On March 20, 2024, the Republican Study Committee (RSC) released their budget blueprint for the next decade, beginning with Fiscal Year (FY) 2025.  Budget proposals do not have the force of law; they do, however, express the priorities of those who support them.  The budget approved by the Republican-led House Budget Committee on March 7, 2024 did not include specific proposals relating to Social Security, instead promoting the creation of a so-called ‘fiscal commission’ that would be tasked with coming up with specific changes to Social Security and Medicare, in the name of fiscal responsibility, that would be fast-tracked through Congress.

Conversely, the budget proposed by the RSC, while still vague, outlines more specifically the principles and proposals the RSC supports for changing Social Security, Medicare and Medicaid.  As the RSC membership includes 100 percent of the House Republican leadership and 80 percent of Republican House members, this budget represents a blueprint for how the House Republican majority would ‘reform’ the social insurance safety net.  Their proposed budget for the next decade would cut Social Security by $1.5 trillion, Medicare by $1 trillion and Medicaid, the Affordable Care Act and the Children’s Health Insurance Program by $4.5 trillion while at the same time promoting tax cuts that would primarily benefit the ultra-wealthy and large corporations.  A full $73 billion of the cuts to Social Security and $31 billion in cuts to Medicare would take effect next year (in 2025).

Reshaping Social Security from an Earned Benefit to a Welfare Program

The RSC budget, while professing to oppose cutting or delaying retirement benefits for any senior in or near retirement, in reality, promotes “program savings” as the only appropriate solution to the Trust Funds’ projected insolvency by the end of the next decade.  Raising revenue, even limited to the wealthiest among us earning over $400,000 annually, or transferring general revenues, are both criticized and dismissed as options.  Only benefit cuts remain, some of which are designed to advance the RSC principle of reshaping Social Security from an earned benefit to a welfare program, which would seriously undermine the program’s overwhelming support by the public.  Specifically, the budget document states: “the RSC budget is committed to protecting and strengthening Social Security for those that need it most” – not for the millions of hard-working middle-income Americans who have paid into Social Security their entire working lives and earned the benefits it provides.

Cost of Living Adjustment

One of the most critical protections provided by Social Security is its annual Cost of Living Adjustment (COLA), intended to help protect those on fixed incomes from the ravages of inflation.  COLAs are not dependent on the ability of the current dysfunctional Congress to pass legislation, but are automatically calculated each fall to reflect increases in prices over the previous year.  The current formula for calculating COLAs is based upon the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is a measurement by the Bureau of Labor Statistics of the changes in the prices paid for a market basket of goods and services purchased by urban wage earners and clerical workers.

COLAs are all about protecting Social Security benefits from being eroded by inflation.  But, sadly, the current CPI-W has fallen far short of providing needed inflation protection because it fails to adequately measure the spending patterns of seniors.  Seniors typically spend more on out-of-pocket health care costs than other Americans, and in most years, the cost of health care rises more quickly than general inflation.  The National Committee to Preserve Social Security and Medicare has long advocated for the adoption of an alternative measurement, the Consumer Price Index for the Elderly, or CPI-E, for the purpose of determining COLAs because it is the most accurate measure of the real effect of inflation on the goods and services that are purchased by America’s seniors.

The RSC budget, while not proposing any specific changes to COLAs, states that “a major part of the problem” confronting Social Security’s solvency “is the structure of Social Security’s Cost of Living Adjustment (COLA)”.  This section of the budget document, purporting to blame President Joe Biden’s economic policies and inflation for generating disproportionately large COLAs which they claim are “bankrupting Social Security at a faster rate”, demonstrates either a dangerous misunderstanding of the status of the Trust Funds and how the program’s finances are calculated or an intentional effort to mislead the public.

Social Security can never go ‘bankrupt’ so long as Americans are working and paying into the system.  At some point in the next decade, currently projected to occur in 2034, incoming revenue will not be sufficient to pay the full benefits workers have earned, leaving a gap which needs to be filled.  But calling the program ‘bankrupt’ has been used over the years to try and convince the American public, especially younger workers, of the mistaken view that the only way to save the program is to accept drastic cuts to their earned benefits.

