments” to the Social Security program as it operates would be made but it doesn’t clarify the changes.

As to Medicare, the RSC budget calls for requiring disabled people to wait longer before they can receive Medicare benefits. It pushes for turning Medicare into a “premium support system,” where seniors would receive a subsidy to be used to purchase private health plans competing against traditional Medicare.

Point/Counter Point

With the release of RSC’s budget, House lawmakers, the White House, and aging groups quickly issued statements touting their own positions.

RSC’s Chairman Kevin Hern (R-Ok) noted the GOP’s conservative values could be found on every page of the budget blueprint. “Our budget proves that fiscal responsibility is the only way to lower inflation, grow the economy, cut federal spending, empower taxpayers, and protect small businesses. Congress controls the purse strings, but we, the House, has failed to produce a budget year after year after year. Everyone has to balance their budget – governors, mayors, businesses, families – but not Congress. Nearly every problem facing our government can be traced back to our failure to both pass a budget and stick to it. The Republican Study Committee has a budget, and it balances in just seven years. Our budget is real, and it’s floor-ready. It’s time to get our country back on track,” he said.

“For too long, irresponsible spending habits in Washington have made the cost-of-living more expensive for hardworking American families, and they are fed up with business-as-usual. The RSC budget prioritizes smart, common-sense policy to empower the American worker, and it cuts back on wasteful spending to pay for what’s important – just like families have to do every day. We are committed to protecting our country’s economic security and restoring fiscal sanity to our Nation’s finances,” says RSC Budget and Spending Task Force Ben Cline (R-VA).

On the other hand, Pennsylvania Congressman Brendan F. Boyle, Ranking Member of the House Budget Committee, gives the RSC the thumbs down: “This budget stands in stark contrast to the positive, hopeful vision put forward by President Biden and supported by House Democrats: a government that works for working families, an economy where the ultra-rich pay their fair share, and a country where everyone has the freedom to retire with dignity. I look forward to working with President Biden and Congressional Democrats to ensure House Republicans’ bleak vision for America does not become our reality.”

Social Security and Medicare

Social Security advocacy groups warn that the programs proposed by the RSC would slash the nation’s safety net programs, like Social Security and Medicare.

“This budget would destroy Social Security as we know it. It would raise the retirement age and slash middle class benefits. These changes would transform Social Security from an earned insurance benefit, which replaces wages lost in old age, disability, or death, into a subsistence-level welfare benefit,” warns Nancy Altman, President of Social Security Works.

“The budget fearmongers about Social Security’s modest shortfall (still a decade away) rules out any options for raising revenue, such as requiring billionaires to contribute more. That leaves benefit cuts as the only “solution.” In other words, they want to cut benefits now to avoid cutting them later, which isn’t a solution at all. Indeed, the budget will increase the number of workers who will have no ability to retire while maintaining their standard of living,” says Altman.

“A particularly cruel provision would force disability beneficiaries to wait five long years (instead of the current two, which is already too long) before becoming eligible for Medicare benefits. Outrageously, this change would deprive some of the most medically vulnerable people in America of health care. This provision alone would inevitably lead to more medical bankruptcies and increased homelessness,” notes Altman.

Correcting misinformation on Social Security and Medicare

The Washington, DC-based National Committee to Preserve Social Security and Medicare is launching a new public education campaign — sponsored by AARP — to correct misinformation about Social Security and emphasize the program’s value to American workers, especially to communities of color. The campaign, “Social Security: Here Today, Here Tomorrow,” is intended to debunk myths and give workers the facts about their vital earned benefits. The campaign includes a series of public town halls across the U.S. between June and October, 2023, featuring prominent Social Security experts and advocates, Social Security officials, and financial advisors.

Max Richtman, President and CEO of the National Committee to Protected Social Security and Medicare says, “There is a ‘doom and gloom’ narrative about Social Security today. ‘The program is going bankrupt.’ ‘It won’t be there for future generations.’ ‘Politicians are stealing from Social Security.’ None of that is true. We want the public to understand that Social Security is there for them today — and it will be there for them tomorrow. And not just in retirement, but in case of disability, the death of a family breadwinner, or the retirement of a spouse. That’s what this campaign is all about.” Richtman will moderate some of the upcoming town halls.

