Sen. Angus King in the U.S. Capitol in 2021. | Anna Moneymaker, Getty
Originally published in the Maine Beacon on March 2, 2023
One of the state’s biggest unions said its members are deeply concerned about a proposal floated by independent Sen. Angus King and a group of Senate Republicans to slash Social Security benefits by raising the retirement age to 70.
“Social Security is a critical lifeline for working-class people and we strongly condemn any action to cut it, including raising the retirement age,” said Andy O’Brien, communications director for the Maine AFL-CIO, which represents more than 40,000 workers and retirees across the state. “While the rich in this country are living longer than ever, the disparity in life expectancy between the haves and have nots is getting worse. These proposals would significantly harm working class, low-income, Black and Indigenous people, who on average have much lower life expectancy rates than wealthy Americans.”
O’Brien added, “The labor movement is closely watching this debate in Congress and we will vigorously defend our retirement security against any attacks.”
Semafor reported on Tuesday that King is in talks with a group of Republican senators led by Louisiana Sen. Bill Cassidy to formulate a bill that could include raising the Social Security retirement age from 67 to 70.
Other policy considerations reportedly being discussed include tweaking a benefits formula to take into account the amount of years a person has worked, and expanding the program’s ability to invest in private stocks, rather than the current trust fund model.
Spokespersons for King and Cassidy said the focus of the negotiations is to keep the Social Security trust fund from going insolvent in nine years. The looming insolvency is spurred by a combination of Social Security payroll taxes dropping during the pandemic and retiring Baby Boomers expanding the number of beneficiaries.
But Republicans’ sincerity about fixing the solvency issues is in dispute.
The timing of the talks between King and Republicans is prompted by the need for Congress to strike a deal on raising the debt ceiling, which Republicans have previously threatened to take hostage to force cuts to Social Security.
For example, Republican Sen. Ron Johnson of Wisconsin has proposed waiving Social Security payroll taxes altogether as a way to keep people in the labor force longer and combat a tight labor market.
“The lawmakers claim that they’re looking at benefit cuts and reforms due to concern over the solvency of Social Security — though Republicans have been clear that their intentions are to slash benefits and force people to depend on work to survive for even longer into old age,” Truthout reported.
The reporting on the talks between King and Senate Republicans did not include any proposals to solve the solvency issue by increasing the amount of money going into the trust fund.
On the progressive wing of the Senate, Vermont Sen. Bernie Sanders, an independent, and Massachusetts Sen. Elizabeth Warren, a Democrat, have introduced a bill to increase retirement benefits by scrapping the income cap on the Social Security payroll tax. Currently, income over about $160,000 a year isn’t subject to the payroll tax. About 20% of current and future covered workers have earnings above the taxable maximum, according to the Social Security Administration.
Maine Rep. Chellie Pingree, a Democrat, has co-sponsored multiple bills to lift the income cap, including Connecticut Rep. John Larson’s proposal to subject those who earn more than $400,000 per year to payroll taxes and Illinois Rep. Jan Schakowsky’s bill to raise the income cap to $250,000.
“Congress must scrap the income cap allowing millionaires and billionaires to pay a Social Security tax on only $160,200 of their income,” Pingree said in a statement.
She noted that with the cap in place, people making $1 million a year stop paying into the program by the end of February, adding: “Today, Feb. 28, actually marks the day when the wealthiest Americans stop paying into Social Security for the entire year — pretty crazy when you consider that most Mainers will be paying in until Dec. 31. As Republicans plan to cut, privatize, and even end Social Security, our best option is to sunset the cap and protect the hard-earned benefits of older Mainers.”
Spokespersons for King and Cassidy did not say whether lifting the income cap is currently a part of their talks.
“The Social Security trust fund is going insolvent in nine years. Senators Cassidy and King have been working on a legislative solution — which has been reported in the past. The plan is not finalized,” the senators’ offices said in a joint statement.
“This is an example of two leaders trying to find a solution to a clear and foreseeable danger across party lines,” the statement continued. “Although the final framework is still taking shape, there are no cuts for Americans currently receiving Social Security benefits in our plan. Indeed, many will receive additional benefits.”
The consequences of raising the retirement age would mean deep cuts for people who claim early. Social Security allows a person to retire as early as age 62, although by taking a significant reduction in their benefits. That reduction goes up as the full retirement age is raised. The Center on Budget and Policy Priorities found that raising the retirement age to 70 would mean a retiree at age 62 would receive only 57% of their full monthly benefit.
“Most people claim early, which means they could receive as little as half their full benefit,” CBPP reported in 2016. “Nearly half of retirement beneficiaries claim benefits at age 62. Some of these beneficiaries — especially those with lower earnings — are in poor health but don’t meet the stringent criteria for disability benefits.”
CBPP also found that raising the retirement age hits low-income workers, disproportionately people of color, the hardest.
“Though raising the retirement age cuts everyone’s benefits roughly equally, it affects incomes unequally,” CBPP reported. “That’s because Social Security benefits make up a greater share of income for low- to middle-income retirees, as well as for minorities.”
Kelly Hayes, a contributing writer at Truthout, also noted that cuts are being proposed as American life expectancy has fallen.
“Life expectancies are dropping and they want to raise the retirement age,” Hayes tweeted on Tuesday. “They want you to work until you’re dead, but at a certain point, no one is going to hire you. What are people without money supposed to do in this country? Die or be caged. This is an age of social disposal.”
Dan Neumann studied journalism at Colorado State University before beginning his career as a community newspaper reporter in Denver. He reported on the Global North’s interventions in Africa, including documentaries on climate change, international asylum policy and U.S. militarization on the continent before returning to his home state of Illinois to teach community journalism on Chicago’s West Side. He now lives in Portland. Dan can be reached at dan(at)mainebeacon.com.