Seeing red over GOP 'Blueprint to Save America' threat to Social Security

Labor contracts set retirement plans and health benefits, but pensions and seniors’ health care are only as strong as unions.

Government’s Social Security is supposed to be for everyone.

For weeks this spring, French people have filled the streets to demonstrate against French President Emmanuel Macron’s proposal to raise the retirement age from 62 to 64.

(In the United States, it was already raised from 65 to 67.)

As unions led the protests, Macron led the effort to raise the retirement age in France (where French workers get guaranteed paid six-week vacations!).

After the November election, when Republicans took a narrow, 222-213 majority of the U.S. House of Representatives, the GOP’s Republican Study Committee issued a plan to hike the retirement age to 70 years old. The 122-page “Blueprint to Save America” describes the idea as “adjusting the retirement age to reflect longevity,” citing accurate data showing people are living longer and the drop in working Americans contributing to the system, but showing too little concern for recipients.

Polls show most French people oppose the change, preferring higher taxes on the super-wealthy and profitable companies to see those segments of society pay their fair share.

Most Americans would agree.

Wouldn’t we?

When Social Security’s retirement age increased from 65 to 67 this year, there seemed to be nary a peep. Regardless whether that was due to less prominent or too vague reporting on the plan; a frustrated public increasingly accepting divided, lousy representation in Washington; coverage overshadowed by other material, or less citizen attention to impartial, timely news stories, losing access to benefits, after paying into the system for decades, may be the final straw.

Social Security Administration officials say in 11 or 12 years the system’s Trust Fund may not be able to pay full benefits to the 66 million-plus retirees who receive benefits.

Raising the retirement age to 70 means people would miss three years of benefits compared to today’s retirees, or opting to claim benefits earlier (which Social Security currently lets retirees do – in exchange for a permanent cut in benefits).

 

Another unstated factor in the GOP calculation is cold: Adding another three years to the retirement age increases the chance people will die before they can claim the benefits they helped underwrite for decades.

 

Of course, boosting the age to claim benefits would lead to hardship, if not poverty, for retirees, disabled workers, and survivors of Social Security recipients, especially for low-income, rural seniors and those who have to stop working due to health issues or to take care of family members.

 

Interestingly, red-state residents would economically suffer more under this Republican plan because American living in states where voters usually elect Republicans tend to have lower life expectancies than people who live in states where residents vote for Democrats. (For example, Alabama and Mississippi have two of the lowest life expectancies in the nation, about 71 years old, according to the Centers for Disease Control and Prevention’s 2022 “National Vital Statistics Reports.” That compares to California, where the life expectancy is about 84.5 years old.

 

Also, raising the retirement age “would really hurt rural areas, which tend to trend older and be lower income, and they tend to be Republican voters,” said Nancy Altman, president of the advocacy group Social Security Works, speaking with CBS News. “This would add to insecurity and it would add to the retirement income crisis.

 

“Most people don't even work to their full retirement age, much less 70,” Altman said. “This would add to insecurity and it would add to the retirement-income crisis.”

 

There are alternatives to cutting access to retirement benefits in order to strengthen the system, whether Paris or Peoria. In the United States, the government can, first, increase the Social Security tax that’s part of Federal Insurance Contributions Act (FICA), now 6.2% paid by workers and 6.2% paid by employers. Next, the government can raise the “cap” on income taxed for Social Security (currently $160,200). Today, a multimillionaire pays no more toward Social Security than a taxpayer earning $160,200.

 

The first idea would affect all workers and employers (and be as politically difficult and unpopular as most tax hikes). But the other would affect just 6% of working Americans, according to a Congressional Reearch Service report from last June.

 

Longer life expectancy shouldn’t be bad news, but elected officials can address forthcoming financial needs better than sacrificing everyday retirees or jettisoning government-backed assistant in favor of 401(k) or other private plans without government guarantees.

 

Raising the retirement age is the wrong approach and should be discarded.

“This is an incredibly serious threat,” Altman said.

 

If this “Blueprint to Save America” gains any traction, U.S. unions must rally the rank and file and surpass the inspiring unrest we saw in France.

