Republicans admit they’ll slash Medicare, Social Security to pay for their tax cuts

“I do think we need to deal with some of our spending.”

Republicans that supported the trillion dollar Trump tax bill are revealing their true motivations: slashing Medicare and Social Security. (PHOTO Credit: Getty Images)
Republicans that supported the trillion dollar Trump tax bill are revealing their true motivations: slashing Medicare and Social Security. (PHOTO Credit: Getty Images)

 

Slowly but surely, Republicans that supported the trillion dollar Trump tax bill are revealing their true motivations: slashing Medicare and Social Security.

During a Sunday interview with CNBC’s John Harwood, Rep. Steve Stivers (R-OH) urged entitlement reform as the deficit continues to balloon as a result of the GOP tax cuts.

“I do think we need to deal with some of our spending,” Stivers said. “We’ve got try to figure out how to spend less.”

Stivers, who also serves as chairman of the National Republican Congressional Committee (NRCC), is a self-proclaimed “budget hawk” and frequently criticized national debt levels under the Obama administration. Despite his previous trepidation at increasing the deficit, he voted in favor of a costly tax bill that even the White House admitted would not pay for itself over time.

n his interview with CNBC, Stivers admitted this as well saying, “I don’t think that tax cuts, themselves, can grow the economy for 20 or 30 years.”

But Republican politicians did not go into the tax bill vote blind. There were multiple studies released after the bill was drafted that showed massive tax cuts for the wealthy would only add to the deficit.

The conservative-leaning Tax Foundation released a report the week of the tax bill vote that found the GOP bill would lead to a 1.7 percent increase in gross domestic product over the long term and bring in an extra $600 billion in revenue. Even after factoring in that growth, however, the deficit would still total $448 billion over the next decade.

The nonpartisan Joint Committee on Taxation specifically shot down the idea that the bill would pay for itself, stating in analysis on December 11 last year that it would increase federal interest costs by $51 billion over ten years and would cost approximately $1 trillion.

Stivers is far from the first Republican to hint at cutting crucial programs to help drive down the national debt, but he is the first to specifically link it to the financial failures of the tax bill.

House Speaker Paul Ryan (R-WI)

House Speaker Paul Ryan (R-WI) said outright last year that Medicare and Medicaid were his next targets for 2018, following the passage of the tax bill.

“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said during December appearance on Ross Kaminsky’s talk radio show. “…Frankly, it’s the health care entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements — because that’s really where the problem lies, fiscally speaking.”

Sen. Pat Toomey (R-PA)

Immediately following the tax bill’s passage in December last year, CNN’s Jake Tapper asked Sen. Pat Toomey (R-PA) how he could simultaneously vote for a huge tax cut for the rich while advocating cuts to Medicare and Medicaid.

“We’ve got entitlement spending that is not sustainable,” Toomey replied. “These big spending programs that are growing faster than the economy. You can’t tax your way out of that problem. You’ve got to make some curbs.”

Sen. John Thune (R-SD)

Sen. John Thune (R-SD) told the Washington Post early last December that Congress could consider entitlement reforms as means to cut government spending and reduce the deficit stemming from the tax bill.

“If we’re going to do something about spending and debt, we have to get faster growth in the economy — which I hope tax reform will achieve. But we have also got to take on making our entitlement programs more sustainable,” Thune said. “I think there is support, generally, here for entitlement reform.”

Rep. Tom Cole (R-OK)

Cole has admitted in the past he is not a “deep economic thinker,” yet believes Medicare and Social Security, rather than huge handouts for the wealthiest Americans, are what the country should be concerned about.

“If someone wants to get serious about debt, come talk to me about entitlements,” he explained. “Tax cuts produce growth, entitlement spending doesn’t.”

That Republicans have their eye on slashing government programs comes as no surprise, of course. Shortly after Congress passed the tax bill, op-ed columnist Bryce Covert of The New York Times warned of the “Trojan horse” hidden in the legislation that would serve as a setup for steep cuts.

“Republican leaders have wanted to do this for a long time. Mr. Ryan has been salivating over cutting Medicare, Medicaid and Social Security for as long as he’s had a political career. Mr. Trump’s 2018 budget proposal, released well ahead of the tax legislation, named welfare reform’ one of its core pillars,” she wrote. “…Now that they’ve succeeded in passing a tax package that will reduce government revenues so much, the ensuing cost will serve as the excuse to get everything else they want.”

