GOP Makes First Big Move to Cut Social Security

Apparently, the election of Donald Trump, in concert with a Republican-controlled Congress, is the GOP’s cue that it’s time to make real inroads on rolling back so-called entitlements.

GOP introduces plan to massively cut Social Security

Yahoo is reporting that Rep. Sam Johnson of Texas, the Republican chair of the all-powerful Ways and Means Committee, has introduced legislation that would drastically cut Social Security.

The key “bullet points” of Johnson’s bill are that it significantly curtails benefits, introduces means testing, and raises the retirement age from 67 to 69.

Should the bill become law, the effects would be very broad, with every income bracket, except for the absolute lowest, experiencing a reduction in benefits. The cuts would be significant, too; according to the Office of the Chief Actuary of the Social Security Administration, workers earning around $50,000 per year – by no means a princely sum any longer – could expect benefit checks go down anywhere from 11 percent to as much as 35 percent.

As one would expect, the most draconian consequences would be felt by higher earners. For example, retirees making over $85,000 per year would have to go without cost of living adjustments (COLA) altogether.

As ominous as all of this appears, more troublesome is the knowledge that without any significant changes, Social Security would begin to lose its ability to pay full benefits at some point in the 2030’s.

It is expected that Congress will begin discussions in earnest on Johnson’s proposal sometime next year.

The information contained here is for general information purposes only. The Financial Writer blog and Bob Yetman disclaim responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article, or any other article featured at this blog, should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

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