News analysis: ‘Doubt ceiling’

Another report of the staredown-shakedown about government paying the bills already approved by Congress could lead to an impulse to ignore or condemn it as more Washington foolishness, corruption or incompetence by Republicans and Democrats alike. But it could have serious economic results to regular Americans – because a few dozen House members (many of whom are also election deniers!) care more about their failed agenda than the condition of the country. They didn’t achieve goals like huge budget cutbacks through the legislative process, so they’re resorting to blackmail.

Arizona Congressman Andy Biggs of Republicans’ Right-wing Freedom Caucus said, “It’s time we fight back against the bloated federal government and eliminate agencies that never should have been established in the first place.”

When the House on April 26 passed its 320-page “Limit, Save, Grow Act,” a debt-ceiling extension with strings attached by just 217-215, its conditions were so onerous that it seemed Republicans like Biggs weren’t merely threatening to force the nation into default. They were PLANNING on it.

Meanwhile, at press time, President Biden was meeting with Congressional leaders, Democrats and Republicans, to seek a way forward, but a compromise doesn’t seem inevitable.

In fact, political observers have suggested:

a short-term fix (still needing 60 Senators to prevent a filibuster) and a few Republican House members (the GOP has a 222-213 majority), delaying spending talks;

a parliamentary maneuver to petition a vote n a debt ceiling alone; and

offering to establish a “fiscal commission” to defer the spending debate.

Expectations are low.

However, the day before the debt-ceiling “summit,” a union filed suit and could present a breakthrough to end the economic hostage crisis.

The National Association of Government Employees labor union on May 8 sued President Joe Biden and Treasury Secretary Janet Yellen to try to stop them from complying with the law that limits the government’s total debt, which the lawsuit contends is unconstitutional

An SEIU affiliate, the NAGE says that if the White House and Yellen recognize the debt limit, and it’s not extended, they must decide which bills to pay and not pay, which violates the constitution’s separation of powers.  The President and Treasury Secretary have no authority to choose which payments to make because the Constitution grants spending power to Congress. Doing so, it contends, would violate the Constitution’s separation of powers.

“Nothing in the Constitution or any judicial decision interpreting the Constitution, allows Congress to leave unchecked discretion to the President to exercise the spending power vested in the legislative branch by canceling, suspending or refusing to carry out spending already approved by Congress.”

Others have noted that the Constitution’s 14^th Amendment says, in part, “The validity of the public debt of the United States, authorized by law, … shall not be questioned.”

 

THE SITUATION

The debt ceiling is a legal limit on how much money the federal government can borrow, so it can’t issue any more bonds, bills or notes. It’s not about future spending, which is addressed when Congress debates the budget.

The nation is about to reach its borrowing limit of $31.381 trillion,  but Republican leaders says they won’t raise the debt limit without extracting $131 billion in cuts to the U.S. budget, and Democrats want a debt-ceiling increase with no conditions, and are currently unwilling to entertain spending cuts.

Yellen said Treasury may be “unable to continue to satisfy all of the government’s obligations by earsly June.”

The restriction has existed since 1917, when Congress wanted to give government flexibility in borrowing instead of tightly holding financial reins. Just before the United States entered World War I, the country needed to raise a lot of money fast, so Congress stopped passing specific revenue measures and instead set a cap on how much money the government could borrow through various means.

Now, Republicans are trying to use their narrow edge in the House as leverage to make massive cuts in programs they oppose. Targeted cuts in their bill include Project Labor Agreements, education’s Pell Grants, Temporary Assistance for Needy Families, Head Start, Medicaid, SNAP food stamps and essentially all “discretionary” spending (outside military spending and Social Security).

Protests have erupted from interest groups across the political spectrum – more than 20 veterans groups, Catholic Charities and the labor movement.

AFL-CIO President Liz Shuler said, “House Speaker McCarthy's default debt-ceiling plan is an affront to working people. The AFL-CIO is strongly urging Congress to reject this plan to careen our nation into default, which would tank the economy and put millions of workers at risk.

“This misguided legislation will also harm our economy by slashing vital federal investments in clean energy and new technologies to expand domestic manufacturing and put millions of people to work,” she added.

 

POTENTIAL CONSEQUENCES

Warren Buffett on May 6 said a default would “disrupt the world’s financial system,” and Moody’s Analytics warns that a default could cause the stock market to drop by one-third, cost up to 6 million jobs, create a jobless rate of 9% and wipe out $15 trillion in household wealth.