Further, claiming a direct correlation between the size of a COLA and the projected insolvency date is seriously misleading.  The Congressional Budget Office (CBO) projection cited in the RSC document represents CBO’s estimate of the outlays to the government in a single year, 2024, resulting from the previous year’s COLA.  The annual reports by the Social Security Trustees make it clear that COLAs are only one factor that affects the solvency of the Trust Funds and inflation can impact the program in contrasting ways.  One of the most significant factors affecting solvency is labor force participation, which is highly influenced by fertility.  As more workers from high-birthrate generations approach retirement ages, they are being replaced at working ages by low-birthrate generations.  This results in fewer workers supporting larger numbers of beneficiaries.  Proposals in the RSC budget not covered in this analysis, especially relating to changes in immigration policy, would make the workforce participation challenge even worse.

The strength of the economy, especially reflected in low unemployment rates and higher wages, plays a positive role in Social Security’s solvency.  As for the impact of inflation itself, it is the basis for calculating a wide range of Social Security’s provisions, many of which generate more revenue for the program.  For example, annual increases in the maximum wages covered by payroll taxes are tied to inflation, resulting in a larger portion of higher-income workers’ wages being covered by payroll taxes.

Rather than offering specific solutions, the RSC budget criticizes the automatic nature of the COLA – with a clear implication that the RSC prefers returning to the days when COLAs were enacted on an ad hoc basis.  Seniors, the disabled, survivors, and their families would, once more, be dependent on the ability and willingness of future Congresses and Presidents to increase benefits to help keep up with inflation.  The RSC budget also opposes the current use of the CPI-W to calculate benefits, but not because the use of this measurement is inadequate to keep up with the rising cost of living for seniors, but because it claims it is too generous.  This belief conveniently ignores the many years beneficiaries have had zero or extremely low COLAs, despite increases in the costs of health care services and other items they rely on.  The use of a potentially less adequate index for calculating COLAs would cut benefits for every single beneficiary – current or future – putting the lie to the RSC statement that their proposals would not affect current or near retirees.

Raising Social Security’s retirement age

In addition to its critique of COLAs, the RSC budget promotes raising the Social Security retirement age “to account for increases in life expectancy.”  Previous budgets proposed by the RSC specified raising the retirement age to 69 or 70, though this years’ proposal does not specify how high the RSC would propose raising the age, raising the question of whether the RSC might support an indefinite increase in the full retirement age “to account for increases in life expectancy”.  The current retirement age for receiving the full benefits a worker has earned is 67 for anyone born in 1960 or later.  Workers can collect retirement benefits as early as age 62, but are penalized in the form of reduced benefits for each year prior to the full retirement age the worker collects benefits.

Any increase in the full retirement age results in a benefit cut for all future retirees affected by the increase, regardless of the age at which they retire.  The resulting benefit penalties are deepest for those retiring at age 62, who are also those workers most likely to be unable to continue working because of poor health or the hard nature of their jobs.  These early retirees already receive only 70 percent of their full benefit.  If the age is raised to 69, they would receive 61 percent of their full benefit, and this cut would be permanent.  Even workers able to continue working until the presumed new retirement age of 69 would see a cut in their benefits, as they would be forced to continue working an additional two full years before they would be eligible for full benefits, instead of receiving full benefits plus the delayed retirement credit they would have earned under current law.

Raising Social Security’s retirement age is not a new idea.  It is based on the premise that everyone is living longer and therefore should be required to work more years before collecting Social Security benefits.  This assumption is wrong on many levels.  First, in light of the adverse health impacts caused by obesity, drug and alcohol abuse, stress and other factors, it is far too early to tell if life expectancy, on average, is increasing at all or will continue to increase for future generations.

