As newly elected Speaker of the House Mike Johnson (R-LA) had a relatively low profile on Capitol Hill prior to the whirlwind procession of events that handed him the gavel by a 220-209 vote Wednesday, the media have been scrambling to learn more about the legislative priorities of the man who is now second in line in presidential succession behind Vice President Kamala Harris.
He has quickly been branded as someone who wants to cut Social Security and Medicare as part of a broader desire to reduce the national debt, based on actions during his stint as Chair of the Republican Study Committee from 2019-2021. In that role, Johnson released proposed budgets that included $2 trillion in cuts to Medicare and $750 billion in cuts to Social Security (more on this later).
In his first remarks in the chamber after being elected speaker Wednesday, Johnson said the House would vote “immediately” to create a bipartisan commission to study the national debt and social safety net spending.
“The greatest threat to our national security is our nation’s debt. We know this is not going to be an easy task, and tough decisions will have to be made. But the consequences if we don’t act now are unbearable,” Johnson said. “We have a duty to the American people to explain this to them so they understand it well. And we’re going to establish a bipartisan debt commission to begin working on this crisis immediately.”
Before he was elected Speaker, back in September Johnson joined the vast majority of House Republicans in releasing a continuing resolution (H.R. 5525) that included a 16-member fiscal commission designed to fast-track cuts to Social Security, Medicare, and other government programs. It would have reduced discretionary spending for most domestic programs by nearly 30%. The House voted 198-232 to defeat the continuing resolution on Sept. 29, before passing a short-term spending bill Oct. 2 to avoid a government shutdown and fund the government through Nov. 17—a continuing resolution that subsequently triggered Republican efforts to remove Kevin McCarthy (R-CA) as House Speaker.
Opposition to the debt commission
The formation of such a fiscal commission has been likened to a “death panel” by the Biden Administration and Social Security expansion advocates such as the National Committee to Preserve Social Security and Medicare and Social Security Works. “This commission is designed to subvert the will of the American people by fast-tracking cuts to Social Security and Medicare behind closed doors,” Social Security Works President Nancy Altman said in a Sept. 29 statement. “Tellingly, the Continuing Resolution specifies that Congress will vote on the commission’s recommendations ‘no earlier than November 6th, 2024’—the day after the next election.”
Altman went on to say the commission is designed to allow incumbents to avoid political accountability in the upcoming election for their support of drastic cuts to Americans’ earned benefits, “and then vote in the lame duck Congress to force those cuts down the American people’s throats.”
“It is unfortunate and disappointing that one of the Speaker’s first priorities is creating a mechanism intended to slash programs that American workers pay for in every paycheck, fully expecting the benefits to be there when they need them.”
Max Richtman
Max Richtman, President & CEO of the National Committee to Preserve Social Security and Medicare, released a statement Oct. 25 criticizing the idea of the debt commission and echoing the “political cover” to cut the programs notion.
“As if to prove right off the bat that he’s coming after Social Security and Medicare, the new Republican House Speaker, Mike Johnson, announced that he is creating a debt commission. Johnson has a history of blaming the debt on Social Security and Medicare—and falsely claiming that Social Security is going ‘belly up.’ Social Security and Medicare Part A are self-financed and do not contribute a penny to the debt. But the kind of commission Johnson announced is designed to give Congress political cover for cutting Americans’ earned benefits. That is why these commissions have been rightly described as ‘death panels’ for Social Security and Medicare,” Richtman’s statement said. “It is unfortunate and disappointing that one of the Speaker’s first priorities is creating a mechanism intended to slash programs that American workers pay for in every paycheck, fully expecting the benefits to be there when they need them.”
You may remember that back in 2021, legislation introduced by Sen. Mitt Romney (R-UT) that subsequently died sought to create bipartisan panels with mandates to craft legislation that “improves” the finances of Social Security and other trust fund programs. The bills produced by the bipartisan committees would have receive expedited consideration in the House and Senate, something the newly proposed debt commission would also include.
The RSC Budget Johnson put forth in 2020 called for “Congress to adopt reforms proposed by the Social Security Reform Act to save Social Security.” The budget document said the goal of the Social Security Reform Act is to ensure the long-term solvency of Social Security for this and future generations.
“It does so by modernizing the program, phasing out antiquated elements and bringing together a number of commonsense ideas to make the system work better for today’s workers and retirees,” the budget said (page 102). “Many of the specific policies included in this legislation have bipartisan support and have been included in proposals put forward by members of Congress on both sides of the aisle and well-respected non-partisan organizations.”
Among the reforms called for are gradually raising the full retirement age until it is increased by three years. “The RSC Budget recognizes that, due to Congressional inaction, the Social Security Reform Act’s retirement age increase would need to be extended, likely to age 70, to achieve long-range sustainable solvency.”
Additional reforms called for in the budget include changing the formula for how the annual cost-of-living benefit increases is calculated. The Social Security Reform Act also sought to “focus COLAs on the beneficiaries who need them most, not the retirees still earning significant incomes. Specifically, the proposal would not provide a COLA for retirees with incomes above $85,000 ($170,000 filing jointly), the same levels as Medicare income-adjusted premiums under current law and affecting only about 6 percent of beneficiaries.”
Another provision from the Social Security Reform Act would protect against poverty in old age by providing “a low-wage earner retiring in 2050 with 38% higher benefits than would otherwise be payable under current law.”
Finally, the RSC budget urged lawmakers to consider legislative options that allow employers and employees to reduce their payroll tax liability in order to use those savings to invest in private retirement options.
From the budget document (page 105):
According to an analysis from the Tax Foundation, “a worker who earned the average income and retired at the normal retirement age of 66 in 2016 could expect a Social Security retirement benefit of $19,646 a year.” However, a worker that saved ten percent of his or her income in a 401(k) retirement account made up of 60 percent stocks and 40 percent bonds would have “accumulated saving[s] total[ing] $719,670, which might provide an annuitized annual income of $57,319 a year, a far larger sum.”
The budget said such an effort is particularly critical for younger generations who largely believe Social Security benefits at levels enjoyed by current retirees will not be there for them in the future.
SEE ALSO:
- 2 Ways a Harris Presidency Could Impact Social Security
- Pence: Trump and Biden ‘Identical’ on Social Security
- COLA Conundrum: 80% of Retirees Want Better Inflation Protection
- 3 Proposals to ‘Fix’ Social Security
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
So what’s your solution?
You know, it’s a shame every publication has such a leftist slant. Even business publications.
We are literally bankrupt and on the verge of our fiat currency collapse and any attempt to limit spending is met with this type of reaction.