If the country’s ‘full faith and credit” becomes suspect, people would see their bank accounts, mortgages and retirement savings jeopardized.

Rep. Jim McGovern (D-Mass.), the ranking Democrat on the House Committee on Rules, said, “This is a ransom note to the American people that makes devastating draconian cuts to programs that help the poor, the hungry, the sick and the vulnerable. Republicans tell us we need tax cuts for billionaires, but when it comes to programs for regular people, it’s cut, cut, cut.

“This is an extortion,” he continued. “You’re saying if we don’t agree to all these draconian cuts, they’re going to hurt people we fight for every day … That’s an all-time high in recklessness and stupidity.”

At best the GOP’s strategy is posturing, but it’s a big risk. At worst, their loss will be paid by the American people.

 

A sampling of other comments –

“What the Republicans are saying in their budget proposal is that, at a time of massive income and wealth inequality, when the richest people are becoming much richer, while working-class people are struggling, what they want to do is to cut programs for nutrition, for education, for healthcare. The Democrats and the president have got to be stronger on working-class issues. They have got to make it clear that we believe in a government that represents all, not just the few.”

- Sen. Bernie Sanders (I-Vt.)

 

“No one should assume that the Fed can really protect the economy and the financial system and our reputation globally from the damage that [a U.S. default] might inflict,” said today. “We shouldn’t even be talking about a world in which the U.S. doesn’t pay its bills. It just shouldn’t be a thing,”

- Republican Jerome Powell (Federal Reserve Chair)

 

“This bill would destroy Inflation Reduction Act investments that are already spurring job growth around our country building our clean energy future here at home. [It] also kills policies” like Project Labor Agreements and prevailing wages “to ensure the jobs created are good-paying, safe jobs with workers who are properly trained. And they get rid of vital credits that would grow clean energy jobs in rural communities and communities that have suffered job losses for decades due to offshoring of manufacturing jobs.”

- Jason Walsh (director of the BlueGreen Alliance, the union-environmentalist coalition)

 

“Such an event [demonstrates] the chaos within the United States, that we’re not capable of functioning as a democracy, and the governance issues associated with it. It would be…almost a certainty that Russia and China] would look to take advantage of the opportunity.”

- Avril Haines (Director of National Intelligence)

 

A default “could leave some lasting scars, including a permanent increase in the cost of funding U.S. federal debt.”

- David Kelly (chief global strategist at J.P. Morgan Asset Management)

 

“Republicans … want to destroy the government as it has existed since 1933, but since that government is actually quite popular, they cannot get the cuts they want by going through normal legislative procedures. Instead, they are trying to get their demands by holding the rest of us hostage.”

- Heather Cox Richardson (American historian, author and Boston College professor)

 

“Should we reward holding the threat of default as a hostage? No. It’s not real complicated.”

- Sen. Christopher Cross (D-Del.)

Exhibit exposing life – and health

Donating bodies to science goes beyond helping medical students and harvesting organs, as shown by the world-renowned “Body World RX” exhibit opening May 13 at the Peoria Riverfront Museum.

Today, seniors are warned to pay attention to their hips and knees, hearing problems, macular degeneration, gum recession, foot woes like plantar fasciitis,, and aging bodies’ other changes. Decades ago, countless school kids saw classroom pictures of healthy lungs and lungs damaged by smoking.

This spring and summer, visitors will be able to explore the physiological and biological wonders within us from the inside out, literally.

Less “CSI” than “Bill Nye: Science Guy,” “Body World RX” displays the anatomical makeup of the human body, showing our physical possibilities and limits, and it can encourage guests to reflect on what it means to be human. Plus – referenced by the “RX” designation – the bodies presented (again, all donated) help increase awareness of the dramatic impacts of illness and injury, how the body’s intricate blend of organs, muscles, bones and nervous system can develop and react to back pain, cancers, diabetes, dementia, obesity, smoking, even eating disorders, and suggest actions people can take to be healthy.

All the everpresent effects of our bodies are explained in easy-to-appreciate ways. For instance, feelings of joy stem from interactions between the brain’s neurotransmitters and hormones churning through our systems; bodies’ potential movements are revealed by the intermingling of skeleton and muscles; the unwavering engine of life, the heart, is demonstrated – with a special complementary exhibit assisted by a Peorian, Dr. Anthony Cutilletta, offering professional and personal insights on the heart’s structure, function and overall cardiac well-being.

