The first half of the Trump administration is over, so it’s an opportune time to evaluate how older Americans have fared under the president’s policies over the past two years. As someone who reports and writes frequently (and without a political bias) about public policy and people 50+, I’ve just scrutinized the president’s actions regarding experienced workers, retirement security, Social Security, Medicare, health insurance and the “fiduciary rule” for investors.
I believe President Trump and his administration deserve praise in some areas, but not in others, as you’ll see below. Overall, I’d give Trump a C.
Here’s why this matters: The public policy infrastructure to support America’s elders is frayed, ranging from an expensive and porous long-term care system to an inadequate retirement savings system to worries about Social Security’s finances. “In coming decades, many forces will shape our economy and our society, but in all likelihood no single factor will have as pervasive an effect as the aging of the population,” the former Federal Reserve Board Chairman Ben Bernanke once said.
Given the significance of this demographic trend, you might think retirement security, Social Security reform, support for family caregivers and similar age-friendly initiatives would have risen to the top of the legislative agenda in Washington, D.C. during the past two years. You’d be wrong. Older Americans have been mostly invisible to the Trump administration. Says Howard Gleckman, senior fellow at the Urban Institute:“Aging wasn’t on the radar screen.”
Here’s my assessment and my grades, which are subjective:
Thanks to the long economic expansion, the unemployment rate among people 55 years and over has dropped sharply. When Trump entered the White House, the unemployment rate for 55+ workers was 3.7 percent. It fell to 2.9 percent in December 2018, surprising some analysts. “The unemployment rate is unbelievably low,” says Teresa Ghilarducci, professor of economics at the New School for Social Research and the Director of the Schwartz Center for Economic Policy Analysis. “I never expected to see unemployment this low.”
The low unemployment rate reflects the economic expansion that began during the Obama Administration. (The current expansion is the second longest on record; it will become the longest if it lasts to July 2019.) Nevertheless, there’s little doubt the massive fiscal stimulus from the corporate tax cuts championed by Trump and Republicans in Congress boosted the economy in 2018 and pushed the unemployment rate for experienced workers to extraordinarily low levels, although the effect of the stimulus is now subsiding.
Thanks to the Age Discrimination in Employment Act, age discrimination has been illegal for more than half a century. Yet experienced workers often find themselves witnessing, or facing, age discrimination. Enforcing the law against age discrimination is the responsibility of the U.S. Equal Employment Opportunity Commission (EEOC) and the EEOC’s Acting Chair, Victoria A. Lipnic, has somewhat surprisingly used her bully pulpit often, and effectively, to highlight the injustice of age discrimination.
“Age discrimination is an enforcement priority for the commission,” she told me in a Next Avenue interview last year. One example: the agency reached a $12 million settlement with the Texas Roadhouse steakhouse chain, which agreed to change its hiring and recruitment policies towards older applicants.
Although the EEOC could be more aggressive in bringing age discrimination cases, bravo to Lipnic for her commitment.
The Administration has taken modest steps toward improving retirement security.
For instance, President Trump told the U.S. Department of Labor and Department of Treasury to consider raising the age when people with traditional Individual Retirement Accounts and 401(k)s must start making their Required Minimum Distributions (currently 70 ½); detailed proposals are expected early this year.
Trump also wants to make it easier for small businesses to offer retirement plans to employees, through an executive order, which is a step in the right direction.
That said, the executive order may well get trumped by several bipartisan bills on the Hill. The most notable bill is the Retirement Enhancement and Savings Act, or RESA. It would nudge more small employers to come together to offer 401(k)-type plans and encourage 401(k)-type plans to offer participants annuities in retirement.
Bills like RESA died at the end of last year’s legislative session and are likely to be revived this year. They “will help some people,” says M. Cindy Hounsell, president of the Women’s Institute for a Secure Retirement in Washington D.C. “They won’t be a fix for everybody.”
President Trump kept his campaign promise to leave Social Security alone. Problem is, two years have gone by without steps taken to bolster Social Security’s finances. The Social Security trust fund is predicted to run out of money in 2034. If Washington does nothing, the system will have only enough money coming in from payroll taxes to fund about three-quarters of scheduled benefits.
“We have done nothing to put more revenue into Social Security,” says Ghilarducci. “The chance we will only pay three-quarters of Social Security benefits has gotten bigger.”
Policy mavens may look back at 2018 as a landmark moment for Medicare. President Trump signed a law known as The CHRONIC Act (Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act) as part of the larger Bipartisan Budget Act of 2018, although credit really goes to Congress in a striking moment of bipartisan support.
“It’s potentially the biggest change in Medicare since Part D,” says Gleckman, referring to the Medicare prescription drug benefit signed into law in 2003 by President George W. Bush. “For the first time, it breaks down the wall between medical care and services like delivering food.”
The law allows Medicare to cover more services for chronically ill patients. Enrollees in Medicare Advantage plans can get reimbursement for non-medical benefits to improve their quality of life, such as wheelchair ramps. The law also extends a pilot project that lets Medicare patients get physician services at home. Critical regulatory rules will roll out this year and next and the devil is always in how such rules are crafted.
Grade: B+ (Hopefully, that grade will rise as the administration’s Centers for Medicare and Medicaid Services write the rules.)
The Trump administration may have failed to repeal the Affordable Care Act (ACA), but it has used its regulatory authority to undermine the program. The group most vulnerable to the administration’s war on ACA: people 55-to-64.
That’s because the administration has moved against premium limits for that age group. It also rejects the idea of minimum benefit requirements for health insurance plans, determined to eliminate in practice the ban on insurers denying people coverage due to pre-existing conditions. By the time most people reach their 50s and early 60s, they have some kind of pre-existing condition.
The ACA was declared invalid by U.S. District Judge Reed O’Connor. He stayed his ruling to allow for appeals.
The Fiduciary Rule and Investors
The Trump administration successfully buried the Labor Department’s so-called fiduciary rule. This rule, proposed by the Obama administration, said that brokers and advisers who manage retirement accounts must adhere to the fiduciary standard and put clients’ interest first to eliminate conflicts of interest and promote transparency.
Large segments of the financial services industry don’t want to be held to the fiduciary standard. They preferred sticking with the “suitability” standard which says advice must be suitable for clients after taking into account factors such as age and income. The suitability standard only requires disclosing conflicts of interest.
Gary Cohn, the former Goldman Sachs executive and Trump’s former head of the White House National Economic Council told The Wall Street Journal he thought imposing the fiduciary standard was “a bad rule.”
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- What Protects Investors More Than The Fiduciary Rule
- What the Trump Retirement Security Executive Order Means for You
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