“Social Security is a financial lifeline to millions of American seniors, but it is especially crucial to the Black community. Black Americans traditionally rely on Social Security for monthly income more than other groups do, due to wage and job discrimination, diminishing employer-provided pensions, and challenges in saving for retirement. “Like all Americans, the Black community pays into Social Security with every paycheck — and deserves to know that the government will keep its promise to provide baseline financial security when they encounter what President Franklin Roosevelt called ‘the hazards and vicissitudes’ of life,” says Richtman.

Here is a schedule of the town halls. Admission is free. Reservations are required.

Philadelphia, PA, July 26, 2023 at Center In The Park

Lansing, MI, August 28, 2023 at AARP Michigan Office (To be televised later on WLAJ-TV/ABC)

Milwaukee, WI, September, 2023 (date & location TBA)

Las Vegas, NV, October, 2023 (date & location TBA)

Visit www.socialsecurityheretoday.org for registration information. Those unable to attend the free town halls in person will be able to watch live video streams.

Here is the text for the RSC’s FY 2024 Budget, Protecting America’s Economic Security: https://hern.house.govPuploadedfiles/202306141135_fy24_rsc_budget_print_final_c.pdf

House GOP leadership is committed to holding a vote to approve the RSC budget this year. With a razor thin majority in the House and with Democrats stringing opposing, the RSC budget is unlikely to pass the lower chamber.

In an interview with House Speaker Kevin McCarthy that aired Sunday, Jan. 29, 2023, on “Face the Nation,” McCarthy stated, “Medicare and Medicaid slashes are off the table.” But with three fourths of the House GOP caucus endorsing the RSC budget, making cuts to Social Security and Medicare, older voters must make it clear to their House lawmaker, “Don’t touch Social Security and Medicare.”

Trustee reports: Social Security and Medicare still face financial woes

Published in RINewsToday on April 10, 2023

Over a week ago, the Trustees of the Social Security and Medicare trust funds released their annual reports on the financial health of these two programs. As in prior years, the trustees found that the Social Security and Medicare programs both continue to face significant financing issues.

The latest Social Security projections show the program is quickly heading toward insolvency and calls for Congress to find policy solutions sooner rather than later to prevent abrupt changes to tax or benefit levels. The Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM) and other aging advocates are urging Congress to take prompt action to strengthen and expand Social Security, while Republicans have been calling for cuts to future retirees’ benefits and at least partly privatizing the program.

This 270- page 2023 Social Security Trustees Report warns that if Congress does not act, Social Security’s Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds, which help support payouts for the elderly, survivors and disabled, will become depleted in 2033 (that’s a year earlier than forecast last year), becoming totally insolvent in 2034 when beneficiaries would only receive about 80% of their scheduled benefits.

According to the Social Security Administration (SSA), roughly 66 million people received monthly Social Security checks in 2022 (175,840 in Rhode Island). A vast majority, or about 57 million of those beneficiaries, received benefits through the OASI Trust Fund, compared to nearly 9 million people who received benefits through the DI Trust Fund.

The trustees say that Social Security funds would be fully depleted in 2034 because of expectations of a slowed economy and reduce labor productivity, considering inflation and economic input.

Although the DI Trust Fund asset reserves are not projected to become depleted during the 75-year projection period, being able to pay full benefits through 2097, the combined Social Security funds would only be able to pay 80% of the scheduled benefits after 2034, says the trustees report.

Taking a look at Medicare’s fiscal health

Medicare, the hospital insurance trust fund referred to as Medicare Part A, will only be able to pay scheduled benefits in full until 2031, according to the 273-page trustees’ annual report. The program covered 65 million seniors and people with disabilities in 2022, and will only be able to cover89% of total scheduledbenefits at that time.

Although the Medicare Part A Hospital Insurance trust fund will become insolvent in just eight years, Medicare spending as a whole (including Parts A, B, D, and Medicare Advantage, will continue to grow over the coming years.

The Medicare Trustees project a shortfall of 0.62 percent of payroll, or 0.3 percent of Gross Domestic Product (GDP), noting that it would take about a 21 percent (0.6 percentage point) increase in the payroll tax rate or a 13 percent spending cut to restore the program’s solvency.

The improvement of Medicare’s hospital trust fund’s finances over last year’s projections can be tied to lower estimates for health care spending after the height of the Covid-19 pandemic along with more projected income that the trustees estimate coming from a larger number of covered.

Dueling political statements

With the Social Security and Medicare Trust Fund reports released on March 31, 2023, the Chair and Ranking Members of the House Ways and Means (HWM) were quick to issue dueling statements to give their political spins. HMW’s Subcommittee on Social Security has jurisdiction on bills and matters related to the Social Security Act.