Additionally, life expectancy in the United States varies dramatically by gender, race and by income levels.  In general, women on average live longer than men and are more likely to end up living in poverty because they outlive their savings; Blacks and Hispanic Americans tend not to live as long as Whites; and those with lower incomes have significantly shorter life expectancies than those with the highest incomes.  Yet, those with lower incomes would be hit hardest by the benefit cuts from raising the retirement age because they rely the greatest on Social Security for most or all of their income.  Finally, simply because some workers might be living longer does not mean they can continue to work longer.  Many workers, especially those with physically demanding jobs, simply cannot continue working until their 70’s.  Even for those healthy enough to work, jobs for them may simply not exist.  While high-income professionals are often encouraged to continue working longer, few employers are eager to employ 69-year-old blue-collar or service workers.  In fact, older workers are typically among the first targeted for buy-outs or reductions in force when the economy contracts and are rarely recruited by employers absent a severe worker shortage.

The RSC proposal to raise Social Security’s retirement age would reflect a dramatic change for millions of American workers.  Instead of protecting future generations, raising the retirement age will dramatically cut benefits for workers who are not near retirement today, especially harming those at lower-income levels.  These younger generations of workers will find it even more difficult than their parents to save for retirement, as they confront continued stagnant wages and burdensome student loan debt.  The cuts will have their greatest impact on those who can afford them the least – lower income workers with a shorter life expectancy, who are less likely to be able to continue working to age 69 or 70.

Flattening Social Security’s benefits

In addition to criticizing the COLA for being too generous and too automatic and proposing to raise Social Security’s retirement age, the RSC budget proposes “changes to the primary insurance amount (PIA) benefit formula for individuals who are not near retirement and earn more than the wealthiest PIA benefit factor.”  Although the language is vague and implies this benefit cut would only affect the wealthiest workers, in fact the current top PIA benefit factor applies to workers with average lifetime earnings of only $85,000 per year (in today’s dollars).  The budget implies these workers are ‘the wealthiest’ Americans and can therefore afford the change.

In fact, this level of earnings more closely reflects the average middle-income worker than it does the uber-wealthy.  On average, 30 percent of today’s workers would see a benefit cut based on the RSC’s criteria, and the proposal would affect an even higher share of the workforce in states with higher average wages.  Under current law, these beneficiaries already have low replacement rates – the ratio of Social Security benefits to pre-retirement earnings – which makes it difficult for them to maintain their pre-retirement standard of living in retirement.  The RSC proposal would reduce these already low replacement rates even further.  The flatter benefits that would result from the proposal would also further break the link between a worker’s contributions and the benefits they earn.

It is worth noting that, in addition to the specific changes to the PIA, the summary the RSC released of their budget also includes language stating they propose “gradually moving towards a flat benefit”.  No specific proposal implementing this concept appears in the full budget document, so it is unclear whether the reference is simply duplicative of the changes to the PIA, which would also have the effect of moving toward a flat benefit, or whether an additional change leading to a ‘one-size-fits-all’ flat benefit amount is contemplated.

Eliminating auxiliary benefits

Two important auxiliary benefits provided by Social Security are insurance benefits for the spouses and children of retired workers.  For those ‘wealthiest’ workers whose benefits would be flattened by the change in the PIA formula mentioned above, the RSC budget also proposes phasing out these auxiliary benefits, again implying that these workers are wealthy enough not to need support for their spouses or minor children when these workers can no longer work.

The spouse’s insurance benefit is especially important to many families.  The spouse of a worker who retires may be eligible to receive a spouse’s insurance benefit equal to one-half of the worker’s retirement benefit.  Many spouses have no earnings or limited earnings because they have spent time out of the workforce to raise their children or provide caregiving to elderly or disabled family members, or due to their own poor health or limited job opportunities.  As a result of their lack of a work history, these spouses have not saved for their own retirement in employer-based retirement accounts such as 401(k)s or in Individual Retirement Accounts (IRAs), leaving them entirely dependent on any resources the family has managed to save and on their Social Security spouse’s benefit.

