I’m an Economist: 6 Predictions for Retirement Based on JD Vance’s Politics
Written by
Heather Altamirano
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T. Woods
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Though in today’s political arena, the vice presidency may feel like more of an emeritus position, that doesn’t mean that the second in command can’t impact your wallet, especially in retirement. Vice President JD Vance, a former senator and successful memoirist, has a few views on retirement issues you should know about.
GOBankingRates asked experts to weigh in on how his politics could affect your retirement plans.
Social Security
In an interview with the New York Times, Vance indicated he was against cutting Social Security. Cheryl Smith, economist and portfolio manager at Trillium Asset Management, notes that Vance hasn’t given a detailed plan for improving the program that many retirees rely on.
“Vance has expressed support for maintaining Social Security coverage for elders but has offered very little practical proposals as to how we would do that,” she told GOBankingRates. “He has indicated that he is against privatization, a positive for retirees. His clearest proposal is to help fund Social Security by raising labor force participation, possibly by limiting or reducing disability benefits, or unemployment benefits, or by mandating later retirement ages.”
This is a hot-topic issue Vance has shifted on. In regard to Social Security reform, recently, he said on Fox and Friends, “You look at people who are 150 years old who are fraudulently collecting Social Security payments. You see our Social Security system — 40% of the people who are calling are actually committing fraud. That means the 60% who need their Social Security checks are waiting in line.”
It’s important to note that this statistic has been debunked and considered a false claim. As with much of the Trump administration, try to navigate between what is considered fraud and what is just something they aren’t big fans of. Still, Vance does seem to want to make filing for Social Security a bit stricter. This could pose some difficulty for some older seniors.
Healthcare
Another pressing issue for seniors is healthcare, but it’s unclear where Vance stands on the Affordable Care Act. This is another instance where he hasn’t given a plan, Smith explained.
“He has argued that the U.S. healthcare system was broken before the ACA, and has opposed completely repealing the ACA, as well as arguing that retirees should continue to have a choice, for example, between Medicare Part D and traditional Medicare,” Smith stated.
She continued, “He has expressed sympathy for the needs of retirees and argued that the country needs to ensure that seniors have access to the coverage they need.”
Smith added, “However, his changed position on Trump, and Trump’s expressed antagonism to the ACA, suggests that Vance’s position may not be solid enough to prevent a Trump administration effort to dismantle the ACA. This does not provide comfort to retirees.”
More Control with the Fed’s Interest Rate Policy
Trump has been open about wanting more of a say on the Fed’s interest rate policy, which Vance supports, but economists have concerns.
“The Federal Reserve is nominally apolitical, although the fact that the FOMC Chairman testifies before Congress twice a year and that some members are politically appointed puts some of that neutrality in question,” Dr. Peter C. Earle, Senior Economist at The American Institute for Economic Research said.
“Allowing the US President to exert direct influence upon the Federal Open Market Committee, or to serve directly on it, would undermine both the spirit and letter of the Federal Reserves’ independence stipulation, which is viewed as critical for maintaining objective policymaking and long-term economic stability,” Earle added.
Other issues would also arise if presidents could influence the Fed’s interest rate policy.
“If a U.S. President had a say in FOMC decisions, it could lead to policies that favor short-term economic boosts, such as lowering interest rates to stimulate growth before an election, resulting in long-term inflationary pressures, price distortions or even systemic financial instability,” Earle explained.
In addition, “The politicization of monetary policy could lead to economic and financial volatility, with inflation spikes or financial bubbles becoming more likely as the market reacts to politically animated decisions rather than sound, balanced policy direction,” Earle stated.
This would impact the entire country, including retirees, who would be at a greater risk because of their fixed incomes.
“If the FOMC were directly influenced by political considerations, the inflationary bias of the Federal Reserve would inevitably become more pronounced, with purchasing power eroding more quickly due to rising inflation,” Earle said.
He continued, “Budgeting for a fixed income would also become more difficult as price changes become increasingly less predictable. In the long run, such trends would compromise the financial security and quality of life of countless millions of retirees across America.”
Prescription Drugs
In a 2022 AARP interview, Vance supported lowering the price of prescription drugs for seniors.
“Vance has supported allowing Medicare to negotiate prices on drugs, as well as advocating allowing U.S. companies to import prescription drugs from outside the U.S.,” Smith stated.
“Both of these policies should benefit retirees, generally more intensive users of prescription medication than the younger population. Economically, both drug price negotiation and allowing U.S. drug prices to approach the prices outside the U.S. borders are positives for retirees as well as for the rest of the population.”
Tariffs
Tariffs have been another tumultuous issue for the White House administration. Though there has been a lot of back and forth between what the president can legally do, there has been a recently implemented complex tariff structure. Here are a few key takeaways:
- This includes a universal 10% tariff on most imports, but several exceptions and specific rates exist for certain countries and products.
- Imported cars and auto parts face a 25% tariff, and some goods from China are subject to higher rates, including a 30% tariff.
- Section 232 steel and aluminum tariffs are also in place, some with increased rates
“For almost all cases, the imposition of a tariff results in consumers being worse off, generally paying more for any given item AND buying less of it,” she explained.
She said, “Vance argues that tariffs can have a dynamic effect of returning production to the United States, thereby raising wages and making the U.S. better off. Note that this has a strong distribution effect; all consumers will pay the higher prices, but even if we assume that the tariff actually results in additional jobs in the U.S., only working people would benefit from the higher wages.”
Smith pointed out that an increased tariff tax would harm seniors.
“Retirees will not have any offset to the additional tariff costs. Vance’s support of increased tariffs is a clear negative for retirees.”
Caitlyn Moorhead contributed to the reporting for this article.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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