57 total views, no views today

Social Security Anniversary: Why, 83 Years Later, the Safety-Net Program Is Running Out of Money

By Jessica Kwong On 8/14/18 at 5:00 AM
When President Franklin D. Roosevelt signed the Social Security Act into law on August 14, 1935, he famously said, “Today, a hope of many years’ standing is in large part fulfilled…. We have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

Eighty-three years later, the program that has provided insurance for retirees and the disabled for decades is running out.  The Social Security program could be insolvent by 2034, government trustees warned in June, according to The Wall Street Journal. For the first time since 1982, the program would have to touch its close to $3 trillion trust fund because of higher payouts of benefits.

After 2034, the program would only be able to pay out benefits at about three-quarters of recipients’ owed rates from incoming tax revenues, according to trustees, unless Congress acts to boost its finances. Social Security is paid for by dedicated taxes that cannot generate enough revenue to cover the costs of the program.  The program’s costs are rising because of America’s aging population, but revenue growth trails behind because the economy isn’t growing as fast. The number of Americans who are receiving retirement or disability benefits through Social Security is about 61.5 million.

Funds for Social Security’s retirement section may be depleted by 2034, which is a year earlier than estimated last year. The program isn’t expected to run out of money altogether—taxes from payroll should be able to front about 75 percent of benefits to recipients, but retirees may wind up receiving less, or employees may need to contribute more to the system.

Money for those with disabilities may be depleted by 2032 instead of 2028, as projected last year, because of fewer applicants.

Treasury Secretary Steven Mnuchin in June said that the booming economy would help sustain Social Security as well as Medicare.

“The administration’s economic agenda—tax cuts, regulatory reform and improved trade agreements—will generate the long-term growth needed to help secure these programs,” Mnuchin said.

The first person to receive Social Security benefits was Ernest Ackerman. He got a one-time payment of 17 cents in January 1937.

66 total views, no views today

House GOP plan would cut Medicare, Social Security to balance budget

The budget would transform Medicaid, the federal-state health-care program for the poor, by limiting per-capita payments or allowing states to turn it into a block-grant program
By Erica Werner | The Associated Press
June 20, 2018 at 8:34 am
House Republicans released a budget proposal Tuesday that would balance in nine years – but only by making large cuts to entitlement programs, including Medicare and Social Security, that President Donald Trump has vowed not to touch.

The House Budget Committee is aiming to pass the blueprint later this week, but that may be as far as it goes this midterm election year. It’s not clear that GOP leaders will put the document on the House floor for a vote, and even if it were to pass the House, the budget would have little impact on actual spending levels.

Nonetheless the budget serves as an expression of Republicans’ priorities at a time of rapidly rising deficits and debt. Although the nation’s growing indebtedness has been exacerbated by the GOP’s own policy decisions – including the new tax law, which most analyses say will add at least $1 trillion to the debt – Republicans on the Budget Committee said they felt a responsibility to put the nation on a sounder fiscal trajectory.

“The time is now for our Congress to step up and confront the biggest challenge to our society,” said House Budget Chairman Rep. Steve Womack (R-Ark.). “There is not a bigger enemy on the domestic side than the debt and deficits.”

The Republican budget confronts this enemy by taking a whack at entitlement spending. Lawmakers of both parties agree that so-called mandatory spending that is not subject to Congress’s annual appropriations process is becoming unsustainable. But Trump has largely taken it off the table by refusing to touch Medicare or Social Security, and Democrats have little interest in addressing it except as part of a larger deal including tax hikes – the sort of “Grand Bargain” that eluded former President Barack Obama.

The House Republican budget, entitled “A Brighter American Future,” would remake Medicare by giving seniors the option of enrolling in private plans that compete with traditional Medicare, a system of competition designed to keep costs down but dismissed by critics as an effort to privatize the program. Along with other changes, the budget proposes to squeeze $537 billion out of Medicare over the next decade.

The budget would transform Medicaid, the federal-state health-care program for the poor, by limiting per-capita payments or allowing states to turn it into a block-grant program – the same approach House Republicans took in their legislation that passed last year to repeal the Affordable Care Act (the repeal effort died in the Senate). Changes to Medicaid and other health programs would account for $1.5 trillion in savings.

Social Security comes in for more modest cuts of $4 billion over the decade, which the budget projects could be reached by eliminating concurrent receipt of unemployment benefits and Social Security disability insurance.  Democrats were quick to criticize the GOP proposal.

“The 2019 Republican budget scraps any sense of responsibility to the American people and any obligation to being honest,” said Rep. John Yarmuth of Kentucky, the top Budget Committee Democrat. “Its repeal of the Affordable Care Act and extreme cuts to health care, retirement security, anti-poverty programs, education, infrastructure, and other critical investments are real and will inflict serious harm on American families.”

96 total views, no views today