As discussed previously, the retirement benefits for the millions of workers whose spouses’ benefit would be eliminated by this proposal are already low compared to their pre-retirement earnings, and the overall cost of living for a two-person household is greater than for a one-person household.  Even with today’s spouse’s insurance benefit many of these retiree couples find it challenging to maintain an adequate standard of living.  If this benefit is phased out, this ability would be further reduced.

“Flattening” and privatizing the disability program

Previous RSC budgets included harsh changes to the disability program, and this new budget document itself is silent on how the RSC would change this important part of Social Security’s protections.  However, the summary outlines two specific changes to Social Security’s Disability Insurance (DI) program that would have a devastating impact on disabled workers.  According to the summary, the RSC would “convert DI payments to a flat benefit structure” and “expand access to private disability insurance”.  Both of these proposals were explicitly included in last year’s RSC Budget.

Changing DI to a flat benefit would hurt many disabled individuals.   Indeed, 64 percent of future beneficiaries would have their benefits cut under this proposal according to explanatory materials provided by the RSC to last year’s budget.  The proposal would also break the link between earnings and benefits.  Privatizing Disability Insurance would leave millions of disabled Americans to the whims of the private insurance market, which would be unlikely to provide sufficient coverage at anything approaching an affordable price.  Moreover, expanding private disability insurance to the almost universal coverage now provided by DI would be a very tall order.  Currently, only about 42 percent of private-sector workers have access to short-term private disability insurance, and only about 34 percent have access to long-term private disability insurance.

Cost Impact of Proposed Changes to Social Security

The RSC estimates the changes to Social Security envisions in its budget would cut benefits by over $1.5 trillion over the next decade, with $73 billion in cuts coming in the first year alone.  Although the budget document does not specify how the cuts in 2025 would be achieved, the only changes to Social Security that could generate ‘savings’ in the first year after enactment are cuts to Social Security’s disability program or a lower Cost of Living Adjustment (COLA).

Finally, despite the $1.5 trillion in cuts described in their budget, the RSC clearly states these changes to Social Security would only be the beginning.  The cuts they propose “will simply buy Congress time to come together and negotiate policies that can secure Social Security solvency for decades to come.”  In other words, the RSC considers $1.5 trillion in cuts to only be a downpayment toward more cuts to come in the future.

Republican Study Committee Budget Is Bad Medicine for Seniors


Unfortunately, the RSC budget is also very bad news for Medicare beneficiaries. The RSC proposes to cut Medicare over the next decade by an estimated $1 trillion, starting with over $30 billion in 2025.

The RSC’s core agenda is to hand Medicare to for-profit insurance companies and to shrink and evidential end traditional Medicare. Rather than preserving the guaranteed earned benefits enshrined in Medicare since 1965 – and expanding on these – the RSC would replace Medicare’s current reimbursement system with vouchers, and push seniors into private plans that can and do deny payment for services. The dollar amount of the voucher would likely decline year over year, since it would not be adjusted for health care inflation, and the value of the voucher and the “default option” would be tied to a private plan. Moreover, unlike in today’s traditional Medicare where beneficiaries can see the doctor of their choice, seniors in the RSC’s Medicare would be enrolled in private plans and could only seek health services from health care provider who are part of the plans’ limited network.

We already know what a privatized Medicare system would look like – our current Medicare Advantage (MA) plans.  While some MA plans do a good job of meeting seniors’ needs when they are healthy, in recent years a growing number have made it difficult to receive needed medical services as seniors become severely ill.  MA plans have consolidated their economic power, and this has been accompanied by a pattern of denying payment for high-cost services and treatments, which seniors who have chronic conditions typically need. The technique that private plans use to delay and refuse services they don’t want to pay for is known as “prior authorization”, and the Biden Administration is currently taking steps to try and curb these practices, not allow them to expand as would happen in the RSC proposal. When a private plan refuses to pay for medical treatments and services, Medicare beneficiaries may be targeted by bill collectors and coerced into paying out of pocket for drugs and treatments. The irony is that in many cases, these drugs and treatments are covered by traditional Medicare – they are services that their doctors have determined are medically necessary and, unlike in MA plans, patients are not denied coverage.

