Cut to Social Security benefits plausible, not guaranteed

The claim: President Joe Biden said Republicans intend to chop Social Security.

“I thought (Republicans) agreed not to do this a couple times,” Biden said Nov. 27 during a White House event. “But they’re back at it. Average benefit cut would be 13%.”

Almost 67 million Americans this year will receive Social Security payments, totaling about $1 trillion. Many older Americans rely on the benefits to pay their basic living expenses.

People can start receiving Social Security retirement benefits at age 62, but full benefits kick in when they reach full retirement age, which is 67 for anyone born 1960 or later.

Social Security is funded through the payroll tax; that revenue is put into trust funds to pay for current beneficiaries. These trust funds could be depleted as early as 2032 if further action is not taken. That could mean that in about a decade, monthly checks could be reduced by about 23%.

But because of its widespread support among older Americans — who usually have the highest voter turnout — Social Security has long been known as the “third rail of politics.” Many politicians in both parties are reluctant to broach major structural changes.

PolitiFact ruling: Mostly False. A Republican Study Committee proposal from June would result in cuts to beneficiaries from a combination of a higher retirement age and formula changes, though the proposal said current retirees and those nearing retirement age would be exempted. Experts found the 13% cut Biden cited to be speculative, but plausible — but there isn’t enough detail to really know.

Also, this is one Republican faction’s plan, not something universally adopted by the party, and it’s far from guaranteed to be passed in the House, let alone in the Senate. And Biden’s framing also ignores that his own policy, which is essentially to continue the status quo, threatens even bigger across-the-board reductions by the early 2030s.

Discussion

In its 167-page fiscal year 2024 budget proposal, the Republican Study Committee backed some changes to Social Security’s structure that it said would preserve the program’s fiscal health.

The group said it would “make modest changes” in the benefit formula for “individuals who are not near retirement” and are on the income scale’s higher end. It also said it would make “modest adjustments” to the retirement age for full benefits “to account for increases in life expectancy.” And the budget said it would phase out “auxiliary benefits” for high earners.

The proposal would cut benefits, at least for some people.

In its proposed budget, the Republican Study Committee emphasized that its proposal “does not cut or delay retirement benefits for any senior in or near retirement,” and Biden did not repeat this caveat.

However, the flip side of the group’s pledge is that younger Americans would see reductions under the group’s plan.

In an analysis of the proposal for PolitiFact, the Committee for a Responsible Federal Budget — a fiscally hawkish group that tracks budget matters — said it is “generally true that an increase in the full retirement age is roughly equivalent to an acrossthe-board cut in benefits.”

For instance, if people want to retire at 67, but the age for receiving full benefits is raised to 69, they can still choose to retire at 67, but if they do, they will have to accept a lower monthly payment than before the age was raised.

Future beneficiaries’ payments could be cut further depending on their income and other factors.

The White House told PolitiFact that the 13% figure originated in a table the liberal Center for Budget and Policy Priorities published.

In the table, raising the retirement age from 67 to 69 would reduce an “illustrative monthly benefit” from $1,000 to $867, which is a 13.3% cut.

The paper was last updated in 2020, but Paul Van de Water, a senior fellow at the Center for Budget and Policy Priorities, said the math it uses is “still applicable.”

However, the Committee for a Responsible Federal Budget urged caution.

“There both isn’t enough detail to say what the full (Republican Study Committee) plan is, and there also isn’t a comprehensive assessment of the full plan to say what the average cut would or wouldn’t be,” the group told PolitiFact. The Republican Study Committee did not answer an inquiry for this article.

The Republican Study Committee’s membership includes about 80% of the House Republican Conference, which holds a narrow majority in the chamber. But this doesn’t mean the Republican Study Committee’s plan is an official plan for all Republicans — nor would it be a slam dunk to pass.

It’s one proposal from one faction, albeit a sizable one, within the House Republican Conference. Given the political sensitivity of Social Security and that onefifth of House Republicans aren’t bound by the Republican Study Committee’s plan, it could face trouble on the floor, if it gets that far.

Also, Democrats control the Senate narrowly, and it’s not clear that the Republican minority in the chamber would close ranks behind such a plan.