One of the planet’s most popular touring exhibits, seen by more than 50 million visitors, “Body World RX” was created by Dr. Gunther von Hagens, a German physician and inventor of plastination, an intricate process that removes fluids and fatty material from bodies’ cells and replaces them with plastics that harden, patented in the 1970s.

Continuing through September, the fascinating exhibitions are sponsored by the Gilmore Foundation and the Corporate Visionary Society Council in partnership with the University of Illinois College of Medicine and OSF JumpTrading Medical Simulation Center, with support from Unity Point (Carle) and OSF.

Medicaid benefits being cut

It’s one thing to enrich the wealthy through targeted tax cuts, etc., but must government make the poor needier?

That’s looking likely since Congress in its Consolidated Appropriations Act, enacted Dec. 29, 2022, set March 31 of this year as when enhanced Medicaid was dropped from the nation’s Public Health Emergency response to the COVID pandemic.

States will begin cutting people from Medicaid when they stop being eligible due to their income, which has been on hiatus since the pandemic. Until this spring, about 85 million people were covered by Medicaid – 3.9 million Illinoisans – set up to help low-income households. But the coverage will be cut for millions of Americans in the next several months.

Federal officials estimate some 8 million people could lose their eligibility and be cut off from Medicaid because their incomes are different than before. In Illinois, the state’s Department of Healthcare and Family Services (HFS) estimates that 700,000 Illinoisans could be affected.

Starting soon, all Medicaid customers must renew their coverage – not required since March 2020 -- and government notifications will be staggered. That means that early this month, those due for renewal on June 1 were notified of the change. Those due to renew July 1 will get notices on June 1, and so on.

The change could force many people into the inconvenience and confusion of seeking coverage through the health-insurance marketplace.

Medicaid is a comprehensive health-insurance program jointly funded by federal and state dollars. In Illinois, about 3.9 million people are covered, from low-income adults and children, to pregnant women and people with disabilities. Early in the pandemic, Congress adjusted Medicaid with changes such as more federal funding to keep customers enrolled, even if their incomes changed. This “continuous coverage” ensured people wouldn’t lose coverage during the pandemic unless they moved out of state, requested cancellation, or died.

Now, Medicaid beneficiaries are advised to look for options before they’re dropped. Becoming ineligible for Medicaid doesn’t mean you cannot get insurance, but you’ll have to go elsewhere, and seeking affordable health protection for families – coverage for doctors and medicines – can seem overwhelming, with dozens of providers, different subsidies and other costs and details to consider.

States’ health-insurance marketplaces, created by the Affordable Care Act, are where people can buy individual insurance with the possibilities of income-based subsidies. They can be found through the federal government’s website: https://www.healthcare.gov/.

People being excluded from Medicaid also might think about coverage available outside these marketplaces, but independent plans may not offer coverage of some things, such as pre-existing conditions, or have higher deductibles, or limited doctor or hospital networks.

While waiting for notification, people should plan ahead. Illinois’ HFS recommends going online to abe.illinois.gov and clicking “Manage my case” to set up an online account, verifying your correct address (in the “Contact us” tab) to make sure you get HFS’ mail, and looking up your due date (in the “Benefit details” tab) so you’ll know when to expect notification.

‘If we have enough current information about you to decide if you still qualify, we might be able to automatically renew your coverage,” HFS says. “If we need information, you must submit your renewal by the due date on your form. You can submit online by clicking ‘Manage my case’ at abe.illinois.gov, mail your form according to the letter, or call toll-free (800) 843-6154.

“If you are no longer eligible for Medicaid, it is important to quickly get other health insurance,” HFS says. “You usually have 60 days to enroll in a new plan. Ask your job about health insurance or visit the official Affordable Care Act marketplace for Illinois at GetCoveredIllinois.gov. You can get free help signing up for a plan that meets your needs. Most people find a plan for $10 or less per month after tax credits.”

People with other questions should go to the “Manage my case” button at abe.illinois.gov.

Good luck being proactive – and resisting the sense you’re being smacked while you’re down.