The RSC plan would also harm seniors because it would end Medicare drug price negotiations that are set to lower out-of-control medication costs, and halt the $35 cap on monthly insulin costs. Finally, it would soon limit total out-of-pocket Medicare drug costs for every senior across the country to $2,000 a year, starting in 2025.

Unlike President Biden’s FY 2025 budget proposal to safeguard Medicare for future generations by increasing taxes on wealthy people (over $400,000 in annual income) and on investors who can easily afford to pay more, the RSC budget does not assure Medicare’s solvency. Rather, it proposes to merge the three trust funds for traditional Medicare (the Part A hospital fund financed through payroll taxes, and the Part B fund for physician and outpatient services and the Part D fund, both financed through beneficiary premiums and general revenues).

Bottom line: the regressive RSC budget plan would push beneficiaries into private plans that prioritize profits over patients and doctors. It deserves to be rejected, and policymakers should be urged to look for ways to improve benefits in traditional Medicare – which are guaranteed.


The RSC proposes to end Medicaid

Taking a wrecking ball to Medicaid, the Affordable Care Act and the Children’s Health Insurance Program, the RSC plan proposes to slash these programs by $4.5 trillion – nearly 54 percent relative to current law over the next decade. If this were to actually happen, the number of Americans without any form of health care coverage would soar, and the health care system that we all count on – our hospitals, doctors’ practices, rehabilitation centers and treatment centers of all kinds — would be plunged into a state of crisis.

Medicaid would be transformed into five fixed block grant programs, each with deeply inadequate funding and covering different beneficiary groups.  This system ends up pitting equally deserving populations against each other — low-income children; seniors; people living with disabilities; pregnant women; and all other beneficiaries, including parents, would be competing against each other for limited resources. Under the current federal-state financial partnership, the federal government pays a percentage of Medicaid costs — whatever those costs are — for all Medicaid beneficiaries in all states. In contrast, the RSC approach would be to send states fixed amounts of federal Medicaid funding each year — irrespective of what actual costs are. The RSC block grant budget proposal also fails to take into account key economic factors such as recessions, disasters and emergencies, during which Medicaid enrollment typically rises, when funding the block grants decreases.

The states would find it impossible to find other sources of funding to fill the massive funding hole left after the withdrawal of federal funds, leaving them little choice but to slash enrollment. Medicaid would shrivel in size, and would no longer be available to millions of hard-working Americans who count on this essential safety net program in order to access hospital services and care from doctors, dentists and specialists. For the non-working population, including many seniors and people with disabilities, Medicaid’s vital long-term services and supports – particularly those delivered at home and in communities – could become extremely difficult – if not possible – to obtain. In turn, this would likely result in grave neglect and harm for older adults – precisely at the moment that America’s much discussed “age wave” is reshaping society.

The RSC’s Medicaid block grants would not be adjusted for health care cost growth annually, which is affected by the entry of new drugs and devices into the market, as well as general health care inflation. They would eliminate the use of provider taxes to raise Medicaid revenue, which nearly all states use to help finance a portion of their Medicaid spending. And without recourse to provider taxes, states would likely be unable to even draw down their assigned Medicaid block grant allocations, because they would be unable to generate sufficient alternative revenues (up to the federal funding cap).

Finally, the RSC block grants would mean that as Medicaid funding declined precipitously, many health care providers would not be paid for their services. Thus, the nation’s health care system could collapse, accompanied by a wave of closures of safety net hospitals, rural facilities, doctors’ offices and nursing homes across the country.

Medicaid Is Fundamental to the Health of Our Health Care System

For all of these reasons, the National Committee strongly rejects the RSC’s Medicaid block grants. Solutions to improving the reach and efficacy of Medicaid can be found in Senator Bob Casey’s (D-PA) Home and Community Based Services (HCBS) Access Act (S. 762), introduced in 2023. An identical bill in the House (H.R. 1493) was introduced by Representative Debbie Dingell (D-MI) to help states offer more HCBS to older Americans who want and need these services in order to age in place. In March 2024, the Biden Administration’s FY 2025 budget sent to Congress suggests that federal policymakers increase federal investment in home and community-based services by $150 billion, thereby enabling states to grow their optional HCBS programs. In addition, Senator Casey introduced the Long-Term Care Workforce Support Act in April 2024, which would direct more funding to targeted programs that aim to improve wages, benefits and advancement opportunities for the long-overlooked direct care workforce. None of these proposals would work under the RSC Medicaid block grant.