House Ways and Means Chairman Jason Smith (R-Missouri) charged that reckless Democratic spending has impacted the financial viability of the Social Security and Medicare Programs. “Thanks to President Biden’s economic failures, seniors’ hard-earned benefits are further under threat. Social Security’s combined trust funds are expected to become insolvent a full year sooner than forecast in the previous report as a result of a slowed economy and Democrats’ inflation continuing to outpace wage growth. And Medicare’s latest report comes amidst Biden’s plans to slash seniors’ access to innovative new cures and treatments,” says Smith, stressing that “the first step to protecting these programs is “growing the economy – not budget gimmicks or tax increases that hold back economic growth.

On the other hand, House Ways and Means Committee Ranking Member Richard E. Neal (D-MA) counters Smith’s political perspective. “While Democrats are committed to the long-term health of these programs, Republicans are launching another shameful assault on the economic well-being of millions of workers and retirees with their plan to make drastic cuts to Social Security and Medicare, warns Neal. “Their playbook is clear: slashing a critical resource that Americans have rightfully earned to give another tax cut to the top 1%. Democrats won’t let their reckless attacks stand, and we will continue to defend and protect Social Security and Medicare for generations to come.”

Rhode Island Congressmen were quick to give their comments about the release of the two trustee reports, too. “Unlike the nearly three-quarters of House Republicans who endorsed slashing Social Security in 2022 – reducing benefits by $729 billion over 10 years – House Democrats are working to protect Social Security for generations to come,” says Congressman David N. Cicilline, representing Congressional District 1. Cicilline, who is retiring his seat on May 31, 2023, has pushed to expand and strengthen Social Security over his six-terms in office.

Cicilline asks: “Sixty-six million Americans rely on this essential program to make ends meet and we cannot allow Republicans to make any cuts to this hard-earned benefit. The drug spending savings implemented by our Inflation Reduction Act will not only keep money in seniors’ pockets but will also drive down costs to Medicare itself. We’ve been taking real action to strengthen these programs and help our seniors – what have Republicans done?”

As Rhode Island’s newly elected Congressman, Seth Magaziner says he will “fight tooth and nail to protect Rhode Islander’s hard-won Social Security benefits.” In responding to the trustee’s report about Social Security’s financial woes, Magaziner called for raising the cap on Social Security taxes, forcing “millionaires and billionaires to pay the same rate as teachers and fire fighters.”

“I stand ready to work with anyone who is serious about strengthening Social Security, not cutting hard-earned benefits,” says Magaziner.

While there are few fixes being proposed by either party or leader, some fixes identified by the Program for Public Consultation at the University of Maryland that “Americans might be willing to support” include:

– raising the Social Security payroll tax cap

– reducing benefits for high earners

– gradually raising the retirement age

– increasing the payroll tax

– raising the minimum benefit

– changing cost-of-living adjustment calculations

– increasing benefits for beneficiaries over age 80

Social Security advocacy group gives its two cents

“Contrary to conservative claims, Social Security is not ‘going bankrupt’; the program will always be able to pay benefits because of ongoing contributions from workers and employers. In fact, this is yet another Trustees report showing that Social Security remains strong in the face of turmoil in the rest of the economy,” says Max Richtman, NCPSSM’s President and CEO in a release on the Social Security Trustee Report. He notes that the program’s insolvency date has stayed roughly the same even after a global pandemic and recent economic upheavals.

Congress can strengthen Social Security by bringing in additional revenues into the program, says Richtman. NCPSSM endorses legislation introduced by Senator Bernie Sanders (D-Vermont) and Congressman John Larson (D-Connecticut) to keep the trust fund solvent for the rest of this century while expanding program benefits. Both bills would adjust the Social Security payroll wage cap so that higher-income earners begin contributing their fair share, he notes.

As to Medicare, in a release Richtman called on Congress to take “pre-emptive action now” to protect the Medicare Part A trust fund from becoming depleted in 2031, three years later than estimated in their previous report, at which time Medicare could still pay 89% of benefits.

“Beyond trust fund solvency, the Trustees reported that the standard Medicare Part B premium will rise next year to $174.80 per month – a $10 or six percent monthly increase,” says Richtman. “Any increase is a burden to seniors living on fixed incomes, who too often must choose between paying monthly bills or filling prescriptions and getting proper health care. Seniors need relief from rising premiums and skyrocketing out-of-pocket health care costs,” he said.

