By focusing on programs like Social Security, a group of Republican lawmakers hopes to balance the federal budget and reduce government expenditure.
If the plan becomes law, some seniors may experience a significant cut in lifetime payments.
Addressing Social Security Financial Challenges
According to Bloomberg, the plan was announced by US House conservatives on June 14.
Raising the full retirement age (FRA), at which seniors are eligible for their full benefits, is one of its key aspects.
A financial plan that would gradually raise the FRA to 69 years of age for seniors who reach 62 in 2033 was adopted by the 176-member House Republican Study Committee (RSC).
Depending on your year of birth, the legal retirement age is currently either 66 or 67. The FRA is 67 for all Americans who were born in 1960 or later.
According to Bloomberg, if the full retirement age is raised, workers expecting an earlier retirement benefit will have their lifetime benefits decreased.
Seniors who apply for benefits at age 62, when you become eligible, risk having their payouts significantly cut.
Before the Old Age and Survivors Insurance (OASI) Trust Fund of Social Security runs out of money, lawmakers from both political parties have been attempting to find a solution.
Read more: Taxation’s Effect On Diminishing Social Security Benefits
Potential Income Shortfall And Political Perspectives
Within the next ten to twenty years, that might occur. When that happens, payroll taxes will be the only source of income for Social Security, and those payments only cover around 77% of present benefits.
The GOP has mostly focused on reducing or privatizing Social Security, whereas the majority of Democrats want to strengthen the program by increasing payroll taxes or cutting benefits for wealthy Americans.
As GOBankingRates previously noted, House Speaker Kevin McCarthy (R-Calif.) recently told Fox News that this month’s debt ceiling bill was simply the first step in a larger Republican agenda that includes additional cuts.
Read more: Steps To Preserve Social Security Retirement Benefits