Fiscal conservatives continue to promote the narrative that Social Security and Medicare must be “reformed” to reduce the federal debt, which basically means cutting seniors’ earned benefits. The latest foray in this propaganda campaign came in the form of an ‘analysis’ piece from Bloomberg’s Karl W. Smith, published last week in the Washington Post.
“The financial stakes are high. Rapidly rising interest rates means now is the time to act, before the burden of servicing the debt to fund these programs becomes a major barrier to deficit reduction.” – Karl W. Smith, Bloomberg/Washington Post, 11/21/22
The focus on deficits and debt reduction is misleading. Social Security and Medicare Part A are self-funded by workers’ payroll contributions and do not contribute to the debt. In fact, the biggest driver of the federal debt is ‘tax expenditures,’ with the 2017 Trump/GOP tax cuts as a prime example.
The go-to solution, for Smith and others, is benefit cuts:
“The GOP wants to mitigate these costs by, among other things, raising the eligibility age for Medicare to match the Social Security retirement age, which is 67 for those born after 1960. In addition, Republicans would reduce Social Security benefits for those whose income was on the high end over their lifetimes and raise premiums for Medicare beneficiaries with higher incomes.” – Karl W. Smith, Bloomberg/Washington Post, 11/21/22
Raising the eligibility age for Medicare would leave tens of millions of seniors without insurance. (Republicans have also proposed changing the Social Security full retirement age from 67 to 70.) These are benefit reductions, plain and simple. Meanwhile, means testing Social Security in the way that Smith suggests would change the fundamental nature of the program, which has been working just fine for more than 80 years as a compact between workers and the federal government. In fact, a recent means testing proposal would have reduced Social Security benefits for people with average annual earnings of only $49,000.
It’s true that Social Security and Medicare face financing challenges that Congress must address. The Social Security Trustees project that, absent congressional action, the old age and disability trust fund will become depleted in 2035, with the Medicare Part A trust fund at risk of running out in 2028. Democrats have proposed (and in the case of Medicare, enacted) legislation to bring more revenue into both programs. But most Republicans refuse to consider revenue-based solutions, preferring to cut benefits. (Key members of the GOP proposed several drastic measures that would undermine Social Security and Medicare during the mid-term campaign season.)
Exhortations to cut benefits are part of a well-funded, right-leaning ideological movement to oppose government social programs, no matter how successful or popular. Not surprisingly, the author of the Bloomberg/Post analysis is previous Vice President of the Tax Foundation, whose “major funders include the conservative Koch Family Foundation and the foundation of the late Richard Scaife, a billionaire known as ‘the funding father of the right,’” according to Mother Jones.
Smith observes that “Republicans hoped that Americans would deliver a clear repudiation of President Biden’s economic policies when they went to the polls (in November).” But those hopes were dashed. Instead, voters in many states and districts rejected Republican, supply-side economics. Members of Congress would be wiser to listen to the voters – who support Social Security and Medicare by large, bipartisan majorities – than to columnists who preach austerity for the programs that protect our most vulnerable citizens.