“We support President Biden’s plan to strengthen Medicare’s finances, as laid out in his FY 2024 budget. His plan would bring more revenue into the program, rather than cutting benefits as some Republicans have proposed. Building on the prescription drug pricing reforms in the Inflation Reduction Act, the President’s budget proposal would lower Medicare’s prescription drug costs — and some of those savings would be used to extend the solvency of the Part A trust fund,” said Richtman.

For a copy of the 2023 Social Security Trustee Report, go to https://www.ssa.gov/OACT/TR/2023/.

For a copy of 2023 Medicare Trustee Report, go to https://www.cms.gov/oact/tr/2023.

Dueling Social Security Proposals Heard by Senate Finance Committee

Published in RINewsToday on March 6, 2023

Almost eight years ago, Rhode Island lawmakers reduced the tax burden on older Rhode Islanders by tweaking the state’s tax on Social Security in the fiscal year 2016 budget. The exemption to Social Security taxation as it currently stands in statute was put in place in 2015, as part of the FY 2016 budget.

According to Greg Pare, Rhode Island’s Senate Director of Communications, the Assembly expanded a budget proposal by then Governor Gina Raimondo to make Social Security benefits exempt from state taxes for many. “The original proposal would have made them exempt for single filers with federal adjusted gross incomes of up to $50,000 and joint filers up to $60,000,” noted Pare, but lawmakers raised the limit to $80,000 for single and $100,000 for joint filers.

During this current legislative session – 2023 – there are two legislative proposals that, if passed, would decrease the state taxes on Social Security income for up to 175,840 retirees.

Helping Social Security retirees

During the current legislative session, Senator Elaine Morgan (R-Dist. 34, Charleston, Exeter, Hopkinton, Richmond, West Greenwich) introduced SB 84 to completely eliminate the state tax on Social Security income in Rhode Island. The bipartisan legislative proposal specifies for tax years beginning on or after January 1, 2024, an individual may subtract from federal adjusted gross income all Social Security income.

Morgan’s SB 84 has attracted the support of GOP Senate colleagues, along with Democratic Senators on the other side of the aisle. The senior-friendly, bipartisan legislative proposal sponsors are: Sens. Anthony Phillip Deluca (R-Dist. 29, Warwick), Minority Leader Jessica de la Cruz (R-Dist. 23, Burrillville, Glocester, North Smithfield), Gordon Rogers (R-Dist. 21, Coventry, Foster, Scituate, West Greenwich), Thomas Paolino (R-Dist. 17, Lincoln, North Providence, North Smithfield), Leonidas P. Raptakis (D-Dist. 33, Coventry, West Greenwich), John Burke (D-Dist. 9, West Warwick), Mark McKenny (D-Dist. 30, Warwick), Frank Lombardi (D-Dist. 26, Cranston) and Frank Ciccone, III (D- Dist. 7, Providence, Johnston).

“Eliminating state income tax on Social Security benefits will be akin to giving Rhode Island retirees a raise. We must make Rhode Island a better place for retirees and not taxing Social Security income is a large step in that direction. It will help stem the flow of retirees leaving Rhode Island and taking their spending power with them.” says Morgan who made an argument in support of the legislation at the Senate Finance Committee last week, when it was scheduled for consideration, and held for further study. A fiscal note has been requested, but has not been released.

Time to give older Rhode Islanders tax relief

“Eliminating the tax on Social Security benefits at the state level for seniors who have worked for decades, paying taxes on their hard-earned income, and contributing to Social Security with post-tax dollars, would boost the retirement income for much of Rhode Island’s vulnerable elderly population,” reasoned Morgan. “Social Security is part of the social safety net. It was never meant to fill state coffers; it was meant to carry people throughout their retirement years. It’s time to give our growing older population some tax relief by eliminating the income threshold, beginning with the 2024 tax year,” she said, noting that her legislation will help ensure that even more middle-class retirees and their families can keep more of their hard-earned benefits.

