US Social Security and Medicare are on the ballot

A few days ago, the Biden administration released its budget proposal for fiscal year 2025 (which begins in October). Republicans control the House, so this budget is not going to happen, so it serves primarily as a statement of principles and intentions.

But that doesn’t make the budget irrelevant. He clearly outlined the Democrats’ vision for the future; In particular, your belief that we can maintain solvency Social Security and Medicare Raise taxes on higher incomes instead of reducing benefits. And it marks a stark contrast to the vision of Donald Trumpwho appeared to say during an interview with CNBC that he would look to ax the show.

I will return to the question of what Trump meant by his comments and, more importantly, what he might actually do if returned to power. However, let’s talk about President Biden’s position first.

You might be tempted to dismiss Biden’s assurances about safety net programs as boilerplate: Don’t Democrats always promise to protect Social Security and Medicare?

But Biden has taken a significantly stronger position than that Barack Obama, who, as president, often seemed to be under the intellectual servitude of what he called very serious people, the opinion leaders who dominated the interior of the country a decade ago. Beltways were obsessed with the need for speech and entitlement reform, which effectively meant that Social Security and Medicare. Obama’s fiscal year 2014 budget triggered entitlement reform because John BoehnerThe Republican Speaker of the House of Representatives was then forced to say that Obama “deserves some credit for some of the additional entitlement reforms outlined in his budget.”

None of this is necessary, says Biden. This is a significant step to the left, although it is also a step to the center, in that voters have never agreed with the conventional elite wisdom that benefits should be cut and majorities consistently say that benefits should be cut. Rich people don’t do that. Pay enough tax.

What explains this hardening of the democratic position? On the one hand, social benefit programs appear more financially sustainable than ever.

A decade ago, cost projections generally assumed that health care costs would continue their historical pattern of growing faster than GDP, leaving Medicare and other health programs increasingly unaffordable. In fact, however, Medicare spending, in particular, has grown much less than expected. We don’t know exactly why, though efforts to cut costs Assume affordable care They probably impressed.

We still have an aging population, which means an increasing proportion of retirees receiving benefits and workers paying taxes; The Congressional Budget Office expects that combined spending on Social Security and Medicare will add about three percentage points of GDP. For the next 20 years. But this cost increase, while not small, is moderate enough to be offset by increased revenue.

At the same time, very serious people have lost their influence. His repeated predictions of a financial crisis remained unrealized. The 2021-22 inflation hike temporarily boosted the credibility of critics of government spending, but this credibility evaporated when dire warnings of persistent stagflation turned out to be completely false.

I think all of this has encouraged Biden and his officials to take a strong stance against cuts to America’s social security infrastructure; In effect, calling for more benefits, which would be paid for with higher taxes on corporations and high-income individuals.

What about Trump? This is what he said: “A lot can be done in terms of rights, in terms of cuts and in terms of theft and mismanagement of rights.” If you have trouble parsing it, it’s not you; Oh stay. Trump seemed to me like a student who didn’t read, trying to trick his way through an essay question. If pressed about what “mismanagement” he was talking about, what theft he had in mind, he would probably respond with more word salad.

And the Trump campaign’s desperate attempts to insist that “cuts” didn’t actually mean, well, “cuts” were unconvincing.

By the way, Social Security sees very little fraud, and if Medicare is so poorly managed, how did it become so effective at controlling costs?

Trump gives no indication here that he actually knows what he’s talking about. What that might mean in practice, however, is that if he returns to the White House, he will do with Social Security and Medicare what he did in his nearly successful attempt to replace Obamacare: leave the law-writing to the right. Thinkers who understand how programs work and who want to internalize them.

One final point: Trump’s plan to crack down on immigration would be a disaster on many fronts, but one important consideration is the catastrophic impact it would have on the future finances of Social Security and Medicare. because? Because immigration is now crucial to the growth of the working-age population, whose taxes support retirees.

So, will Social Security and Medicare be on the November ballot? Definitely. Biden has a clear plan to preserve these programs; Trump, consciously or unconsciously, will probably help ruin them.

© The New York Times 2024