Retirees should say ‘no thanks’ to Romney’s Social Security plan

The last thing America’s retirees need is Sen. Mitt Romney’s (R-Utah) hands on their future Social Security benefits. Yet that is precisely what may happen if a piece of draft legislation by the Utah senator isn’t relegated to the dust bin of history — and fast. Romney’s proposed TRUST act aims to establish “rescue committees” for federal trust funds, including Social Security. These committees would operate outside of regular order and their recommendations would be fast-tracked to the Senate floor. 

“If you ever want to see a balanced budget, if you ever want to get out of debt, you have to deal with these trust funds,” Romney told CNBC. It’s a common conservative ploy — to conflate seniors’ earned benefits with the issue of debt — even though Social Security is self-funded and does not contribute a penny to federal red ink. 

If history is a guide, retirees should not trust Romney with their Social Security benefits. During his 2012 presidential campaign, Romney and his running mate, Paul Ryan, advocated raising the retirement age (which is a benefit cut), lower cost-of-living adjustments (COLAs), and the creation of private Social Security accounts. The senator is clearly in the “entitlement reform” camp that purports to want to “save” Social Security by cutting it, implying that benefit reductions for seniors living on fixed incomes are somehow inevitable.

When Republicans were still in charge of the House, the House Social Security Subcommittee Chair, Rep. Sam Johnson (R-Tex.), introduced a bill that made plain what conservatives would do if they could. The GOP legislation sought to cut Social Security benefits by 33 percent. It would have raised the retirement age to 69, adopted a stingier formula for calculating COLAs (the Chained CPI), and slashed benefits for spouses and children. Fortunately, the bill went nowhere.

Having failed to enact “entitlement reform” through the normal legislative process, Romney and his conservative allies now seek to hide behind an appointed committee. In fact, Romney told a reporter that he “determined it would make more sense for (him) to try to devise a procedural proposal than to try to propose solutions for the funding issues (himself).” In other words, the TRUST Act is designed to give conservatives political cover to cut benefits. 

There is no question that Congress must address the projected shortfall in the Social Security Trust fund in 2035 (after which the program still could pay 80 percent of benefits). The fallacy is that the only way to ensure solvency is through a combination of benefit cuts and revenue measures. But a major piece of legislation working its way through the House Ways and Means Committee would keep Social Security financially sound until the end of this century without benefit cuts. 

Introduced by Rep. John Larson (D-Conn.), the Social Security 2100 Act adjusts the payroll wage cap so that the wealthy begin paying their fair share into the program, along with a modest 1.2 percent payroll tax increase phased in over 24 years — the equivalent, says Rep. Larson, of one coffee drink every 9 weeks for the average wage earner. The bill also includes a 2 percent across the board increase in benefits and a more accurate inflation formula for calculating cost-of-living adjustments. 

Perhaps it’s no coincidence that Romney unveiled his bill at the same time the Social Security 2100 Act is garnering attention on Capitol Hill. The TRUST Act is an ill-advised alternative which addresses only one side of the equation — the solvency issue — without ensuring that future retirees will have enough income to keep their heads above water. 

The average monthly Social Security retirement benefit of $1,461 — or roughly $17,500 per year — is already modest for seniors facing ever-rising living costs. The 2020 cost-of-living adjustment of 1.6 percent amounts to only $24 more per month for the average retiree. 

Even with Social Security, some 8 percent of America’s seniors under 70 years of age live in poverty. With retirement savings dwindling and pensions disappearing, future beneficiaries will need every dollar they’ve earned in Social Security benefits. Rep. Larson takes reasonable steps to boost these benefits while ensuring the program’s financial viability. Romney’s proposal does not. For today and tomorrow’s retirees, the choice could not be clearer. 

Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare, a membership organization that promotes the financial security, health and well being of current and future generations of maturing Americans. He also chairs the board of the National Committee’s Political Action Committee, a PAC that endorses candidates for federal office.