New bipartisan legislation introduced on Thursday would create a bicameral fiscal commission to tackle the nation’s $33 trillion dollar debt—potentially “fast-tracking” cuts to Social Security along the way, opponents say.
The Fiscal Stability Act, introduced by U.S. Senators Joe Manchin (D-WV) and Mitt Romney (R-UT), and co-sponsored by Sens. Kyrsten Simena (I-AZ), Todd Young (R-IN), John Hickenlooper (D-CO), Cynthia Lummis (R-WY), Mark Warner (D-VA), John Cornyn (R-TX), Jeanne Shaheen (D-NH), and Thom Tillis (R-NC), aims to “stabilize and decrease” national debt.
The Act proposes forming a 16-member commission, consisting of 12 elected officials and four outside experts, “who would produce a report and propose legislation aiming to improve the long-term fiscal condition of the Federal Government, stabilize the ratio of public debt to GDP within a 15-year period, and improve solvency of Federal trust funds over a 75-year period,” according to a fact sheet by Sen. Romney’s office.
The legislation is a companion bill to the Fiscal Commission Act, which was introduced by Congressman Bill Huizenga (R-MI) in September.
During an interview with CNBC’s Squawk Box on the bill, Manchin noted that Social Security had never went through a series of “checks and balances,” alluding to that as the reason behind its imminent insolvency.
Instead, Manchin positioned the bill as a safeguard tool against the trust fund’s eventual inadequacy.
“People who, let’s just say get a $1,000 check right now from Social Security…Within ten years, that’s going to be cut to $800 and no one will do a thing, and they have no idea and can do nothing about it,” Manchin stated. “We want to prevent that from happening.”
“Consequently, if a debt commission with jurisdiction over Social Security were to be formed, its purpose would be clear: to cut its modest benefits, while avoiding political accountability.”
Yet, critics of the Fiscal Stability Act say the legislation would accelerate further damage to Social Security, with many going as far as to call the commission a “death panel” for the trust fund.
Over 100 organizations, including Social Security Works, the Alliance of Retired Americans, and the Economic Policy Institute, signed a joint letter Wednesday expressing fears that the bill would cut down on revenue dedicated to Social Security and argued that since the trust fund has no borrowing authority from the federal government, it does not contribute to the nation’s current debt level.
“Congress already has a process to confront the federal debt … known as reconciliation. Revealingly, Social Security cuts are excluded from the reconciliation procedure, because, as previously stated, the program is totally self-funded, cannot pay benefits or associated costs without the revenue to cover the costs, has no borrowing authority, and, therefore, does not add a penny to the deficit,” the letter writes. “Consequently, if a debt commission with jurisdiction over Social Security were to be formed, its purpose would be clear: to cut its modest benefits, while avoiding political accountability.”
The legislation comes just off the heels of the third Republican presidential candidate debate on Wednesday, which saw some GOP contenders calling for raising the full retirement age (FRA) in order to avoid insolvency.
Former New Jersey Governor Chris Christie and former South Carolina Governor Nikki Haley both stated their support for increasing the age, with Christie loudly condemning the ultra-wealthy for claiming Social Security benefits.
“The fact is on Social Security, it was established to make sure that no one would grow old in this country in poverty, and that is what we have to get back to,” Christie said during debate. “Rich people should not be collecting Social Security.”
“We need to be realistic,” he continued. There are three factors that would determine solvency: retirement age, eligibility requirements and taxes. “We are already overtaxed in this country.”
Haley attacked other candidates, including Florida Governor Ron DeSantis and former President Donald Trump, for refusing to support entitlement reforms, adding that “any candidate that tells you they’re not going to take on entitlements is not being serious.”
On the other hand, Senator Tim Scott (R-SC) voiced his opposition to raising the retirement age, and instead said that he would resolve the issue by growing the economy and cutting spending.
“If we’re going to actually tame this tiger, the way you do it is not by picking on seniors who have paid into a program that deserve their money coming back out to them,” Scott said.
SEE ALSO:
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- Explaining the Misperception Behind Social Security Insolvency
- It’s Official: 2024 Social Security COLA Set at 3.2%
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
I would like to know if this statement is correct, presuming no changes to the current system : “ People who, … get a $1,000 check right now from Social Security…Within ten years, that’s going to be cut to $800, … “