Millions of Americans may have an experience like this in the future. Only it will be with something far more important. The shrunken candy bar will be their Social Security check. Benefits will be far smaller than expected if Social Security is "reformed." The change would come through a bill submitted by Rep. Sam Johnson, R-Plano.Don't be fooled, folks. If a Republican is crafting the bill, especially when it's a hard right Republican, the reality is you (we) are going to be the biggest losers in the deal. Current retirees and soon to be retirees will not be affected by this new scheme. But our adult children and grandchildren will be. And so will our fellow Americans who are under 50 years old.
The particularly nasty part of Sam Johnson’s bill is that taxpayers will continue to pay a high employment tax. But the future retirement benefit will be far smaller than it is today. Which will be very difficult for most retirees. One does not live a wealthy life exclusively on Social Security benefits as they exist today, before any cuts.
Johnson’s plan should be called “learning how to dine on cat food in order to survive.” Or “how to make it through a northern winter without any heat.”
To be clear, folks should understand the full impact of the Texas Republican Party’s abject moral and ethical depravity. For it callously fundraises over social conservative issues such as fetal remains, and equal rights ordinances, masked as bathroom bills. The heartless Texas GOP will also cut off the lights as well as heat/cooling for poor Texans as another form of punishment for being impoverished.
This is huge. The 2016 Trustees Report estimates exhaustion of the trust fund by 2034. Worse, the actuarial deficit over the next 75 years is 2.66 percent of taxable payroll. Since the employment tax is 12.4 percent, that's a huge amount. Measured another way: The unfunded liability amounts to $11.4 trillion. Today.Of course Rep. Johnson prefers to shrink the candy bar. And naturally he is proposing a scam, never mentioning a cut to benefits of any kind.
That $11.4 trillion is not on hand. And that's the candy bar dilemma. The only way to deliver the promised benefits is to increase the tax. The alternative is to shrink the candy bar. That means finding a way to weasel out on promised benefits while continuing to collect the same amount in taxes. Future retirees will pay the same high tax but receive less in benefits.
Cuts to future benefits are not mentioned in the news release. Nor are they mentioned in a supporting document from Johnson's office. In the glorious tradition of misleading language from our elected leaders, Johnson calls for:Fortunately the chief actuary for Social Security busted Rep. Johnson’s snake oil scheme wide open. Below is the author’s summary of the actuary’s findings.
"Modernizing how benefits are calculated." (Code for reducing the benefit-crediting rate for most workers.)
"Gradually updating the full retirement age at which workers can claim benefits." (Code for reducing the benefits for anyone who can't work as long as we say they should work.)
"Ensur(ing) benefits keep up with changes in the economy." (Code for using an inflation measure that reduces the rate of increase in benefits.)
The Social Security Reform Act of 2016 proposes 15 changes. Of those, 10 have impacts under 0.10 percent of funding. Many are considered "negligible." The big bucks are in three proposals. One works to change the benefit formula. Another advances the full retirement age. The third changes the method for calculating inflation. Those changes would cut benefits by 2.94 percent of payroll over the next 75 years.It is up to us to stay vigilant to all that this Ebenezer Scrooge Republican Congress has in store for us. The GOP must hope its narcissistic demagogue of a President will keep the media and the public busy and distracted by his erratic behavior and tweet storms. This will give Paul Ryan and his Scrooge party the opportunity to gut most of which many of us depend and expect behind closed doors. This means affordable healthcare, women’s reproductive rights, voting rights, social insurance programs (Social Security and Medicare) will all go on the GOP chopping block.
The changes would have no immediate effect. But they would start to bite for workers retiring in 2030 or later. That means workers who are 50 or younger. So, if you're already retired, you're safe. But your adult children and grandchildren will see their benefits reduced. Meanwhile, they still pay employment taxes that support current retirees.
Future retiree benefit cuts depend on their level of lifetime earnings. Here are examples for medium- and higher-wage workers retiring in 2030. (Low-wage workers are affected in another way, which I will cover next week.)
A medium-wage worker with a 44-year record (one with about $49,000 wages in 2016) will start retirement with an 11.4 percent benefit cut. The cut will increase to 18.8 percent by age 95.
A high-wage worker with a 44-year record (about $78,600 for 2016) will start retirement with a 19.9 percent benefit cut. It will increase to a 26.6 percent cut by age 95.
A top-wage worker with a 44-year record (one earning $118,500 in 2016) will start retirement with a 25.2 percent cut. It will increase to a 65.4 percent cut by age 95.
Benefit cuts increase each year after 2030. A 33-year-old medium-wage worker today would experience a benefit cut of 33.2 percent when retiring in 2050. That cut would increase to 34.1 percent by the time they reached 95.
The stakes couldn’t be higher.
After what happened to the Democrats when the Tea Party formed in 2010, it is highly unlikely the Republicans will hold town hall meetings any time soon. Most know that many of us are very unhappy and some are downright outraged over this election’s outcome.
I’ve made sure my two US Senators and US Representative (TX-R’s) understand that over half of us are not happy with the outcome of the 2016 election. Clinton won the popular vote by 3 million. Apparently, I reminded all three, gerrymandering and voter suppression efforts are no longer enough for Republicans to win Presidential elections anyone. Rogue FBI and Russian hackers are necessary now. What does it feel like to belong to a Party that needs Russian hackers to win, I tweeted to them.
I also remind my “representatives” that the GOP has no mandate whatsoever. I know the Party’s tendency to overreach each time it wins, even if the wins are questionable squeakers or stolen.
If we can’t express our views at town hall meetings we can certainly use social media, frequent phone calls and hold local protest rallies at district offices to let our reps know that we will not quietly go away, sit down, shut up and get over it.
Let your representatives know who you are. Make ‘em wish you were never born.
Organize with local Dems through Daily Kos and/or your local Democratic Party.