Senate GOP proposal contains a provision on Social Security and Medicare

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Among the package of bills being belatedly offered by Senate Republicans, dubbed the Heals Act, for the next round of coronavirus pandemic relief is one that has not received much attention in press reports.

It is Senator Mitt Romney’s attempt to revive President Obama’s National Commission on Fiscal Responsibility and Reform aka the “Simpson-Bowles Commission” on reducing the deficit from 2010, which made a series of proposals that included reducing social security benefits, which were never enacted because of strong public opposition.

Sen. Romney’s bill is the Time to Rescue United States’ Trusts (TRUST) Act of 2020, bipartisan bill to address looming funding shortfalls in several government trust funds. Romney, Manchin want new rescue committees to address trust fund solvency:

[A] bipartisan contingent led by the Utah Republican wants to establish “Rescue Committees” to write legislation providing 75 years of solvency for trust funds identified in a report to Congress from the Treasury Department. Examples of funds that would likely qualify include Social Security and the Highway Trust Fund.

As drafted, there would be a separate joint House-Senate rescue committee for each fund.

Backing the effort in the Senate are three of the most moderate members of the Democratic caucus: Sens. Joe Manchin III of West Virginia, Kyrsten Sinema of Arizona and Doug Jones of Alabama, along with Republican Sen. Todd Young of Indiana.

Companion legislation in the House is being led by Wisconsin GOP Rep. Mike Gallagher and Hawaii Democratic Rep. Ed Case, according to Romney’s office.

I smell the Pete Peterson Foundation aka Fix The Debt lurking behind this, just as it was with the Simpson-Bowles Commission.

We don’t need yet another commission to solve what is easily remedied.

For Social Security and Medicare, simply eliminate the $137,700 salary cap (2020) on wages, and impose a financial transactions tax (FTT) “on stock trades at 0.5 percent (50 basis points) and bond trades at 0.1 percent (10 basis points)” and “derivatives transactions taxed at 0.005 percent (5 basis points),” as Sen. Bernie Sanders has proposed. This would secure the solvency of Social Security and Medicare well beyond 75 years, and even allow for expansion of benefits.

The Highway Trust Fund is more problematic. It relies on the gasoline tax, currently levied at 18.4 cent per gallon, at a time when auto manufacturers are all converting their fleets to battery powered electric vehicles as they go green.

It is time to adopt a mileage tax based on the number of miles a vehicle owner drives. The so-called Vehicle Miles Traveled, or VMT fee, is being tested in states such as Oregon and Utah. Is a tax-by-mile system ready to replace fuel taxes? “The problem? Even its biggest backers say the federal government isn’t ready to rely on a VMT.” So this will take further study, I will concede, Mittens.

Bloomberg reports today, Stimulus Talks Could Snag on Social Security Review Panels:

The $1 trillion Republican stimulus proposal comes with a measure that could curb federal spending in the future by reducing costs tied to Social Security, Medicare and highway trust funds.

Among the bills that make up the GOP plan is one that would establish congressional review boards to examine the long-term solvency of the three trust funds, a topic that long has been politically fraught.

The Highway Trust Fund faces some of the most urgent shortfalls, with the Congressional Budget Office projecting it could run out of money by late 2021 or early 2022. Social Security could also face an inability to pay retirees in a timely manner starting in 2034, according to the Social Security trustees annual report.

Proponents of the measure, which include some Democrats, say that addressing the projected shortfalls now would prevent draconian cuts or tax hikes later. The legislation would create congressional panels mandated to draft bipartisan legislation that restores solvency of the trust funds, and the bills would receive fast-track consideration in each chamber.

“This is the right time to act. Our trust funds are approaching insolvency even more quickly because of the pandemic,” Senator Mitt Romney, a Utah Republican who is leading the effort, said Monday on the Senate floor. “It is far better to prepare and hopefully prevent a crisis than wait for a crisis to fall upon us.”

Hmmm, then maybe Republicans should not have been giving serious consideration to Donald trump’s proposed payroll tax holiday, which would have taken money from the Social Security and Medicare Trust Funds and not helped a single unemployed person in America.

The measure has bipartisan backing in the Senate, as well as support from some moderate House Democrats. However, it is facing opposition from House leaders who say the legislation is a roundabout way to cut Social Security benefits.

