Add Mitt Romney’s TRUST Act, which aims to pave the way for fast-tracked changes to “restore and strengthen” Social Security and Medicare, to the list of controversial provisions that may or may not be included in the final version of the next stimulus package currently being negotiated by Congress.
The Republican Senator from Utah said in a Senate floor speech this week he has a bipartisan list of 14 Senate sponsors and 30 members from each party as supporters of the bill in the House. The “Time to Rescue United States’ Trusts Act of 2020,” or TRUST Act for short, made the cut to be in the Senate GOP’s $1 trillion HEALS Act, viewed as a starting point for negotiations with House Democrats, who of course passed their own $3 trillion stimulus bill called the HEROES Act back in May.
TRUST Act 101
The TRUST Act of 2020 is an updated version of the bill of the same name which Romney initially introduced in October 2019 as S.2733.
Here’s how it would work, according to a statement from Romney:
- At the beginning of January 2021, the Treasury would have to deliver to Congress a report of the government’s major, endangered federal trust funds [including Social Security and Medicare].
- Congressional leaders would appoint members to serve on “Rescue Committees”—one per trust fund—with the mandate to draft legislation that restores solvency and otherwise improves each trust fund program.
- Rescue Committees would ensure bipartisan consensus by requiring at least two members of each party to report legislation.
- If a Rescue Committee reports a qualifying bill for its trust fund program, it would receive expedited consideration in both chambers. While 60 votes would be required to invoke cloture prior to final passage in the Senate, only a simple majority would be needed for the motion to proceed, which would be privileged.
A one-pager of the legislation is available here.
Supporters speak out
“Among its many devastating effects, COVID-19 has threatened the fiscal health of essential programs like Medicare and Social Security,” Romney said Monday. “If Congress does not respond quickly, the day of insolvency for these programs will now come years sooner than expected. The TRUST Act is a bipartisan solution to shore up these programs and get us off the path of fiscal danger.”
The bill has the support of Sen. Rob Portman (R-OH), who has been heavily involved in retirement reform efforts.
“The pandemic has not only presented unprecedented health care and economic challenges to our country, it’s also accelerated the growth of our deficits and national debt, which now exceeds $26.5 trillion. The TRUST Act helps address this issue by creating bipartisan commissions for each critical trust fund projected to become insolvent, protecting program beneficiaries and future generations of taxpayers alike,” Portman said.
In a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy, a bipartisan group of 60 House members noted that the trust funds face exhaustion far sooner than expected as a result of the current crisis.
“Trust fund insolvency threatens serious hardship for those who depend on the programs…We, therefore, respectfully request that further pandemic-response legislation include provisions for future budget reforms to ensure we confront these issues when the economy is strong enough,” the letter states. “Enacting a consensus process like the [TRUST] Act would create special bipartisan, bicameral rescue committees to give these programs the priority and urgency they deserve.”
Maya MacGuineas, President, Committee for a Responsible Federal Budget, also released a statement supporting the TRUST Act’s inclusion in the stimulus package.
“When today’s youngest retirees turn 73, they can expect an abrupt 23% cut in their Social Security benefits under current law. This is no longer about saving these programs for our grandchildren. The benefits of our grandparents are vulnerable,” MacGuineas said.
Opponents “troubled” by TRUST
Among notable opponents of the bill’s inclusion in the next stimulus package, you might start with AARP, Social Security Works and House Ways & Means Committee Chairman Richard Neal (D-MA).
“While this [stimulus] bill is short on needed COVID-related relief, it includes the TRUST Act, a bill that is unrelated to the crisis and that wrongly targets Social Security and Medicare to reduce deficits that have expanded because of needed pandemic relief,” said AARP Executive VP and Chief Advocacy & Engagement Officer Nancy LeaMond.
“These programs are critical to millions of Americans who rightfully expect Congress to be careful stewards of their earned benefits,” she added. “Social Security is the principal source of income for over half of older American households, and roughly one quarter of those age 65 and older depend on it for nearly all (90% or more) of their income. And Medicare provides the critical health coverage they need. The TRUST Act provisions should be dropped from the bill.”
Nancy Altman, president of Social Security Works, said President Trump, McConnell and all Congressional Republicans are “plotting to use the cover of the pandemic to slash Social Security.
“It is no surprise that seniors are increasingly turning against the Republican Party. They are doing nothing to protect seniors and people with disabilities; rather, they are working overtime to cut our earned benefits,” Altman said. “Republicans claim that the TRUST Act is about deficit reduction, but that is patently false. Even conservative president Ronald Reagan understood that Social Security does not add a penny to the deficit.”
Rep. Neal said in a statement that he is particularly troubled Republicans are pushing for the TRUST Act’s inclusion in whatever deal Congress reaches.
“The TRUST Act will result in far-reaching cuts to Social Security and Medicare—that is the intention of the bill,” Neal said. “The legislation sets up closed-door commissions to fast-track the destruction of these programs.”
Neal added that, among other things, a similar closed-door commission in 2010 made cuts to the Cost-of-Living Adjustment (COLA); hiked the retirement age (which is an across-the-board benefit cut for all retirees); and changed the Social Security benefit formula to reduce the amount people receive each month.
“The last thing struggling Americans need right now is a secret panel designed to slash their earned benefits and further undermine their economic security. It’s astonishing that attacking Social Security and Medicare are Republicans’ priorities at this moment,” Neal said, while vowing to “fight against its nefarious inclusion in any upcoming relief package.”
The CFRB countered by saying Neal’s statement was false and misleading, pointing out the bill would name no policy changes directly, and that any committee recommendation would still have to pass the traditional legislative hurdles to become law.
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.
