Bill in Congress could lead to cuts in Social Security

By MALLORY GRUBEN and DON McINTOSH

U.S. Representatives Earl Blumenauer (D-Portland) and Marie Gluesenkamp Perez (D-Vancouver) recently found themselves on the opposite side of the national AFL-CIO over a bill in Congress that could threaten Social Security and Medicare.

Known as the Fiscal Commission Act of 2023, H.R. 5779 would establish a 16-member commission that would meet behind closed doors to come up with proposals to reduce the federal deficit through spending cuts and revenue changes. Whatever proposal the commission devises would get “fast track” treatment — similar to the way Congress rammed through passage of NAFTA-style trade agreements. The proposal would go directly to the House and Senate floor and could not be filibustered in the Senate or amended in either chamber.

H.R. 5779 is sponsored by Michigan Republican Bill Huizenga and co-sponsored by 12 Republicans and 12 Democrats, including Gluesenkamp Perez. On Jan. 18, H.R. 5779 passed the House Budget Committee in a 22-12 vote. Blumenauer was one of three Democrats to join 18 Republicans voting yes.

The committee vote came a day after the AFL-CIO delivered a letter to all members of Congress urging a “no” vote.

“(The bill) would set the stage for the kind of fiscal brinksmanship that demands cuts to workers’ Social Security, Medicare, and Medicaid benefits as the price of preventing government shutdowns,” said AFL-CIO Government Affairs Director William Samuel in the letter. “The lack of transparency and accountability in such a process raises significant doubts about the intentions behind the approach, such as substantial benefit cuts in Social Security and other federal programs. We share the White House’s characterization of this commission as a potential ‘death panel’ for Social Security.”

The bill is also opposed by AARP and the group Social Security Works, which delivered half a million petitions in opposition.

Lawmakers who support the Fiscal Commission Act — mostly Republicans — say it’s needed because partisan politics have left Congress too divided to pass policies to keep trust funds solvent and rein in deficit spending.

The Social Security trust fund is projected to be depleted by 2033, according to the latest annual forecast. In the extremely unlikely event that Congress takes no action before the trust fund runs out, benefits would have to be cut about 20% at that point. That’s because the Social Security trust fund is better understood as an over-full checking account than as a savings account. Social Security has always been a “pay as you go” system in that today’s benefits are paid by payroll taxes on today’s workers. For the program’s first half century, Congress treated the trust fund like a special purpose checking account: It needed to have enough money to pay benefits when they were due, but not much more. Then in 1983, Congress changed the law by dramatically increasing the Social Security payroll tax. The trust fund ballooned, and then began drawing down its balance, exactly as planned.

As laid out in H.R. 5779, House and Senate leaders from each party would each appoint three members of Congress and one non-voting “outside expert.” At least seven of the 12 voting members would have to sign off on any recommendations before they move to Congress, and that majority would have to include at least two Republicans and two Democrats.

Tom Leibfried, health policy specialist for the AFL-CIO, told the Labor Press there’s some merit in the idea that Congress’ ability to tackle the deficit has been “foiled by the partisan divide,” but shifting policy-making responsibility to a small group that meets mostly behind closed doors is not the answer. And requiring two members of a different party to sign off is not enough to prevent mostly partisan plans — especially those to cut Social Security — from advancing.

“They’re saying, ‘Congress doesn’t work, so we have to empower seven lawmakers to make these enormous decisions that affect the fate of the entire country. When you think about it, it’s really kind of insane,” Leibfried said. “If the Republicans are earnest about doing something about spending, there’s already legislation out there that can serve as a starting point.”

One example is a bill sponsored by Representative Brendan Boyle (D-Penn.) that would raise Social Security and Medicare taxes on people who make more than $400,000 per year, and extend those taxes to investment income, not just wage and salary income like now. Right now high earners don’t pay any Social Security tax on income above $168,600 per year. That one change could make Social Security solvent for the next 75 years. But Republicans want no part of it.

Ahead of the Jan. 18 budget committee vote on H.R. 5779, the committee’s Republican majority voted down an amendment to require the fiscal commission to consider raising taxes on high-earners. Republicans also down-voted amendments that would have barred the commission from changing Social Security and Medicare programs.

“We think that series of amendments really made the point of what the Republicans want to do with this commission,” Leibfried said.

Blumenauer voted “yes” on those amendments, but voted for H.R. 5779 anyway when they failed. Leibfried said the AFL-CIO was disappointed with Blumenauer’s vote. 

Blumenauer’s office said he was not available for an interview with the Labor Press, but emailed a written statement.

“It’s no secret that we face serious financial challenges if we don’t take action,” said the statement attributed to Blumenauer. “The composition of the commission, equally divided between Democrats and Republicans, guarantees that any draconian recommendations won’t advance…. There are, however, some simple solutions that could get a boost from an independent commission,” the statement continued. “Things like cutting out of control and unaccountable defense spending and inappropriate agricultural subsidies, and the need for people to pay the taxes they owe; the easiest tax increase is to stop those who cheat.”

Gluesenkamp Perez also was not available by press time for an interview, but a spokesperson said the size of the national debt is one of the most frequent issues constituents bring up for her, and that she supports raising the cap on the highest income earners to protect Social Security.

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