Social Security Has Not Been Enhanced in Over 50 Years — Where Battle Lines Stand as Congress Urged To Vote on Cuts

Regardless of their political persuasion, most Americans agree that Social Security should be protected in the face of a looming funding shortfall. That’s not the case in Congress, however. The partisan divide over how to fix Social Security was on full display last week when a group of 116 U.S. House Democrats wrote a letter to Republican House Speaker Mike Johnson urging him to end Congressional commissions they see as a threat to Social Security.

The letter, dated Jan. 11, was posted on the website of U.S. Rep. John Larson (D-Conn.). In the letter, Democrats requested that Johnson exclude the creation of GOP-led fiscal commissions during the legislative process. “The goal of these commissions would be to produce legislation that cuts benefits and calls for an up or down vote without hearings, and that is unamendable,” the letter stated.

In contrast, the letter said, Democratic proposals include legislation that would “extend Social Security’s solvency for another generation while expanding benefits the American people rely on — benefits that haven’t been expanded in more than 50 years.”

The letter went on to say that this is not a simple debate over process. “Without member input and public review, fiscal commissions have historically recommended cutting or privatizing Social Security.”

The commissions Democrats have a problem with have been around a long time and include the following:

• The Greenspan Commission: Democrats refer to this as the basis of the Social Security Amendments of 1983, which they said resulted in a raise in the retirement age that was the equivalent to a 13% benefit cut. This commission also imposed a tax on benefits for middle income retirees and led to the Windfall Elimination Provision that reduces the benefits of nearly 2 million public sector employees who have government pensions.

• The President’s Commission to Strengthen Social Security. This commission was established by President George W. Bush and issued a report outlining three models for partially privatizing Social Security.

• The Bowles-Simpson Commission. This was a 2010 bipartisan budget plan that “recommended raising the retirement age, reducing the cost-of-living adjustment (COLA), and reducing benefit amounts for many earners,” according to the letter sent to Johnson.

There have also been more recent attempts by Congressional groups to propose broad reforms to Social Security. In June 2023, the 176-member House Republican Study Committee approved a fiscal blueprint that would gradually increase the full retirement age to 69 years old for seniors who turn 62 in 2033. The current full retirement age is 66 or 67, depending on your birth year. For all Americans born in 1960 or later, the FRA is 67.

Proponents of raising the full retirement age argue that it’s not technically a “cut” to Social Security benefits, but that’s open to debate. When the FRA is delayed, it effectively reduces the number of years you can receive your full benefits, which means you will receive less money over the course of your retirement. Other lawmakers have proposed more straightforward cuts to Social Security by slashing benefits across the board.

In September 2023, a House Budget Committee resolution proposed a bipartisan debt commission. Critics, including the White House, referred to it as a “death panel” for Social Security and said its primary aim was to cut Social Security benefits.

Last week’s letter to Johnson addressed those concerns. “Given this track record, and the stated intention of the Republican Study Committee, a Commission would have fast-track authority to enact greater cuts to Social Security and other programs vital to the American people.”

Despite the partisan divisions, nearly everyone in the nation’s capital agrees that something must be done to fix Social Security before the program’s Old Age and Survivors Insurance Trust Fund runs out of money. That could happen within the next decade. When it does, Social Security will be solely reliant on payroll taxes for funding — and those taxes only cover about 77% of current benefits.

There are two basic schools of thought on how to address the problem. One is to bolster Social Security by increasing taxes on earnings. Currently, employees must pay 6.2% of their earnings into Social Security and employers must match that figure. Raising the percentage would add more revenue to Social Security.

Another idea is to raise the earnings threshold on Social Security taxes. In 2024, the maximum taxable income is $168,600 a year, up from $160,200 in 2023. Any earnings above that are not subject to Social Security taxes. Some lawmakers and Social Security advocates want to raise the threshold to $250,000 or higher.

The other school of thought is to figure out a way to reduce spending on Social Security, mainly at the administrative level. Few lawmakers have openly advocated cutting benefits from current levels, partly because that’s an extremely unpopular position among voters.

Even some proposals to raise the retirement age, such as the one being floated by 2024 GOP presidential candidate Nikki Haley, would not affect current Social Security beneficiaries or seniors who might soon apply. Haley supports keeping Social Security the same for anyone who’s in their 40s or older.

“We’ll preserve Social Security and Medicare for the next generation,” the former South Carolina governor said. However, she’d limit benefits for the wealthy and is a proponent of raising the retirement age, but “only for younger people who are just entering the system.”