5 Points On House GOP Bill To Impose Major Cuts On Social Security

UNITED STATES - OCTOBER 8: Rep. Sam Johnson, R-Texas, arrives in the Longworth House Office Building for the House Republicans' election to nominate the next Speaker of the House on Thursday, Oct. 8, 2015. (Photo By ... UNITED STATES - OCTOBER 8: Rep. Sam Johnson, R-Texas, arrives in the Longworth House Office Building for the House Republicans' election to nominate the next Speaker of the House on Thursday, Oct. 8, 2015. (Photo By Bill Clark/CQ Roll Call) (CQ Roll Call via AP Images) MORE LESS
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Social Security advocates were shocked last week when Rep. Sam Johnson (R-TX) (pictured), the chair of the House subcommittee on Social Security, introduced a bill to little fanfare that would impose major cuts to the popular retirement insurance program.

The benefit reductions in the bill skewed toward middle- and high-income earner, which some policy experts warn could erode the popular support for the program, but almost everyone would face cuts in some shape or form. Notably, GOP leadership hasn’t exactly rallied around Johnson’s bill, and President-elect Donald Trump campaigned on not slashing Social Security. So the political obstacles facing the legislation at the moment appear to be high.

Here are five points on the Johnson’s bill, titled the Social Security Reform Act of 2016:

The proposal is a grab bag of ideas that Republicans have pushed to cut benefits in the past.

Johnson has led Republicans on the Social Security subcommittee for a decade, so it’s not surprising that the bill is made up of a lot of ideas they have supported in the past. It would raise the retirement age and cut the program’s cost of living adjustments so that they rise according to chained CPI, a far less generous metric than the current law’s inflation index. Other cuts come in the form of means-testing requirements, or on limits on what spouses or other auxiliary beneficiaries can receive.

Some provisions appear, at first, to be progressive but aren’t in the context of the full bill.

According to estimations from the Social Security Administration’s chief actuary, about half of Americans would see a rise in the benefits they receive initially receive—known as the Primary Insurance Amount (PIA)—while the other half’s would fall under Johnson’s plan. But almost everybody would see cuts eventually due to the reduced cost of living adjustments.

Some extremely low-income workers would be shielded from these cuts to a degree with the inclusion of a minimum benefits requirement, but that protection is mostly directed at only those who have been in the workforce for the entirety of their working lives.

In a bigger sense, drastically cutting the benefits of those in the middle and at the top of the earning scales stands to destabilize the broad political support that has typically protected Social Security, no matter what benefits lower-income people receive.

“Programs for the poor become poor programs,” said Monique Morrissey, an economist at the left-leaning Economic Policy Institute. “The more a program resembles a safety net program, the more vulnerable it is to cuts.”

The political climate around Social Security has shifted since the GOP’s last push to overhaul the program.

Even some of the ideas that have been supported by Republicans in the past may face fiercer resistance now. For instance, increasing the retirement age — which is already in the midst of being raised — ignores the fact that the life expectancy gains have been fueled by those at the top of income scale. Those in blue-collar occupations or in the working class have seen their life expectancy grow at a slower rate; their jobs are more physically demanding, so those extra two years take more of a toll than it does for white collar workers.

“The political arena has shifted dramatically since a plan like this might have gotten some bipartisan support in Congress,” Morrissey said. “It’s no longer a question of how many centrist Democrats you can get to go along with it. It’s a question of how many mainstream Republicans are going to take the bait.”

Ironically, for a bill that claims to preserve Social Security’s solvency, Johnson’s plan includes a reduction to revenues into the program and it comes in the form a tax cut for beneficiaries at the top of the earning scale. High-earners already benefit from a cap on the payroll taxes they pay into the system before the claim benefits, and under Johnson’s plan, they would see the taxes they pay on Social Security benefits also phased out.

“This comes on top of the fact that wealthy earners already stop paying Social Security tax early in the year,” said Rebecca Vallas, managing director of the left-leaning Center for American Progress’s Poverty to Prosperity Program.

The timing of the legislation was … interesting.

Introducing the bill a day before Congress was set to leave for good in 2016, Johnson will have to reintroduce it for the legislation to be considered in the new Congress.

“Congressman Johnson’s reform proposal was introduced this month to get the conversation started on Social Security’s insolvency,” said Adrienne Rimmer, a spokeswoman for Johnson, in an email Monday to TPM. She added that she would keep TPM “informed of any plans in the 115th Congress as they occur.”

“He looks forward to hearing productive feedback on his reform proposal and also encourages his colleagues to put pen to paper about their own ideas and solutions to get this program working again,” she said.

The bill’s introduction went almost entirely unnoticed at first, beyond a write-up in the the Washington Examiner, a laudatory press release from the Committee for a Responsible Federal Budget, and an op-ed in Forbes from an AEI scholar who worked in the George W. Bush administration. Multiple outside policy experts told TPM they were caught off guard by the legislation. Much of the attention in Washington has been focused on Republicans’ plans to repeal Obamacare, and whether the GOP will follow up on hints lawmakers will take on a Medicare overhaul as well.

Leadership’s engagement on the issue has been … interesting as well.

Social Security has also not been among the agenda items GOP congressional leaders have indicated will be their priorities next year. The House Ways and Means Committee, the umbrella committee over the Social Security subcommittee, was mum on the bill when dropped it last week, as was the Speaker Paul Ryan’s office.

“This is one of many Republican ideas put forward to strengthen the program, and we appreciate Congressman Johnson’s leadership,” Ryan spokesperson AshLee Strong told TPM in an email Monday.

A spokeswoman for House Ways and Means Chair Kevin Brady (R-TX) also said Brady “appreciates Congressman Johnson’s commitment to having a thoughtful conversation on this issue,” in an emailed statement Monday that added the chairman “sees the proposal as one of many ideas to address the challenges facing Social Security.”

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