Analysis spotlights the lasting pain inflicted by Reagan’s Social Security cuts

Life expectancy in the U.S. fell during the same period that a Reagan-era law raised the retirement age by two years.

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SOURCECommon Dreams

In 1983, just before signing legislation that cut Social Security benefits, then-President Ronald Reagan declared that “we’re entering an age when average Americans will live longer and live more productive lives.”

But Reagan’s assumption of ever-rising life expectancy in the U.S. turned out to be false, according to a new analysis, a fact with painful consequences for those who saw their Social Security benefits pared back thanks to the 1983 law’s gradual increase of the full retirement age—the age at which one is eligible for unreduced Social Security payments.

As Conor Smyth wrote Monday for the People’s Policy Project, a left-wing think tank, the Social Security Amendments of 1983 hiked the full retirement age “from 65 in 2000 to 67 at the end of 2022.”

“What this actually meant was not that the age at which people could retire and start drawing Social Security benefits changed—that remained at 62,” Smyth explained. “Instead, by raising what’s called the full retirement age (FRA) by two years, the law effectively cut benefit levels across the board, regardless of the age that any particular individual began claiming Social Security benefits. The result is that those retiring at 62 today face a 50% greater penalty for retiring before the change than they would have before 2000.”

The 1983 law was an outgrowth of a special presidential commission headed by Alan Greenspan, a right-wing economist who would go on to serve as chair of the Federal Reserve for nearly two decades.

Smyth noted that before final passage of the measure—which cleared the House and Senate with bipartisan support, including from then-Sen. Joe Biden—”a popular argument for raising the retirement age was that life expectancy had increased, so people should work for longer.”

“The presumption was that the increase in life expectancy since Social Security’s implementation would continue as the retirement age rose. But, in reality, something peculiar happened,” Smyth wrote. “Over the same period during which the 1983 law forced the retirement age up from 65 to 67, life expectancy in the U.S. actually declined. In 2000, U.S. life expectancy was 76.8 years. According to data released last December, life expectancy in 2021 was 76.4 years. This was the second consecutive year of significant life expectancy decline.”

“That’s a drop of 0.4 years over a time span when the FRA rose by nearly two years,” Smyth observed. “So not only have Americans seen their benefits cut by an increase in the FRA, they now also face a particularly morbid version of a benefit cut in the form of shorter lives.”

(Image: People’s Policy Project)

The new analysis comes as some congressional Republicans are openly advocating further increases in the retirement age, with one GOP lawmaker recently declaring that people “actually want to work longer.”

In a policy agenda released last year, the House Republican Study Committee (RSC) echoed Reagan-era arguments in favor of raising the full retirement age to 70—a change that would cut Social Security benefits across the board at a time when many retirees are struggling to afford basic necessities.

The RSC agenda states that Republican legislation known as the Social Security Reform Act would “continue the gradual increase of the normal retirement age that current law has set in motion at a rate of three months per year until it is increased by three years for those reaching age 62 in 2040, 18 years from now.”

“This adjustment,” the document claims, “would begin to realign the Social Security full retirement age to account for increases in life expectancy since the program’s creation.”

President Biden and congressional Democrats have pledged to reject any proposed cuts to Social Security, which Republicans have threatened to pursue in exchange for a deal to raise the debt ceiling.

In addition to urging Biden and Democratic lawmakers to stand firm against Social Security cuts, advocates are calling on the president to embrace a Social Security expansion plansuch as the one recently proposed by Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts, which would fund benefit increases by raising the payroll tax cap so that wealthier Americans contribute a more equal share to the program.

“President Biden campaigned on a promise to expand Social Security’s modest benefits, while dedicating more revenue to it. Most Democratic senators and members of the House support that as well. Yet the mainstream media fails to take those proposals seriously,” Nancy Altman, president of the advocacy group Social Security Works, wrote in an op-ed for Common Dreams last week.

“If the Biden administration championed an expansion plan, unveiled at a White House event with major stakeholders in attendance,” Altman added, “that could not be ignored.”

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