The TRUST Act, introduced in multiple Congresses by Senator Mitt Romney (R-UT) and Representative Mike Gallagher (R-WI), would create so-called “Rescue Committees” that would draft legislation to address the solvency of federal trust funds, including the Social Security and Medicare funds. Once the respective “Rescue Committees” approve a trust fund bill, the legislation would receive expedited consideration in the House and Senate with no opportunity for amendment and little time for meaningful debate.
The existing Congressional Committees responsible for overseeing these critical programs, whose members and staff have the most experience and technical expertise to appreciate the impact of changes, would be relegated to being mere bystanders – having the ability to review the bills under extremely short time schedules but without any authority to amend the proposals. The bills would be brought to the House and Senate floors under fast-track procedures that would, again, allow limited time for the public to fully understand the impact of the changes and prevent any opportunity for improvements.
The TRUST Act does not specify how solvency would be achieved, thus opening the Social Security and Medicare programs to whatever broad array of cuts that the proposed “Committees” may choose to offer. In addition, the TRUST Act does not require its “Rescue Committees” to consider the importance of benefit adequacy during their deliberations. Given the growing number of working and middle-class Americans who depend on Social Security for all or most of their income in retirement and how Medicare benefit cuts would undermine the health security of seniors and people with disabilities, this creates a completely unacceptable one-sided approach to reforming these critical programs. The human impact of potential cuts could be disregarded and retirees degraded to the status of figures on a balance sheet, rather than individuals who have earned their benefits through a lifetime of hard work and who depend on those benefits when they are no longer working.
The process created is nothing more than a back-door mechanism for enacting cuts to these essential programs that would be extremely unpopular with the American people. Polling consistently indicates overwhelming support for Social Security and Medicare across party lines. In fact, recent surveys suggest that the public supports expanding Social Security and asking the wealthy to pay their fair share by adjusting the payroll wage cap. Proponents of the TRUST Act and other similar back-door proposals, however, have opposed raising more revenue to stabilize the finances of these programs over the long-term, insisting instead that they be cut. The specific measures proposed, such as raising the eligibility age for Social Security and Medicare, reducing Social Security’s Cost-of-Living Adjustment (COLA), privatizing Social Security or converting it into a welfare program rather than an earned social insurance program are extremely unpopular with the American people. The alternative to advancing specific cuts and allowing Americans full opportunity to weigh in on their acceptability is to establish procedural mechanisms that will force these unpopular cuts onto the American people while avoiding political accountability.
It is true that Social Security and Medicare face future financial challenges: Social Security’s Trust Funds will become depleted around 2035 and the Medicare Part A Trust Fund around 2028 if no changes are made to these programs. However, the appropriate avenue to develop and advance reforms is not to create “Rescue Committees” that design one-sided proposals focused on cutting the budget rather than providing adequate benefits, and then ‘springing’ the results on the American people. Instead, the committees with jurisdiction over these programs, the Ways and Means Committee in the House and the Finance Committee in the Senate, should hold hearings, develop legislation that has strengthening these programs for the American people rather than budget cuts as its primary mission, and vote on the consensus package that they develop under the regular rules of the House and Senate. Adhering to regular order, which many in Congress claim to support, would ensure that the public has an opportunity to express their overwhelming support for Social Security and Medicare and opposition to unpopular benefit cuts.
Establishing “Rescue Committees” to propose changes and fast-track procedures to rush them through Congress would not necessary if those promoting them were willing to address the outdated revenue side of these programs. Social Security, in particular, was created at a time when most workers received the vast majority of their compensation through wages. Since that time, wages for lower and middle-income Americans have stagnated, while top earners have found multiple alternative forms of compensation that allow them to avoid payroll tax contributions. Most working Americans still find all or most of their compensation is subject to FICA (the Federal Insurance Contributions Act), while the top-earners have only a fraction of their compensation covered under the payroll tax system. Eliminating that disparity by updating and modernizing how payroll taxes are applied would not only make the Trust Funds solvent for decades to come, it would allow Congress to also make long-needed improvements in benefits. Legislation achieving these twin goals has been introduced by numerous members of Congress.
Instead, proponents of the TRUST Act and similar budget-cutting mechanisms insist cuts are necessary for these programs that have been a financial lifeline for retirees for 85 years. One of President Franklin D. Roosevelt’s inspirations for establishing Social Security in 1935 was seeing American seniors literally living in poor houses. Today, the average Social Security retiree receives a modest $1,827 monthly benefit — or about $22,000 a year. Without Social Security, almost 40 percent of seniors in the wealthiest country in the world would fall into poverty. More than one-half of all beneficiaries rely on Social Security for all or most of their income. Cutting these modest benefits rather than asking the highest earners in our country to pay their fair share is not the right answer for American families.
Finally, the National Committee to Preserve Social Security and Medicare would like to offer a brief reminder to those who might support the TRUST Act or similar proposals because they believe establishing such “Committees” would be a benign way to get beyond the current debt limit crisis without damaging these programs. The Bowles-Simpson Commission, which was a key part of the most recent budget-cutting mechanism designed to fast-track unpopular changes to Social Security, only failed by a single vote. If not for one member committed to protecting America’s seniors and working families, a host of deeply unpopular and painful cuts would have emerged from the Commission’s deliberations and could have navigated through the fast-track process and become law. This would have left millions of today’s retirees with sharply lower benefits, pushing many into poverty. We have no way of knowing the composition of future committees or commissions, and whether any of their members would stand up for Social Security and Medicare in the face of the pressure to accede to benefit cuts. Fast-track commissions and committees are not harmless. They undermine the nation’s faith in Social Security and Medicare, and could easily result in deeply painful cuts to millions of working families in the name of fiscal austerity.