On Monday, Senate Republicans, led by Senator Mitt Romney (R – Utah), unveiled their Time to Rescue United States Trusts Act (TRUST) which purports to restore and strengthen federal trust funds, i.e. Social Security and Medicare. The TRUST ACT is a sub-provision of the HEALS ACT, the Republican coronavirus proposed relief bill. Congress is currently debating a second stimulus package in response to the coronavirus pandemic. These bills could possibly extend unemployment benefits and provide a second round of stimulus checks.
The TRUST Act calls for creation of committees to shore up the programs and control debt over the long term. Bills advanced by the committees would be fast-tracked. The non-profit group, Social Security Works attacked the GOP proposal as a closed door attempt to cut Social Security. Group President, Nancy Altman, says “It is a way to undermine the economic security of Americans without political accountability.” She also accused Republicans of using the pandemic as cover for slashing Social Security.
Senate Republicans claim the Social Security, Medicare and federal highway trust funds are doomed to run out of money in the next few years. Democrats claim the recent tax cuts ran up the national debt; thus stoking the fires of trust fund insolvency. Republicans claim the COVID-19 pandemic has created an insolvency crisis that may occur much sooner. The solutions involve raising taxes, cutting benefits or some combination of both.
The Social Security Trust Fund, the largest of the reserves, has $2.9 trillion today. Social Security trustees stated earlier this year that Social Security risked being insolvent by 2035. If no changes are made, scheduled tax revenues will be sufficient to pay only about three-fourths of scheduled benefits after depletion. Social Security provides more than half of the income for two-thirds of all American seniors.
The TRUST Act solvency legislation would allow for bipartisan committees to draft legislation to restore solvency. These bills would be fast-tracked in Congress, not subject to amendment and would need only 60 votes in the Senate to pass. Republicans counter that only when the solution of the committee gets majority support would it advance to a floor vote in the house. Then it would compete, as any other bill, for passage.
House Ways and Means Committee Rep. Richard Neal, (D – Mass) said in a statement that Romney’s bill “will result in far-reaching cuts to Medicare and Social Security – that is the intention of the bill.” Cutting Social Security and Medicare benefits has long been a desired plan of hard-line conservatives who value lower taxes and fewer government programs. Groups that rely on and support Social Security’s retirement, disability and healthcare programs worry that the stimulus package will contain a poison pill destined to slash programs on which so many Americans rely.