Watching leaders, many at or near retirement age, agree to do absolutely nothing to address this problem is an act of fiscal violence against younger Americans.
There were plenty of things to dislike in President Biden’s State of the Union speech, but the most grotesque moment actually was one of the most bipartisan: when both Republicans and Democrats stood with Biden to applaud the idea of not touching Social Security and Medicare, which both desperately need to be pared if there is any hope of the United States escaping a fiscal crisis.
The sequence began when Biden said, “Some Republicans want Medicare and Social Security to sunset,” triggering loud boos from Republicans, who from Speaker Kevin McCarthy on down have repeatedly said that they don’t want to touch the programs. The sliver of support for Biden’s statement comes from a bullet point from an agenda put out by Senator Rick Scott last year, which reads, “All federal legislation sunsets in 5 years. If a law is worth keeping, Congress can pass it again.” It is a sweeping statement that does not specifically mention Social Security and Medicare and that has not received broader support among Republicans.
Having received pushback from Republicans, Biden then pivoted to turning the moment into one of bipartisan agreement that the programs shouldn’t be cut.
“As we all apparently agree, Social Security and Medicare is off the books now, right, they’re not going to be cut?” he said. And as applause traveled from the Democratic to Republican aisle, he added, “We got unanimity.”
Biden continued, “Americans have paid in from the first paycheck they started.” This line perpetuated the myth that people who are collecting Medicare and Social Security benefits are merely taking out what they put in, even though in reality, in most cases, retirees will enjoy more benefits on the backs of current workers than they financed for the retirees of their generation. Biden then went on, “So tonight, let’s all agree — and apparently we are — let’s stand up for seniors! Stand up and show them: We will not cut Social Security! We will not cut Medicare! Those benefits belong to the American people. They earned it.” This was greeted by a standing ovation among both Republicans and Democrats, and including McCarthy.
As Guy Benson notes, Republicans may stipulate that the current position is being taken within the context of debt-ceiling negotiations. But this would be a more defensible line were Republicans showing any seriousness about reforming the programs outside of the debt-ceiling fight.
The flip side of sanctimoniously refusing to touch Medicare and Social Security in the name of protecting current seniors is that the failure to take action is punishing working-age Americans. Medicare and Social Security are already spending more money on benefits than they take in via taxes. Under current law, the programs can continue to offer full benefits, because there were years in which they generated a surplus of tax revenue that was used to finance other government priorities. However, at some point in the next presidential term, Medicare’s hospital program will have exhausted those prior surpluses — and Social Security will face the same fate in about a decade. At that point, absent action, Medicare beneficiaries will receive an automatic 10 percent cut, and Social Security beneficiaries will receive an automatic 23 percent cut. The only way to avert those cuts — which there seems to be a bipartisan consensus about — will be to change the law in a way that will ultimately shift even more of the burden onto working-age Americans.
The big picture in all of this is that debt is currently at the highest level as a share of the economy since World War II and on track to smash that record within the next decade. With the ballooning retirement-age population and rising health-care costs, Medicare and Social Security alone are expected to cost $29 trillion over the next decade, according to the Congressional Budget Office, or more than half of projected tax revenue. Watching political leaders, many at or near retirement age, agree to do absolutely nothing to address this problem is an act of fiscal violence against younger Americans.