How would this massive proposed Social Security change affect retirees? | Business news

Virtually everyone on Capitol Hill in Washington, DC understands that changes are needed to keep Social Security solvent. What they disagree on, however, is exactly what needs to change.

A senator has some controversial thoughts about what should be done. sen. Ron Johnson (R-Wis.) recently shared his ideas about revamping the federal program. How would the GOP senator’s massive Social Security proposal affect retirees?

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Let Congress decide

sen. Johnson stated earlier this month on the podcast “The Regular Joe Show,” hosted by Joe Gigaanti, that he believes Social Security should not be a right. His vision also extends to Medicare, the federal health program for seniors.

What does he propose instead? Johnson wants Congress to decide each year how much money should be allocated to Social Security and Medicare.

Johnson told Gigaanti, “If you qualify for the right, you get it regardless of the cost. And our problem in this country is that over 70% of our federal budget is all compulsory spending.” He added, “What we should do is we should turn everything into discretionary spending so it’s all evaluated.”

By making all Social Security and health care spending discretionary, the amount of funding for the programs would be determined in the annual budget passed by Congress. The programs would be included in all other federal budget items.

This is not a new position for Johnson. He commented, “I’ve been saying for as long as I’ve been here that we need to transfer everything, put everything on the budget, so we have to think about it every year.” But the Wisconsin senator thinks this change is necessary to save and restore Social Security.

What it would mean for retirees?

The most obvious way Senator Johnson’s proposal would affect retirees who receive Social Security benefits is to do away with their automatic annual cost of living adjustments (COLAs). These COLAs are intended to help Social Security recipients cover the rising costs due to inflation.

Automatic COLAs haven’t always been around. Before 1975, Social Security increases were enacted by lawmakers along the lines of what Johnson wants to do.

But a Social Security transition from an entitlement program to a discretionary program could go far beyond just COLAs. Congress would even have the power to cut benefits at any time if funding decisions were made on an annual basis.

In theory, the criteria for receiving benefits could also change more frequently if social security financing was discussed every year. These criteria have changed in the past, such as increasing the full retirement age. However, such changes have been relatively rare.

The proverbial snowball chance

Senator Johnson’s comments sparked a wasp’s nest. Speaker of the House Nancy Pelosi issued a public statement calling Johnson’s ideas “contempt for Social Security as we know it.” Senate Majority Leader Chuck Schumer and White House Press Secretary Karine Jean-Pierre said Johnson wants to put Social Security “on the chopping block.”

Johnson disagrees with those characterizations. His spokesman said the senator wants to save Social Security and Medicare.

Perhaps most importantly, other GOP lawmakers have not stepped up to vote in favor of Senator Johnson’s proposal. Without broad support within his own party, Johnson’s idea of ‚Äč‚Äčturning Social Security into a discretionary program probably has the proverbial snowball chance to be implemented.

However, there are other potential Social Security changes that enjoy bipartisan support among Americans. For example, a majority of both Democrats and Republicans are in favor of raising the salary cap for Social Security payroll taxes, cutting benefits for high earners, and raising the full retirement age.

It is likely that retirees may see changes in Social Security in the coming years. But letting Congress vote every year on funding the program will almost certainly not be one of them.

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