Other House RSC Budget Provisions That Would Make Life Harder for Lower Income and Middle Class Americans

The House RSC fiscal year 2025 budget would require that:

  • A Balanced Budget Amendment to the U.S. Constitution be adopted. A balanced budget amendment would require draconian spending cuts of such a magnitude as to force policymakers to severely slash Social Security, Medicare, Medicaid, and many other programs while opening the door to massive new tax cuts.  For more information, see our viewpoint paper on a Balanced Budget Amendment.
  • Make permanent most of the tax cuts in the Tax Cuts and Jobs Act (TCJA) of 2017. The Center for Budget and Policy Priorities (CBPP) says extending the TCJA would continue to mostly benefit the well-off and, if not paid for, would add considerably to the nation’s long-term fiscal challenges. Permanently extending the cuts would benefit households in the top 1 percent more than twice as much as those in the bottom 60 percent as a share of their incomes — providing a roughly $41,000 annual tax cut for the top 1 percent compared to $500 for households in the bottom 60 percent, on average — at a cost of around $300 billion per year. This would be on top of the large benefits high-income households will continue to receive from the 2017 tax law’s permanent provisions.
  • Change Congressional rules to increase the difficulty of collecting or raising taxes, even on the uber-rich. The combination of this proposal and making the Trump tax cuts (e.g., TCJA) permanent demonstrates that the RSC believes the wealthiest Americans deserve massive tax cuts while those earning $85,000 a year can afford to have their Social Security benefits cut.
  • The work requirement for Supplemental Nutrition Assistance Program (SNAP) participants (formerly known as Food Stamps) be increased from 55 to age 65. According to the CBPP, meeting basic life-sustaining needs should not be contingent on meeting a work requirement. And taking benefits away from people who don’t meet a work requirement does little to improve long-term employment outcomes, especially for those with the most limited employment prospects. Instead, it substantially increases hardship, including among people who are not expected to meet these requirements, such as people with disabilities, children and seniors.
  • Supplemental Security Income (SSI) would be converted to a block grant with phased-in state cost sharing. Currently, SSI is financed by general funds of the U.S. Treasury –personal income taxes, corporate taxes, and other taxes.  If the federal government were to convert SSI funding to a block grant and require states to shoulder an increasing share of the costs, states would be hard pressed to make up the difference.  SSI benefits are presently woefully inadequate for 7.5 million lower income Americans since they have not been increased since 1972.  The House RSC budget would only make this grave situation worse.
  • The Social Security’s Trust Funds be placed “on-budget”, a step that could lead to Social Security benefits being more easily cut to accommodate other federal spending priorities. Social Security was placed “off-budget” in 1983 to prevent the program’s growing surpluses from being used to finance other spending or tax cuts.  Now that the surpluses are being drawn down to finance the retirement of the baby boom generation, keeping the Trust Funds “off-budget” allows the program to pay the level of benefits earned by Americans during their working years, instead of limiting payments based upon an arbitrary budget cap every year.  Forcing Social Security to compete with all other programs funded by the government would break the link between workers’ contributions and the benefits they are paid. Because Social Security cannot borrow money (and therefore does not contribute to the deficit), Congress must act to restore the balance between contributions to the program and benefits earned before the surpluses are completely drawn down.  Keeping Social Security “off-budget” would make it easier to make adjustments without creating a direct impact on other federal programs.
  • The Older Americans Act Title V Senior Community Service Employment Program (SCSEP) be ended. Eliminating SCSEP would undermine the efforts of low-income older Americans trying to return to the workforce and would harm the local communities who have come to rely on the staffing provided by the program.