Opinion: Why Biden’s budget can’t be taken seriously
Social Security trustees say the program will be unable to fully fund retirement benefits by 2034, and Medicare faces the same threat by 2028. And yet, politicians keep attacking calls to reform the programs
The time to tackle Social Security’s looming funding crisis is now. Waiting until the trust fund can no longer fully fund benefits — something trustees say will happen in 2034 — would be foolish and dangerous.
We’re disappointed President Biden didn’t include a plan to save the program in the $6.8 trillion budget proposal for fiscal year 2024 that he unveiled last week. Even a half-hearted plan would have been a starting point. Instead, we get soundbites from the White House claiming Republicans want to end Social Security and he wants to save it.
Talk is cheap. Lack of action is growing evermore expensive. All we get is a continuation of the playground-level name calling that broke out at the president’s State of the Union speech in January.
That’s when the president accused some Republicans of wanting to cut or end Social Security while he guaranteed to not cut it or Medicare. When Republicans in the room loudly disagreed, Biden seemed to taunt his opponents by saying it appeared everyone agreed “Social Security and Medicare is off the books now, right?”
It was political theater that left a huge question unanswered. If Social Security and Medicare are off the books, what, then, will be done to save them from financial ruin?
A second question naturally follows: When will politicians get serious about this issue?
When Social Security’s fund for elderly and survivor benefits dries up, it will have the ability to pay only 77% of benefits, based on the money the program collects from workers, the trustees said. Inflation may have moved that date up to 2032, according to the nonpartisan Congressional Budget Office.
President Biden’s budget did include plans to help Medicare, which is predicted to hit economic trouble in 2028. He would do this mostly by raising taxes on people who earn more than $400,000 and by raising the Medicare surtax on investment income.
The nonpartisan Committee for a Responsible Federal Budget said it was pleased to see the president put forth a plan for Medicare, but it noted that his budget relies on assumptions about the nation’s economic future that are rosier than many experts expect.
And then there is the nation’s overall spending problem.
“This budget falls well short of the deficit reduction needed to put the nation on a sustainable fiscal path,” the organization’s analysis of the president’s budget said. “We are disappointed that the spending cuts in this budget — given the massive spending growth in recent years — amount to less than 1% of the budget and are coupled by four times as much in spending increases.”
Debt hinders the government’s ability to handle crises, even as it robs the economy of capital.
Experts such as Scott Hodge, president emeritus and senior policy adviser at the Tax Foundation, are unimpressed by the president’s plan for Medicare.
“By 2033 the gap between what Medicare spends and what it takes in will climb to more than $1 trillion — despite the addition of $650 billion in payroll tax revenues and $204 billion in drug ‘savings,’” he wrote in a Wall Street Journal op-ed.
Utah delegation plans
Solutions to Social Security’s woes are not complicated. As we have said before, politicians can raise the age of retirement. They could increase the payroll tax from 6.2% to something higher. They could do away with the tax’s income threshold (many people don’t know that income greater than $147,000 is not taxed for Social Security). They could reduce the program’s benefits. They could change how Social Security’s cost-of-living increase is calculated, using a formula that understates inflation compared to today’s formula. Or they could do a combination of all of these.
But while they are not complicated, they are fraught with political peril, and it doesn’t help when the president attacks any changes to the program as an attack on its very existence.
Thankfully, some lawmakers are proposing plans:
Utah Sen. Mike Lee has joined other Republicans in demanding spending cuts in return for a vote to increase the debt ceiling.
Utah Sen. Mitt Romney has his Trust Act, which would create bipartisan committees to explore ways to reform each federal entitlement program.
Utah Rep. Chris Stewart has a bill that would require the president, in his annual budget, to “provide an estimate of the per taxpayer cost of the deficit and of the public debt.”
Rep. Blake Moore favors allowing younger workers to use Social Security funds for private sector investments and equity accounts.
And Sens. Bill Cassidy of Louisiana and Angus King of Maine, a Republican and an independent, respectively, have joined forces to forge a bipartisan solution. In a joint statement, they said they want to “preserve and protect the retirement security of all Americans now and long into the future,” according to NBC News.
These efforts are encouraging. Serious solutions to the long-term solvency of Social Security and Medicare will require bipartisan support. But leadership must come from both parties. And the lack of response by President Biden on this matter in his $6.8 trillion budget proposal is disappointing.