Americans love their Social Security benefits, opposing cuts by a two to one margin. Usually politicians at least try to tell voters what they want to hear, but nearly every Republican candidate for President has lined up to attack Social Security, proposing changes that would amount to a cut in benefits, no matter what they call it. Paul Krugman has pointed out that Republicans must espouse these unpopular positions because their wealthy donors demand it.
Some, like Jeb Bush, Ted Cruz, Rand Paul, John Kasich and Bobby Jindal, have supported privatization, even though it’s clear after our recent economic downturn that investing Social Security funds in the stock market risks disaster. Years ago, President George W. Bush went on a cross-country tour to convince the American public that privatization was a good idea. Thankfully, he failed miserably.
This election cycle, the more popular position is “raising the retirement age,” which sounds innocuous enough. Marco Rubio, Scott Walker, Jeb Bush, Chris Christie, Ted Cruz, Rand Paul, Lindsey Graham, Rick Perry and Rick Santorum have all expressed support for this position. Meanwhile, only two Republican candidates, Donald Trump and Mike Huckabee, oppose any cuts to Social Security. One candidate, Carly Fiorina, perhaps recognizing the volatile nature of the issue, said that she would “reform” Social Security, but said she would not reveal how until she was elected.
Let’s be clear, raising the retirement age is a benefit cut. Specifically, raising the full retirement age from 67 to 69, as Chris Christie has proposed, is a 13 percent cut in benefits, no matter what age an eligible worker retires. This is on top of the 13 percent benefit cut that was incurred when the full retirement age was raised from 65 to 67 for people born after 1960. Many older people cannot find work or cannot work until age 67, let alone age 69, so they are forced to take early retirement, which means another cut in their benefits. And, according to a Government Accountability Office report, raising the retirement age would also result in more older workers applying for Social Security disability benefits, likely increasing the already too-long wait times for a hearing on a disability claim.
On the Democratic side, two candidates, Bernie Sanders and Martin O’Malley, have proposed strengthening Social Security and increasing benefits, paying for it by raising or scrapping the cap on payroll taxes, so that the rich pay their fair share. Hillary Clinton’s position remains uncertain.