Sen. Walter Felag’s (D-Dist. 10, Bristol, Tiverton, Warren) legislative proposal, SB 246, cosponsored by Sens. Lou DiPalma (D-Dist. 12, Little Compton, Middletown, Newport, Tiverton), Frank Lombardi (D-Dist. 26, Cranston), V. Susan Sosnowski, (D-Dist. 37, South Kingston) and Frank Ciccone, III (D-Dist. 7, Providence, Johnston), was also heard at the Senate Finance Committee, along with Morgan’s Social Security legislation. This legislative proposal would not eliminate the state’s Social Security tax but increase income thresholds to $110,000 for single, and $140,000 for joint, filers. Like Morgan’s legislative proposal, the Committee recommended that Felag’s measure be held for further study. No fiscal note has been released yet on this legislative proposal.

With the cost of goods and necessary services increasing, Felag says that it was crucial to help Social Security beneficiaries by throwing SB 248 into the legislative hopper. “By raising the tax exemption level, we can lessen the financial stress that many retirees on Social Security feel on a daily basis, keeping more of their hard-earned money in their pockets and bank accounts,” he says.

Sen. DiPalma, who serves as Chairman of the Senate Finance Committee, reported that a couple of proposals have been submitted and heard in the Senate Finance Committee. “Both sponsors and witnesses made the case for why we need to continue to assist our seniors, especially during these inflationary and soon to be “slow-cessionary” periods. These proposals must and will be evaluated in the context of the overall budgetary review process, which is currently ongoing,” he says.

When asked if she ever considered becoming a cosponsor of Felag’s legislative proposal, Minority Leader Jessica de la Cruz stated, “I would have loved to, but I was unaware of his bill.”

“It’s not too late to bring Democratic and Republican Senators together to hammer out a compromise legislative proposal,” says de la Cruz, noting she will be discussing this possibility with Senate President Dominick Ruggerio (D-Dist.4, North Providence, Providence).

Although I do not see eye to eye with my Democratic colleagues 100% of the time, we find common ground on many other issues,” says de la Cruz. ” I believe there would be bipartisan support for crafting a compromise piece of legislation if it ensured tax relief to retirees on Social Security.

Calls for passage of Social Security proposals

AARP State Director Catherine Taylor, representing over 128,000 members in Rhode Island, called for passage of SB 84 and SB 246. “They would protect the Social Security benefits of older Rhode Islanders,” helping them keep the benefits they have earned over a lifetime of hard work,” she said.

“Assuring that our members are financially secure in retirement is a key component of our advocacy,” stated Taylor, noting that Rhode Island is one of only 11 states that still tax hard-earned Social Security benefits. “State taxes on Social Security benefits in Rhode Island undermines the purpose of Social Security, which was designed to lift seniors out of poverty- not to fund state government,” she says.

“Now, when so many Americans are struggling to afford health care and other basic needs, the promise of Social Security is even more important,” adds Taylor.

“Whether it is raising the income threshold under existing law, or a complete exemption of Social Security benefits from taxation, like 30 other states around the country, AARP supports all efforts to keep hard-earned money in the pockets of older Rhode Islanders,” Taylor told Senate Finance Committee members.

A Call to Action

According to the Healthy Aging 2020 report, Rhode Island’s older population is growing dramatically. Today, more than 240,000 Rhode Island residents are age 60 or older - that’s 23% of the population. By 2040 that figure is expected to rise to almost 265,000. In addition, the state has one of the highest proportions of adults aged 85 and older, of any state in the nation, ranking first in New England.

With the expected graying of the Ocean State’s population, now is the time for Rhode Island lawmakers to reduce the financial stress of Rhode Islanders who struggle to pay their bills and want to remain independent at home in the community.

Although both Social Security legislative proposals have been held for further study, don’t get concerned, says Pare, the Senate’s Communication Director. “It is common to hold bills for further study on a first hearing, and that is almost always the case for bills with a fiscal impact, which would have to be incorporated into the budget bill when it is considered later in the legislative session,” he says.

“There is an obvious bi-partisan appetite to provide tax relief to our growing aging population who have been greatly impacted during this pandemic. This is a significant opportunity for Senate Finance Chair Lou DiPalma to craft a compromise bill that will advance Rhode Island as an “age-friendly” state, says Vincent Marzullo, who served 31 years as a career federal civil rights & social justice administrator at the National Service Agency. Now is the time for both sides of the aisle to come together for a needed public action,” he says.

For details about 9 States With No State Income Tax, go to https://www.aarp.org/money/taxes/info-2020/states-without-an-income-tax.html

For details about 4 States That May Cut Taxes on Social Security Income, go to https://www.aarp.org/retirement/social-security/info-2023/cut-taxes-social-security-benefits.html