Trump's Second-Term Plan For Social Security: Starve The Beast
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- In using deficit fears to target entitlement programs, many Republicans are hoping to use Trump's second term to cut Medicare and Social Security.
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Donald Trump won't say it, but Republicans in the Senate will: Social Security and Medicare would be on the chopping block in a second Trump term. Pointing to rising deficits, Republican senators have all but promised to gut entitlements if Trump gets four more years.
Sen. John Thune (R-SD), the second-ranking Senate Republican, expressed hope to the New York Times that Trump would be "interested" in reforming Social Security and Medicare. Sen. John Barrasso (R-WY) was even more optimistic. "We've brought it up with President Trump, who has talked about it being a second-term project," Barrasso said. Senate Leader Mitch McConnell (R-KY) has made no secret of wanting to cut Social Security.
In using deficit fears to target entitlement programs, many Republicans are hoping to use Trump's second term to cut Medicare and Social Security. First, expand deficits through tax cuts, then declare that spending must be slashed. The chief target of these proposed cuts is Social Security, which historians have noted the mainstream Republican party has long sought to diminish, privatize, or both.
"Starve the beast"
Senate Republicans' talk of entitlement cuts come in the context of new estimates from the Congressional Budget Office, which predicts the deficit will climb to $1 trillion in 2020. By 2029, the deficit relative to GDP is slated to reach the highest levels since World War II—an unprecedented deficit level for an economic expansion, when deficits tend to shrink.
Since past behavior is a good predictor of future behavior, and many Republicans are signaling they want to, Republicans will likely argue for cuts to Social Security and Medicare when a recession inevitably hits. This can be seen as a reprise of the tactic known as "starve the beast."
"Starve the beast" is a political two-step that first generates deficits through tax cuts and, second, points to the alarmingly high deficits to attack government spending and reduce entitlements. Credited to an unnamed Reagan administration official in 1985 and long associated with Reagan economic guru David Stockman, the notion of "starve the beast" emerged from around the time of Reagan's 1981 tax cuts, which were not paired with simultaneous spending reductions.
Reagan held that higher deficits would naturally lead to budget reductions: "We can lecture our children about extravagance until we run out of voice and breath. Or we can cure their extravagance by simply reducing their allowance."
Today, you can see the "starve the beast" tactic clearly in the 2017 tax cuts—the main cause of the projected record deficits—to future spending cuts. Trump's top economic adviser Larry Kudlow, a veteran of the Reagan administration, has made this argument himself. He explicitly invoked "starve the beast" in a 1996 Wall Street Journal op ed:
"Tax cuts impose a restraint on the size of government. Tax cuts will starve the beast… Specifically, tax cuts provide a policy incentive to search for market solutions to the problems of Social Security, health care, education and the environment."
It would be no surprise to learn that Kudlow, who now heads Trump's National Economic Council, is pursuing the same course today.
The quest to privatize Social Security
In his 2016 campaign, Donald Trump said bluntly, "I'm not going to cut Social Security like every other Republican." Despite reports from fellow Republicans like Thune and Barrasso that Trump may, indeed, be just like every Republican in a second term, some on the right think it's best that he keep that promise.
Among those urging caution is longtime Republican strategist Grover Norquist, famous for his libertarian credo, "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." After the 2017 tax bill passed, Norquist cautioned Trump that Social Security and Medicare should be "off the table" in future spending reductions.
But to follow Norquist's advice would go against the momentum of a conservative movement that has been gaining steam since the 1980s in their quest to cut or privatize Social Security.
Republican opposition to Social Security goes back to the program's earliest days. In the 1935 vote to create Social Security, just 4% of Democrats voted against the bill, compared to 16% of Republicans. The contemporary Social Security privatization movement originates in the conservative Cato Institute, which in 1980 sponsored a book that advocated for privatization. The book's author, Peter Ferrarra, went on to serve in the Reagan administration.
Advocates for dismantling Social Security knew they faced an uphill climb. In the 1980s, Cato and the Heritage Foundation published a paper, "Achieving a 'Leninist' Strategy," which promoted "guerrilla warfare against both the current Social Security system and the coalition that supports it" by creating "a focused political coalition" against Social Security advocates.
Cato's Social Security privatization efforts have long been supported by Cato affiliate Jose Pinera, a former official under Chilean dictator Augusto Pinochet and the architect of Chile's pension privatization. Forty years after that policy experiment, massive protests erupted in Chile demanding a better retirement system.
Influenced by Cato and other groups, Republican presidents have repeatedly attempted to cut or privatize Social Security. Reagan's efforts stalled in the face of public opinion. George W. Bush vowed in his second term to expend political capital on the initiative, aiming to cut benefits by partially privatizing Social Security through the introduction of "voluntary personal retirement accounts." Although it was his top domestic priority, Bush too fell short.
But this history of failures hasn't stopped today's Republicans from pushing Trump to go after Social Security, the linchpin of the U.S. retirement system.
Saving Social Security
Cutting Social Security benefits in the face of severe shortfalls in retirement income would hurt most Americans. As my colleague Tony Webb recently pointedout in an episode of my podcast Reset Retirement, one-third of retirees are dependent on Social Security for 90% or more of their income, and over 60% depend on the program for more than half of their income.
