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House GOP eyes Social Security, Medicare amid spending battle

The Washington Post logo The Washington Post 6 days ago Tony Romm
The GOP is pushing to cut federal spending, and some Republicans want to discuss possible changes to Social Security and Medicare. Above, Speaker Kevin McCarthy (R-Calif.) addresses the House. © Evelyn Hockstein/Reuters The GOP is pushing to cut federal spending, and some Republicans want to discuss possible changes to Social Security and Medicare. Above, Speaker Kevin McCarthy (R-Calif.) addresses the House.

House Republicans have started to weigh a series of legislative proposals targeting Social Security, Medicare and other entitlement programs, part of a broader campaign to slash federal spending that could force the new majority to grapple with some of the most difficult and delicate issues in American politics.

Only weeks after taking control of the chamber, GOP lawmakers under new Speaker Kevin McCarthy (R-Calif.) have rallied around firm pledges for austerity, insisting their efforts can improve the nation’s fiscal health. They have signaled they are willing to leverage the fight over the debt ceiling — and the threat of a fiscal doomsday — to seek major policy concessions from the Biden administration.

So far, the party has focused its attention on slimming down federal health care, education, science and labor programs, perhaps by billions of dollars. But some Republicans also have pitched a deeper examination of entitlements, which account for much of the government’s annual spending — and reflect some of the greatest looming fiscal challenges facing the United States.

In recent days, a group of GOP lawmakers has called for the creation of special panels that might recommend changes to Social Security and Medicare, which face genuine solvency issues that could result in benefit cuts within the next decade. Others in the party have resurfaced more detailed plans to cut costs, including by raising the Social Security retirement age to 70, targeting younger Americans who have yet to obtain federal benefits.

“We have no choice but to make hard decisions,” said Rep. Kevin Hern (R-Okla.), the leader of the Republican Study Committee, a bloc of more than 160 conservative lawmakers that endorsed raising the retirement age and other changes last year. “Everybody has to look at everything.”

Any plan to rethink entitlements is likely to face steep opposition in the Democratic-led Senate and may never gain meaningful traction even among other Republicans in the House. Adding to the political challenge, former president Donald Trump waded into the debate Friday, warning his party publicly against cutting “a single penny from Medicare or Social Security.”

Democrats, meanwhile, have been unsparing in their criticisms, saying millions of Americans could see their benefits cut at the hands of the new House GOP majority. President Biden has stressed he will not negotiate such a deal with Republicans, as he prepares to discuss a raft of fiscal issues with McCarthy in the coming days.

Speaking to reporters Tuesday, White House press secretary Karine Jean-Pierre said she had no update on the timing of a meeting with McCarthy. But she repeated Biden’s belief that the debt ceiling should be addressed “without conditions.” The president himself later blasted the GOP for being “genuinely serious about cutting Social Security, cutting Medicare,” adding: “Look, I have no intention of letting the Republicans wreck our economy.”

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The early wrangling underscores the stakes as Republicans look for aggressive ways to limit federal spending. In a time of immense, growing debt, the party’s looming decisions could carry vast consequences: Every cut in Washington, large or small, threatens to spell dramatic changes for millions of Americans’ finances — not to mention the GOP’s own political fortunes.

“We need to be taking this very, very seriously, and the tragic thing is, everybody knows it,” said Rep. Vern Buchanan (R-Fla.), a top lawmaker on the tax-focused House Ways and Means Committee, lamenting the state of Social Security and Medicare.

But, Buchanan said, the early political sniping around the issue threatens to make any meaningful overhaul impossible. He stressed the two parties have to work together, or else Republicans could face a political drubbing if they forge ahead on their own.

“It’s a good way to get fired quickly,” he said.

For the moment, Republicans are only beginning to plot a new fiscal road map. To maximize their leverage, they have pursued spending cuts in exchange for their support to raise the debt ceiling, the legal cap that allows the U.S. to borrow money to pay its existing bills.

