Republican leaders, echoing the goals of their corporate donors, are planning to cut Social Security.
Republican leaders “have embraced plans to reduce federal spending on Social Security and Medicare, including cutting benefits for some retirees and raising the retirement age for both safety net programs,” according to the New York Times.
“Prominent Republicans are billing the moves as necessary to rein in government spending, which grew under both Republican and Democratic presidents in recent decades and then spiked as the Trump and Biden administrations unleashed trillions of dollars in economic relief during the pandemic.”
But this proposal to cut benefits or privatize the programs comes directly from the old playbook designed under the neoliberal Reagan administration to roll back any New Deal
programs that benefit average Americans dating back to the New Deal under President Franklin Roosevelt.
The most serious attempt to gut and privatize Social Security occurred in 2005 when President George W. Bush decided to push the neoliberal goal that would put trillions of dollars into play for Wall Street investment managers to invest in the volatile stock and bond markets. This would generate billions in fees, expenses, and commissions. most of the hidden or unintelligible to average Americans.
As an example, a 2008 report from the Center for American Progress Action Fund found that an average worker who directed some of their Social Security contributions into “a private account for over 35 years, and retired just after the stock market crash of 2008 — would have lost $26,000 in retirement income, compared to what she would have received by keeping her money in traditional Social Security.”
What most Americans don’t realize is that Social Security is essentially an annuity that generates a specific amount monthly based on the worker’s contributions from their payroll tax during their entire working career. This monthly payment, which depends on the amount of money contributed, is guaranteed by the federal government.
If Social Security was privatized and invested into the stock market, investment returns would vary and would not be guaranteed over the life of the participants. In short, the worker’s monthly income under a privatized Social Security scheme would vary widely over the course of their retirement, just as the market and the macroeconomy ebb and tides with no warnings.
Social Security is a Huge Prize for Wall Street
Naturally, the Republicans have been evasive about the specifics because the idea is wildly unpopular with voters, even conservative Republicans who claim they hate the federal government, yet insist on taking every penny they receive in Social Security, Medicare, veteran, and Medicaid benefits.
Cutting Social Security and Medicare, which Republicans and the media mistakenly insist are “entitlements,” will also require extensive negotiations through House and Senate finance committees.
The problem with the Republican claim that there is a problem with Social Security is an intentionally misleading argument. In reality, most experts agree that “the fact is that Social Security is adequately funded for 30 years and that its long-term financing problem can be solved by reforms that entail no serious modification of the basic structure of the program and no payroll tax increases,” according to the Brooking Institution.
In response, as this video with President Obama shows, the Democrats have continuously worked to protect Social Security from Republican attacks.
Doing the Bidding of Drug and Health Care Companies
Reducing or privatizing Medicare and Social Security are part of the Republicans’ larger plans to eliminate or cut back health insurance and drug cost reduction enacted by the Biden administration. In an October 2022 critique of the Republican’s economic plan, the White House detailed a few areas Republicans would target that would increase health care and drug costs for average working Americans.
As an example, Rep. Kevin Brady (Ranking Member, Ways, and Means Committee) said that “because those drug provisions are so dangerous… I would imagine [repealing the Inflation Reduction Act’s prescription drug policies passed by the Biden administration] will be a top priority for Republicans in the new session.”
So, it is not surprising that Republicans want to obfuscate their plans to privatize or reduce Social Security.
Republicans have an agenda, but it only benefits their top corporate and most wealthy contributors. average Americans have no role in it since they know “trickle-down” economic plans are a fantasy.
So, if Republicans get control of Congress, average Americans who are deceived into thinking that Republicans care about their financial and social interests will get what they deserve: a lower standard of living for decades to come.