As Social Security expert Nancy Altman recently testified, Social Security is essential to the American retirement system. It is the base on which we all secure our retirement incomes. As Altman pointed out, "Social Security made independent retirement a reality. Prior to its enactment, the verb 'retire' did not mean what it means today."
Preserving and expanding Social Security isn't just an economic issue—it's a civil rights issue, asMaya Rockeymoore Cummings and Meizhu Lui have argued. Due to the racial wealth gap, as well as the fact that minority workers have worse jobs and relatively lower employer pension coverage, non-white workers have a unique reliance on their Social Security benefits in retirement.
Given the dimming outlook for many American retirees, we must expand Social Security, not cut or privatize it—no matter what the deficit is. The greatest irony in Republican's "starve the beast" mentality is that Social Security does not even affect the deficit. So perhaps it's not really about the deficit after all.
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The damn gop wants to destroy your Social Security!
Every 4 years this lie comes up in the media.
Trump has ordered defunding of Social Security!
Once funds aren't there the gop will cut benefits.
It has been their plan to, "STARVE THE BEAST"...
Every 4 years the GOP tries to steal MY MONEY.
It was obvious they were going to do this back in 2017-18 when they made that hugely irresponsible tax cut during a period of economic expansion, and I called it out as such at the time. Intentional fiscal irresponsibility translates into an opportunity to destroy for them.
They have ever since the Reagan 'neoliberal' Revolution. Privatize! Privatize! Privatize! Not enough profits for the rich otherwise.
It's amazing that they still have so many older poor and working-class voters captured, when they've been making their morally-bankrupt, Randian-esque ideology obvious for decades now.
Isn't it, though? I can't believe the number of family members I have who support the GOP, who pretty much only have Social Security to live on. They're cutting off their noses to spite their own faces.
I have several as well.
Political tribalism apparently trumps their own well-being. Pun fully intended.
Trump's nothing special here. He's just a typical republican. Cutting payroll taxes to help the unemployed, which is stupid because the unemployed pay no payroll taxes, and then complain that the system is going broke and is unsustainable. All because they want old and disabled people to suffer.
His plan is to starve old people.
The damn gop has always hated Social Security...
They think poor folks should work till they're dead.
Oh, DAMN, you're onto us now!!!!
lol
Trump fans really do want to change the subject.
Because the headline of the article you seeded is a flat out bold faced lie about President Trumps intentions and we know it.
It is fascinating to see any debate at all on this topic. The Republicans have executed the exact same maneuver ever since Reagan. Anyone over twenty has seen it a couple time... and those of us over seventy are so accustomed to it that we hardly notice.
It takes a great deal of 90-proof hypocrisy not to recognize the operation.
If they cut down on Trump's cheeseburgers, that beast would starve!
Here is an older article that tries to rationalize the Republican view on Social Security.
Before looking at it however please note that Social Security is not "welfare" that distributes wealth from the rich to the poor. (It does a small percent but is pretty much canceled out by the fact that the rich tend to live, on average, about 10 years longer and so get to collect more.)
Social Security is a generational wealth transfer. I paid a retirement for someone's grandfather or great great grandfather - now the young worker pays for my retirement. It's an entitlement - because - uhhh - SS recipients are entitled to it. Of course each year, there are fewer and fewer young workers to pay into SS since the US is below the replacement birth level. The present problems with SS are fixable - but will never be addressed as long as Republicans control legislation.
Republicans are always big on "choice". Privatizing at least a portion of SS gives Americans "choice". Retirees are dependent then on part of their income being variable that can be controlled directly by the short term financial policies of politicians. This can be done in an election year to goose the stock market into unsustainable highs.
But even without political influence, having part of your income as variable would be disastrous for low income retirees.
As far as constantly increasing retirement age for workers. The politicians who propose this tend to think of "work" as sitting on their asses for a few hours a day while on Twitter. For those in the physical trades - plumbers, carpenters etc. the knees give out at about 60.
I don't see Republican privatization policies as intentionally cruel - just unintentionally clueless.
Remember Mitt Romney and his story of the financial struggles he and his wife faced as no-income college students?
Things got so bad they had to sell some of their stock to pay the rent...
Democrats need to understand numbers before a productive discussion can be had.
The most recent democratic stimulus to bail out mismanaged blue cities and states will add 3 trillion dollars to the deficit this year. the trump Tax cuts will add 40 billion. 60 years of the trump tax cut still won’t match the cost of just the most recent stimulus bill the Democrats passed.
Democrats have no concept of the debt and what drives it.
Fiction.
Financial responsibility and economic reality are fiction to the progressive left..
Voodoo economics is "reality" to the reactionary right...
some may not like to hear this , but if ANY party desires to cut or eliminate SSI, all they have to do is decrease the amount that they use to buy the government bonds that actually funds the system and leave what is collected in the general fund where it initially goes anyway.
I will say this , anyone that depended entirely on SSI as a retirement fund was a flippin moron.