Unless Congress enacts a new limit or suspends the current one, the government is set to breach the threshold sometime this summer, which would trigger a historic, calamitous default that could thrust the economy into a recession. Last week, the Treasury Department began taking what it calls “extraordinary measures” to avoid hitting the cap, which could sustain the government until at least early June.

Hoping to engage top Democrats and the White House, GOP leaders have offered early hints of the deep cuts they seek: Some Republicans have suggested they want to pare back spending to levels approved in the 2022 fiscal year, meaning cuts across government could exceed $130 billion. Others have eyed new caps on key federal agencies and programs, hoping to keep domestic spending depressed for the next decade in ways Democrats have described as devastating.

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Yet GOP leaders have not said exactly what they’d cut, or whether some areas might be off-limits, including money for the military and its veterans. Instead, they have promised to produce a blueprint in the coming weeks that balances the budget over the next 10 years.

But balancing the federal till is no small feat — previous Republican majorities that passed measures to eliminate the deficit used gimmicks and other fiscal wizardry, and they only achieved a balanced budget on paper. This time, the task is especially immense, potentially requiring the GOP to identify more than $14 trillion in cuts through 2032, according to the Committee for a Responsible Federal Budget, which advocates for reducing the deficit.

So far, the cuts that Republicans have considered represent only a fraction of the government’s overall ledger, which also includes mandatory spending — the category that encompasses Social Security, Medicare, Medicaid, food stamps and a wide array of other federal payments that totaled more than $4.8 trillion in outlays over the 2021 fiscal year, according to the Congressional Budget Office (CBO).

Social Security and Medicare are funded through payroll taxes collected from employers and employees. The programs are popular, and for many Americans, they are a financial lifeline: In 2022, an average of 66 million seniors received a Social Security check each month, according to the federal government; more than 59 million people are enrolled in a Medicare plan, recent private estimates show.

But these entitlements face annual shortfalls, especially as the number of retired Americans grows faster than the two programs’ dedicated tax revenue. The complicated fiscal picture has led CBO to conclude that Social Security could exhaust its trust fund by 2033, at which point it would become insolvent, potentially resulting in a 23 percent cut to seniors’ monthly checks unless Congress intervenes. For Medicare, meanwhile, its key hospital-focused trust fund faces a similar problem in 2028, risking payments toward Americans’ health care, according to its trustees.

“That would represent a substantial reduction in payments to Social Security beneficiaries, many of whom have very modest income and would face real hardship if their benefits had to be cut back sharply at one fell swoop,” said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, a left-leaning think tank.

The looming deadlines have emboldened some Republicans in Washington to take a look at the two programs, which are considered to be the third rail of American politics. GOP lawmakers have been counseled by a wide array of right-leaning groups, including the Heritage Foundation, that the new majority should consider significant changes to entitlements as part of their commitment to cutting spending and balancing the budget. But historically, the organization has argued against tax increases — and in a new statement on Tuesday, it did not endorse cuts to mandatory spending in the context of the debt limit.

“You don’t get out of our current situation without tackling entitlement programs,” said Rachel Greszler, a senior research fellow at the Heritage Foundation, noting the country is getting “closer and closer to the date of insolvency.”

In an early sign of their interest, House GOP leaders initially included “mandatory spending” as a legislative priority during a meeting with rank-and-file lawmakers earlier this month. But Republicans did not mention explicitly what they hoped to address with Social Security and Medicare. An aide to Rep. Jason T. Smith (R-Mo.), the new chairman of the Ways and Means Committee, only said this week that “tying those programs to the debt ceiling has not been a part of any conversation” he has had.

Other GOP leaders have ruled out direct cuts for seniors currently collecting benefits, leaving the door open for discussions about other legislative proposals.

“You’ve got to protect Medicare and Social Security. And the path the Democrats are going, they are going to go bankrupt,” McCarthy told reporters last week. “Let’s sit down and find a place that we can protect Medicare and Social Security for the future generations, let’s put our house in order on how we’re going to spend, and let’s make the investments we need to make America stronger.”

