What’s the difference between a trim, a cut or a jagged, painful gutting?
The Maine Democratic Party prompts such a question, thanks to a mailer it sent to homes in much of the state. It accuses Bruce Poliquin, the incumbent Republican in Maine’s expansive 2nd Congressional District, of "voting to gut your retirement benefits."
The flyer then breaks this down, saying Poliquin has "turned his back on us by:
"Voting to gut Social Security
"Supporting a raises in the retirement age and capping cost of living increases for Social Security.
"Voting to cut $500 billion from Medicare
"Voting for a tax plan that rewards his donors but adds nearly $2 trillion to the debt, and will force cuts to Social Security and Medicare."
That’s enough to make any retiree frugal, and by necessity, too. But it also appears to be overkill. Here’s why.
Some of the ad’s claims are based on a series of votes by Poliquin to approve tax cuts and a federal budget blueprint. Poliquin supported the Tax Cuts and Jobs Act of 2017, which reduced individual and corporate income tax rates. The Maine Democrats’ flyer provides footnotes to explain how this could affect Social Security and Medicare, and how the tax plan helped Poliquin’s donors.
The $1.5 trillion tax package was promoted as a way to propel the economy, because companies would have more money to invest and hire, and families would have more disposable income. Poliquin’s donors presumably supported the cuts, but it is impossible to say whether his retiree-donors — who have given more than $368,468 for his re-election — like them more or less than people behind the business PACs that have given him $1.25 million, or any other donors who helped make up his $3.6 million campaign chest, as of Sept. 30. The only thing certain about that is, according to the Urban-Brookings Tax Policy Center, about 45 percent of the tax cut benefits go to the top 5 percent of earners in the first year, and by 2027, 83 percent of the benefits go to the top 1 percent.
The tax cuts were paid for through borrowing, and that borrowing will help push annual deficits to over $1 trillion by the year 2020, the Congressional Budget Office says. The CBO agrees that the tax cuts will "increase the supply of labor and capital in the economy, thereby raising potential output." But counting interest, the tax cuts will nevertheless add a cumulative $1.9 trillion to the federal debt over the course of 10 years, the CBO projects.
Democrats said from the start that the loss of tax revenue was certain to bolster Republicans’ calls for cuts to Social Security and Medicare, which the GOP says are otherwise unsustainable. Together, they account for about 40 percent of all federal spending. In fact, in early December, 10 days before the House vote on tax cuts, U.S. News reported that House Speaker Paul Ryan said Congress would "have to get back next year at entitlement reform" in order to tackle the debt and the deficit.
The Democrats’ worries over this were bolstered recently when on Oct. 16, less than two weeks after the Maine Democrats approved their mailer and prepared to send it to homes, Senate Majority Leader Mitch McConnell said spending on the retirement programs would need to be contained. McConnell blamed federal spending, not the tax cuts, for the problem.
So how severe could this containment be, and would it amount to a gutting?
McConnell and other Republicans have discussed for several years the possibility of shrinking the growth of Social Security and Medicare, not gutting it. Based on public discussions, this would involve delaying or trimming benefits for future retirees, not current ones.
This leads to the second part of the Maine Democrats’ claim — that Poliquin "has turned his back on us" by "supporting a raise in the retirement age and capping cost of living increases for Social Security."
The Democrats cited a YouTube video from a 2011 breakfast speech to the Portland, Maine, Community Chamber of Commerce in which Poliquin, then the state treasurer, discussed a $4.3 billion shortfall in the state’s pension fund for teachers and state workers. To deal with it, he supported a proposal to limit cost-of-living increases for current retirees, require higher payments into the fund by those still working, and delay retirement — until age 65 — by workers there less than five years.
That was a state pension issue, not a Social Security one. In Maine, employees in the public pension system don’t pay into Social Security and generally don’t draw its benefits. But the next year, when Poliquin ran unsuccessfully in a primary for U.S. Senate, he was quoted in National Review as saying he had a plan for saving Social Security: "The way to do it is raise the retirement age for new entrants and also slow down the rate of growth of benefits."
The other part of the Democrats’ claim is that Poliquin voted "to cut $500 billion from Medicare." This is based on his vote in 2017 for a nonbinding House budget blueprint that laid out Republican priorities, including cutting $487 million from the growth rate of Medicare over a decade.
To make this cut, the House would gradually raise Medicare’s eligibility age, which is now 65, or lower than Social Security’s age for full benefits (which is now 66 and moving slowly to age 67). The Republican plan called for a "premium support" program, which means seniors would get a voucher so they could pick among private insurance plans or stick with traditional Medicare.
PolitiFact in 2017 looked at a similar proposal from Senate Republicans — who called for a Medicare cut of $473 billion — and determined it would provide the program with 5.5 percent less than if Medicare continued at its current projected spending rate.
The Maine Democratic Party said Poliquin "voted to gut your retirement benefits." Technically, Poliquin did not vote to do anything to Social Security, although a discussion about cuts is likely. As he said in 2012 of Social Security, "The way to do it is raise the retirement age for new entrants and also slow down the rate of growth of benefits."
Similarly, he voted for a budget blueprint that, while not binding, called for getting more insurers involved in Medicare, offering a "premium support" for it and gradually raising the program’s eligibility age.
PolitiFact is not pollyannaish. There easily could be slices and dices, which is partly why we have rated claims that referred to that possibility — claims based on the tax and budget bills — as Half True. But "gut" is a strong word and, based on what is known, goes too far. We rate claim Mostly False.'