If you receive, or one day will receive, Social Security, Medicare or Medicaid benefits—and that’s all of us, folks—you might want to pay closer attention to what’s being discussed here in Washington about these critical programs.
A few lawmakers—in some cases elected by you to represent your best interests in Congress—are talking seriously about making major changes to them.
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Here’s some quick background: According to the Peterson Foundation, a nonpartisan analyzer of the federal budget, the so-called “Big Three”—Social Security, Medicare and Medicaid, along with other mandatory spending programs for health programs—together gobbled up $3.7 trillion out of the government’s $5.9 trillion budget in fiscal year 2022, which ended Sept, 30. That’s a 62% slice of the pie. All other spending is considered “discretionary,” including big-ticket items like defense ($778 billion in 2022), which comes out of the remaining 38% of the budget.
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Social Security, Medicare and Medicaid are called “mandatory” programs because they’re not subject to annual approval by Congress. But shouldn’t things that eat up 62% of all federal spending now—a percentage certain to rise as Americans retire in droves—be subject to greater scrutiny?
This is what some Republicans have publicly suggested. And if the GOP takes over Congress after next month’s midterm election, they may try and do so.
One Senate Republican, Rick Scott—who represents Florida seniors—has said that instead of letting Social Security and Medicare putter along on autopilot, Congress should be forced to reauthorize them every five years.
Let me translate this. The guarantees that the federal government has made to you over the course of your working life about these programs? Scott is proposing that lawmakers decide every few years whether Social Security and Medicare are worth continuing in their present form.
Scott, who served two terms as Florida’s governor and went to the Senate in 2019, isn’t up for re-election this cycle. But Wisconsin’s Republican Sen. Ron Johnson is. In August, he said it was too bad that Social Security and Medicare is just automatically given to those who meet the qualifications—in other words, to those who have been paying into the system over their working lives.
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“If you qualify for the entitlement, you just get it no matter what the cost,” Johnson said. “And our problem in this country is that more than 70% of our federal budget, of our federal spending, is all mandatory spending. It’s on automatic pilot. It never—you just don’t do proper oversight. You don’t get in there and fix the programs going bankrupt. It’s just on automatic pilot.” He wants to end mandatory entitlements and subject to lawmaker scrutiny, just like other spending programs.
In general, I’m no fan of Scott or Johnson. But it’s worth pointing out something that I’ve mentioned many times in prior columns:
Social Security is currently paying out more than it is taking in. Its trust fund is projected to be exhausted by 2034. When that happens, retirees will get whatever can be generated by payroll taxes, and currently that’s projected to be about 77 cents on the dollar.
As for Medicare, the Kaiser Family Foundation notes:
Based on current projections from the Medicare Board of Trustees, the HI trust fund is projected to be depleted in 2028, six years from now. Although the HI (Medicare Hospital Insurance) trust fund depletion date is only one way of measuring Medicare’s financial status and doesn’t present a complete picture of total program spending and revenues, it does indicate whether there is an imbalance between spending and financing of inpatient hospital and other benefits covered under Medicare Part A (which provides inpatient/hospital coverage).
It’s not a political talking point, but an objective statement: Both of these giant federal programs are paying out more than they’re taking in. There have been periods over the last decade when Republicans controlled both chambers of Congress and the White House, and periods when Democrats have. And yet the central problem—more money going out than coming in—hasn’t gone away.
Scott and Johnson have given Democrats a big talking point here, though everybody knows that even if Republicans were to take both the House and Senate and then try and do something (i.e. cut) entitlements, President Biden would swiftly veto it. And there aren’t enough votes to override that veto—it takes a 2/3 majority in both chambers to do so.
Washington gridlock all but ensures that substantive changes to Social Security and Medicare would be hard to bring about. And yet the math that underlies these programs is what it is—and the clock continues to tick.