In a sweeping road map unveiled last year, the Republican Study Committee — the largest GOP group in the House — called for significant revisions to Social Security and Medicare. Their plan would raise Medicare eligibility to age 67, while allowing for more private-sector plans, while lifting Social Security to age 70 for younger workers and changing the way benefits are calculated. That proposal also raised the possibility that lawmakers could rethink payroll taxes, allowing the money to fund private-sector retirement options.

Republicans proposed privatizing key elements of the Social Security system under President George W. Bush after the 2004 election, only to encounter an onslaught of opposition that scuttled the White House campaign. Eighteen years later, Biden and his top aides lambasted GOP lawmakers in the 2022 race for trying to “deny seniors’ benefits they have already paid into.” The president saved some of his most forceful comments for proposals put forward by Sen. Rick Scott (R-Fla.), who sought to require Congress to reauthorize Social Security and Medicare every five years.

Still, some Republican lawmakers have signaled renewed interest in those plans. Earlier this month, Scott promised to seek entitlement reforms in the context of the debt limit, promising at the time that a “day of reckoning is coming.” Hern, the leader of the RSC, said in a separate interview that lawmakers should at least be able to discuss bipartisan legislation to change the retirement age for a “child who has not paid a single dollar in payroll taxes.”

“No one needing Social Security right now, or expecting to get it in the near future, should be impacted,” added Rep. Earl L. “Buddy” Carter (R-Ga.), another member of the Republican Study Committee, who described the debt ceiling as a means of political “leverage.”

“We have a responsibility as guardians of the taxpayers’ money to make sure we stabilize Social Security and Medicare,” he said.

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Other lawmakers have raised the prospect they could set up a special panel to explore entitlement spending on behalf of Democrats and Republicans who are wary of such a fight. Even a member of the president’s own party, Sen. Joe Manchin III (D-W.Va.), has reaffirmed his recent interest in the idea: This weekend, he touted bipartisan legislation chiefly drafted by Sen. Mitt Romney (R-Utah) that would analyze entitlements and ease the process by which legislation involving those programs could come to the floor.

The idea could gain some traction in the House, where Buchanan pointed to the bill as he stressed the need to “work together and not make this so political.” Another top Republican, Rep. Jodey Arrington (Tex.), led a group of Democratic and GOP lawmakers two years ago in calling for “special, bipartisan, bicameral rescue committees” to study Social Security, Medicare and other federal trust funds, he wrote at the time.

“We’re within the budget window of both the Medicare trust fund and the Social Security trust fund going insolvent. If we don’t do something in that respect, then thats going to cause a benefit cut automatically, and nobody wants that," Arrington said in an interview.

As the new chairman of the House Budget Committee, Arrington is set to oversee Republicans’ efforts to craft a blueprint that could eliminate the deficit over the next decade. He has previously endorsed changes to other federal benefit programs, including food stamps, seeking to impose new work requirements on poorer Americans.

But some lawmakers have expressed deep reservations about the creation of a new fiscal commission, fearing that would open the door for cuts — targeting seniors as well as those who are not yet eligible for Medicare and Social Security. Sen. Bernie Sanders (I-Vt.) said Saturday on Twitter that such a panel is the “last thing we need,” pointing to the fact a prior attempt to impanel experts on entitlements recommended cuts to the program.

“We must instead expand Social Security,” Sanders said.

Appearing on CNN’s “State of the Union” a day later, Manchin rejected his liberal colleague’s claims. “No cuts. No cuts to anybody that’s receiving their benefits, no adjustments to that. They earned it,” he said.

But Manchin appeared not to rule out other changes, as he broke with his own party in calling on Biden to negotiate with Republicans over the debt ceiling. “Could we put basically something on the floor that we will get to vote on it? Let the people decide and see if we’re willing to basically get our house in order,” the senator said.

At the White House, Biden and his top aides broadly have held firm in their position that Republicans should not politicize a key fiscal deadline. But spokeswoman Jean-Pierre did not respond last week when she was asked if the White House had its own plan for preventing Social Security and Medicare from becoming insolvent, as she blasted the GOP for “political gamesmanship.”

“We should not put on the chopping blocks the very programs that matter to the American people,” she said.

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