A spokesperson for the Economy Policy Institute broke it down for Floricua. “I think these fears shouldn’t be taken lightly.”
House Republicans have clearly signaled that they are planning to force Social Security and Medicare cuts, even threatening, if they don’t get their way, to force the United States into a default on payments it owes, including interest payments on the debt and regular payments such as veterans’ or Social Security benefits. This could be potentially catastrophic not only for individual families, but also for the economy as a whole.
To better understand what is at stake and what it means for families and individuals in Florida, Floricua spoke with Monique Morrissey, an Economist at Economic Policy Institute (EPI), a nonprofit, nonpartisan think tank created in 1986 to include the needs of low and middle-income workers in economic policy discussions.
The Republican controlled House and Senate want to cut spending on Social Security and Medicare. How do they plan to go about it
The primary way that you cut benefits, or that they plan to cut benefits for Social Security, is by raising the retirement age. And that sounds like, ‘Well, people just have to work a little bit longer to get benefits.’ But really, it’s the exact same thing as cutting benefits across the board. For every year that you raise the retirement age, it’s about a 6.7% cut in benefits.
Sen. Rick Scott has also talked about “sunsetting” Social Security. What does that mean?
Sunsetting means that it would require Congress to either approve Social Security every year or every five years. Rick Scott has said [to do it] every five years. It [would] give Republicans who are anti-government a chance to force Democrats to agree to things that are deeply unpopular, in order to keep programs running that people expect to be running. That would be colossally damaging.
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And what would these cuts mean for the average Floridian?
The full retirement age is already going up to 67. Republicans are proposing to raise it to 70 or to raise the Medicare eligibility age to 67. A lot of people think that they’re going to work until 65, 66, or 67. But we know that’s not in people’s control. A lot of people have health problems or lose their jobs and can’t get another one. This especially happened during the Covid pandemic. About 80% of the jobs that are still lost are among people aged 55 and older. So, it’s just not realistic to expect most people to work to 67 or let alone work into their seventies. Many people [could] find themselves without money and without health care.
Will benefits be cut for current retirees?
It’s unclear whether Republicans would actually cut benefits for current retirees. But they haven’t ruled it out and sometimes they typically will say that in the past they’ve protected current retirees, and this is something that’s just going to affect future retirees. But that depends. For example, there have been plans to cut the Cost of Living Adjustment (COLA), and that would affect current retirees. So it’s not clear that current retirees in Florida would be immune to the cuts that the majority of Republicans have supported.
Critics of Sen. Marco Rubio’s Providing for Life Act say it forces parents to choose between the paid leave they need to care for new babies, and their future Social Security benefits. How would that work?
The United States is one of only six countries in the entire world that doesn’t have any requirement for paid leave. So, Republicans are forced to come up with a plan for paid family leave or paid medical leave. What Senator Rubio has proposed is that you can borrow from your own Social Security. It’s a way of cutting Social Security benefits on the back side, and not expanding social insurance, but still pretending to have a plan that nobody in their right mind would accept for paid leave, which is just a big problem, especially during the pandemic.
They also want to repeal the Inflation Reduction Act (IRA), which would lower the cost of prescription drugs. What do you say to that?
Insulin is one of the drugs that Medicare could negotiate under the Inflation Reduction Act, which allows Medicare to negotiate on certain drugs and lower the prices, which is very critical for retirees in Florida. But there are other provisions in it that also limit, for example, how much people pay totally for drugs under Medicare, [among] other things. So, it’s hugely important to people who have chronic conditions that are expensive to treat, in particular diabetes, or when the medication is expensive, and you have to take it year-round.
Can you contrast the Republicans’ plan to cut Social Security with the Democrats?
The Democrats have a plan that the majority of the Democratic Caucus supports. It’s called the Social Security 2100 Act. It puts [the program] in long-term and short-term balance, and improves benefits for all workers, but in particular for certain low-income workers.
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How would the Democrats’ plan work?
Essentially, it would narrow, or initially it would eliminate, the funding gap this time, and it would increase benefits and it would do that in the current version in part by raising taxes on very high earners who currently are not paying taxes on earnings above $147,000. It raises revenues, it increases benefits across the board for everybody. It also has some targeted benefit increases for people like caregivers who often have to leave the labor market or leave the workforce in order to raise kids. So basically, if you’re a low-income person who has had to take time off to raise children, it bumps up your benefits. Typically, these plans also improve the Cost-of-Living Adjustment (COLA), making it a little bit higher potentially. At least 200 Democrats in the House have supported the Social Security 2100 Act. That includes Rep. Val Demings and Rep. Charlie Crist.
Why haven’t these plans that benefit working families been enacted?
Because they have not gotten a single bipartisan or Republican support. The number one reason that the Republicans want to cut benefits is so that they don’t have to raise taxes on wealthy people.
Sen. Minority Leader Lauren Book told Floricua that Republicans are using “culture wars” to distract people from issues that really impact them negatively.
These days Republicans have largely focused on cultural issues: guns, abortion, race, crime, and they’ve stayed away from the economy, aside from trying to blame Democrats for inflation. We know that inflation is the same all around the world. They’re also trying to defund the I.R.S. What that means is you’re going to have rich people who are just illegally going to pay a lot less taxes and you’re going to pay a lot more. I think that there’s an element of thinking that voters are not paying attention and that they won’t believe that [Republicans] will actually do this. But after what we’ve seen with abortion rights, I think it’s foolish to expect that the Republicans are not serious about doing what they say they’re going to do.
I work for an organization that’s nonpartisan, but I do think that we should take seriously what the Republicans have publicly said that they will do to Social Security and Medicare if they take control of the government. I don’t think that these fears should be taken lightly.