Democrats are warning if Republicans take control of the Congress in next week’s election they will kill Social Security and Medicare. They won’t. At least not right away. Instead they prefer death by a thousand cuts.
They know they can’t kill these popular entitlement programs because Joe Biden or any Democratic president would veto anything they could pass. They also know that as doctrinaire as they may be, public opinion, even most Republicans, don’t want them to. Just ask President George W Bush, who celebrated his reelection victory in 2005 by announcing plans to use his “political capital” to privatize Social Security. He couldn’t even get a bill out of committee in a pre-MAGA Republican controlled congress.
Had he gotten his way and individuals were authorized to divert a portion of their Social Security tax to the stock market and private securities, millions of older Americans would have quickly lost their retirement nest egg and more in the 2008 recession that sent the stock market plunging.
So why are Republicans again looking to challenge the long-held axiom that Social Security is the third rail of American politics? President Dwight D. Eisenhower said those who would try to abolish Social Security “are stupid.”
One in four Americans — retirees, disabled, survivors — receive some form of Social Security benefits. This is an insurance program people have paid into all their working years, not some government handout.
Republicans have tried to kill Social Security since it was signed into law by FDR in 1935 with no success, but that hasn’t stopped them from trying with clocklike regularity. Maybe because they think it’s socialism.
Prominent Republicans have let it be known that they haven’t given up and plan to use Social Security and Medicare as hostages in their fight against raising the national debt limit. Their strategy is simple: meet our demands or we’ll shut down the government.
Mark Zandy of Moody’s Analytics predicted that such a move would mean “chaos in global financial markets,” sparking a financial crisis that could trigger a recession, see the GDP plummet, make unemployment skyrocket and the US default on debts.
Sen. Rick Scott (R-Florida) wants to sunset Social Security and Medicare after five years. If they’re “worth keeping, Congress can pass it again,” he explained. He knows a bit about Medicare. He was CEO of Columbia/HCA, a hospital corporation, that paid the Justice Department $1.7 billion in fines as part of one of the largest Medicare fraud cases in history. He took the Fifth 75 times in the investigation.
Social Security and Medicare are social insurance programs, known as entitlements, which also include welfare programs and unemployment. Congress is required to fund these, unlike annual discretionary programs.
Sen. Ron Johnson (R-Wisconsin) wants to end that. He has proposed reauthorizing Social Security and Medicare every year and privatizing the program.
Other Republican pseudo-reformers seeking to cut Social Security or repeal Medicare’s power to negotiate for lower drug prices for seniors and the disabled include Senators Marco Rubio of Florida, Mike Lee of Utah, Cynthia Lummis of Wyoming, Lindsey Graham of South Carolina and James Lankford of Oklahoma and at least five Senate candidates.
The Cook Political Report said 47 percent of Republican House candidates this year “actively support ending Social Security or Medicare as we know it,” the Center for American Progress reported. One in three seniors, low-income and disabled Americans depend on Social Security and Medicare.
“Reform” is a Republican buzzword for those thousand cuts. What would they look like?
The House Republican Study Commission, which includes most of the caucus, wants to raise the retirement age to 70 by 2040. It is currently 67 for those born since 1960. They’re talking of raising eligibility ages for some programs, limiting access to others, privatizing Social Security, withholding payments for those who retire early or have a certain income and cutting back on cost-of-living increases. Thanks to inflation, current recipients will be getting an 8.7 percent increase in benefits.
Rep. Steve Scalise (R-Louisiana), a prominent member of the RSC, said the group wants “shoring up and strengthening Social Security.” That reminds me of the Army officer who said a Vietnam village had to be destroyed in order to save it.
Here’s a warning. When Johnson, Scott and others say they don’t plan to cut any benefits, they’re really saying that they might exempt current beneficiaries, but not future ones.
The Republican strategy is to avoid a Biden veto by attaching their demands — like cutting entitlements, making the Trump tax cuts permanent, ending the Medicare drug program — to the debt ceiling renewal or other must-pass legislation.
Raising the eligibility age means reduced overall benefits for seniors because of their shorter life expectancy. Ending Medicare’s ability to negotiate prescription prices harms the elderly but is a big boondoggle for the drug companies.
The so-called reformers’ favorite excuse is to quote the Social Security and Medicare Boards of Trustees prediction that both trust funds could face depletion by 2033, suggesting that could mean reduction of benefits unless Congress acts. Privatizing is not the answer. Nor is raising eligibility terms.
If they want real reform, Congress could start by paying the same payroll tax as the rest of us. That means raising the maximum of earnings subject to taxation. It is now $147,000; Members of Congress are paid $174,000 a year. Besides most of them are millionaires or multimillionaires. Sen. Scott, who wants to sunset this insurance program, is worth over a quarter of a billion dollars, according to Wikipedia. Ron Johnson $78.5 million. Unlike millions of Americans, they don’t depend on Social Security for their livelihood.
The tax rate is the same for everyone, 6.2 percent on employees and on employers and 12.4 percent on the self-employed. Thus as income rises above $147,000, the percentage subject to taxation shrinks appreciably. So if the minimum went up just to the level of congressional pay, the folks who refuse to vote to subject themselves to the same tax as their constituents would be forking another $1,674 into Social Security.
Take that one step further. Let the wealthy pay the same rate as everyone else and broaden the categories of taxable income to include rental income and capital gains. With a bit of equality and fairness, the trust funds would be solvent into the next century and beyond. But the millionaires who make the laws and their wealthy friends and donors don’t want to pay their fair share of taxes. Instead, their best friends in Congress will once again try to kill it — and other programs critical to so many Americans who are struggling to survive in a turbulent, uncertain economy — by a thousand cuts in funding and eligibility.