See the Simpson-Bowles Commission fiasco for context.

“The last thing struggling Americans need right now is a secret panel designed to slash their earned benefits and further undermine their economic security,” House Ways and Means Chairman Richard Neal, a Massachusetts Democrat, said in a statement. “I wholeheartedly object to the TRUST Act and will fight against its nefarious inclusion in any upcoming relief package.”

The measure’s inclusion in the stimulus is likely to be a point of contention between Republicans and Democrats as they hash out a compromise in the coming weeks that will address state and local funding, money for schools and extending expiring unemployment payments.

This bill is DOA in the House in the current coronavirus stimulus negotiations, but expect to see this bill again next year in response to the deficit spending currently being incurred as a result of the coronavirus pandemic. Republicans only find religion on deficit spending when a Democrat is in the White House.




10 COMMENTS

  1. Not to mention that Kyrsten Sinema used to be a tutu-wearing, radical NLG lawyer organizing against the war back in the day. Now she’s one of the most “moderate Democrats” – makes me sick.

    • Well, if she were still making fashion mistakes (that are wrongfully attributed to being liberal) and organizing against wars she would not have won a statewide election in Arizona. I strongly suspect that Mark Kelly might follow a similar path. I say this because he “endorsed” Joe Biden in response to TV attack ads that linked him to Bernie Sanders (despite there being no connection) and couldn’t wait to oppose Medicare for All.

      This is apparently the price we pay for a Senate majority, assuming we get one.

    • That’s the problem, there are too many “moderate” careerists like Kyrsten Sinema and not enough progressive leaders like Senator Professor Warren on the Democratic side in the Senate.

      • I’ve got to wonder why Warren didn’t endorse Bernie Sanders given their ideological alignment. Looked like a career move to me, betting on a shot at Biden’s VP.

        Not too many of these folks are the real deal. Not too many at all.

        • I believe the difference is that careerists like Kyrsten Sinema act on what they think is best for their career while leaders like Senator Professor Warren act on what they believe is best for the country as a whole.

          Who can blame the Senator Professor for not endorsing Bernie Sanders after he pretty much called her a liar during the debates.

          • Yeah, there was some disagreement about what Bernie said or didn’t say or thought he didn’t say. Maybe all our candidates should be less than 70 yrs old so they can remember things better.

            But I do think that income inequality, taxing the wealthy, student loan forgiveness, healthcare as a human right, etc…were more important and were also more in the interest of the country as a whole. Elizabeth didn’t have a huge percentage of the vote and Bernie did, at least in the beginning. She could have helped him as Buttigeig an Klobuchar helped Biden, but she chose not to despite the impossibility of her campaign. I have to believe that was a self-serving career move, one that may or may not pay off. It’s not unlikely that Biden will offer her something, just not VP.

          • I’ve known people in their ’80s who were sharper than others in their ’50s.

            I respectfully disagree that SPW’s lack of endorsing Bernie was self-serving, she has a track record of helping us “little people” as in the CFPB, in fact she supports our important issues. After a brief turn in the spotlight for eviscerating Mayor Bloomberg she was basically ignored by the MSM despite polling higher than some who were still highlighted.

            If Kamala Harris or any of the current contenders is offered the VP slot, is that a result of a self-serving career move for not endorsing Bernie?

            At this point my preferred line up is Karen Bass or Susan Rice for VP, Kamala Harris at AG and Inslee heading the EPA. SPW would be wonderful as Senate Majority leader as Chuck Schumer, for all his qualities, is not a “wartime consigliere”. And political war is going to continue no matter the election’s outcome.

          • “If Kamala Harris or any of the current contenders is offered the VP slot, is that a result of a self-serving career move for not endorsing Bernie?”

            No, Bernie and Elizabeth were the only progressive candidates that had viable campaigns.

            The candidate I liked the most was Julian Castro but I knew he wasn’t going to get any support. He dared to speak out about police brutality long before George Floyd was murdered and the Democrats wanted nothing to do with it. Just can’t risk those pro-police white “working class” voters who will vote for Trump anyhow.

  2. And to think that Tom O’Halleran supports this. That’s the problem with a lot of former Republicans, they switch parties yet carry the belief baggage they carried before switching. He really needs to be voted out of office next Tuesday.

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