McCarthy suggests new commission could look at Social Security and Medicare cuts
By: Sarah K. Burris
S E E D E D C O N T E N T
House Speaker Kevin McCarthy (R-CA) announced Wednesday he was launching a commission tasked with looking at budget cuts – and he suggested Social Security and Medicare could come under his scalpel.
His pledge came just months after vowing such cuts to mandatory spending programs were off the table.
In February, President Joe Biden spoke before a joint session of Congress, telling Americans the GOP wanted to cut the programs they had paid into their whole lives. "Instead of making the wealthy pay their fair share, some Republicans want Medicare and Social Security to sunset every five years," he said.
"That means those programs will go away if Congress doesn’t vote to keep them. Other Republicans say if we don’t cut Social Security and Medicare, they’ll let America default on its debt for the first time in our history."
His comments got a chorus of boos from the audience of Republicans . Speaker Kevin McCarthy (R-CA) shook his head.
As he repeated the claim at his State of the Union address, Biden incensed Rep. Marjorie Taylor Greene (R-GA) so much she leaped her feet yelling “liar!" , while Republicans committed on television to never making such cuts .
McCarthy even told CBS's Face the Nation he was taking Social Security and Medicare “off the table” in debt ceiling negotiations.
And then, on Wednesday, the speaker announced he's starting a commission to look at how to make cuts.
Appearing on the Fox network, McCarthy explained, "And now we're cutting, and you know what? It's gonna make some people uncomfortable by doing that, but I'm not going to give up on the American people."
"I'm going to announce a commission coming forward from the speaker — from bipartisan, both sides of the aisle," he added. "...The majority driver of the budget is mandatory spending; it's Medicare; it's Social Security, interest on the debt."
McCarthy told Fox host Harris Faulkner that only 11 percent of the budget could be negotiated during the debt ceiling talks because Biden had "walled off" parts of it – including the part that included discretionary spending programs.
Now, he said, "We have to look at the entire budget."
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So why does defence spending have to be off the table.
Their lobbyists have more money to throw at Congress.
It should not be off the table.
I don't think that it should be, however defense is the only category of spending that has greatly reduced over the decades:
And the overall budget has gone way up. You can talk about percentages yet the actual amount spent has gone up.
audit the DoD and build a new federal prison.
I still remember the jokes about a 20 dollar hammer.
Entitlement spending has increased from 43% in 2002 to 52% last year. Medicare, Medicaid, CHIP, ACA subsidies are projected to continue growing substantially above inflation through 2050. Interest costs on servicing the national debt is also expected to grow substationaly.
Point being, spending has risen in all categories. Blaming entitlements puts out a false narrative.
DoD has been audited, and has failed every single one of them.
Yes, the DoD's $3.5T in assets and $3.7T in liabilities make an audit very challenging even for 1,600 auditors. The size and scope of this Department in comparison to other departments. The assets include nearly 2.9 million military personnel; their equipment and weapons and physical items such as buildings, roads and fences on 4,860 sites worldwide.
those toilet seats are probably going for a few thousand dollars each now...
Before the Great Depression, entitlement spending represented about 2-5% of federal spending. By 1940, rapidly rose by 10% 1940, so that total entitlement spending reached 15% of total federal spending.
After WWII, entitlement resumbed growing to reach 20% by 1970.
That spending was flat in the 80's but began growing again reaching 41% by1994.
In 2010 it represented 46%, in 2015 48,2%, in 2022, 52%.
Thisn't so much a narrative as it's a set of facts. What do you find as false?
What do you find false that discretionary and defence spending as well as all areas have risen as well.
A few thousand, wow! My Coway Bidet mega 400 goes for $500 plus installation. Love it's design including 3 stage cleaning system, heated seat and drying system.
Yes all have grown in total dollars against GDP, but the growth in entitlements have been much larger that the rest.
We also have a larger population.
Of course it would...the percentage is the only number that's relevant
Are you saying the DoD is too big to audit? That's the excuse?
Senator Rand Paul also said he's offering an amendment to the Debt Ceiling bill to cut SS and Medicare 5% next year and another 5% in 2025.
that teabag's face could use a remodel...
I say we get rid of Congressional pensions and health care plans.
12 consecutive terms as a rep and 4 consecutive terms as a senator to get a gov't retirement package. health care ends when you leave elected office, and no double dipping with social security benefits. 48 hours to report any stock buys or real estate investments, or complete forfeiture of any gains and a 50% fine of the invested funds.
Sure, but the real difference is that we regular Americans have paid for our social security and medicare. They don't pay for their pensions and healthcare. We do.
that's why I set the bar at 24 years of service or they get nothing.
Our FICA taxes pay for part of our benefits.
Very true, we will draw out more than we paid in unless we kick the bucket shortly after starting. Social Security is the only legal Ponzi scheme here in the US.
I agree but that’s like telling the fox to not take any chickens while in the hen house.
Our “public servants” should have no better deal than the average citizens they supposedly serve. Problem is you’ll have to shit-can them all to make it happen.
This is going to happen at some point. The longer it’s put off, the worse it’s going to be. It’s just math.
Keep burying your head in the sand.
If only bush’s plan to privatize social security had passed. Social security would be in perfect health and retirees would be so much better off.
So then why are they wanting to increase defence spending and build like four new space force bases...
Seems to me they have money to spend.
We borrow more money a year than we spend on defense. The idea that cutting defense spending will solve our entitlement spending crises has no basis in reality. It’s not 1950 where defense was the major part of our budget.
Sean,
It is not an entitlement if you paid for it. I am so tired of people calling SS that.
Well, I agree that defense spending could probably save some money with efficiency improvements and oversite but it doesn’t help when they start talking crazy by going electric over fossil fuels on an unrealistic schedule. Any guesses which will cost more?
A strong defense is the single biggest reasons we are free debate things like social spending more or less free from more tyrannical government influence. Countries like China are licking their chops, hoping we reduce military spending.
It’s obtuse to think otherwise
I could say the same. The idea that cutting SS will solve the problem has no basis in reality.
Entitlements simply refers to spending required by law. The semantics of what you call the programs aren't going to change the reality. This is a major problem and kicking the can down the road isn't responsible
You understand that is, in fact going to happen, if nothing changes? Do you think the social security trust fund is lying?
Numbers are real. So are laws. Best learn them instead of thinking you can solve everything by cutting spending on the military.
Certainly nothing another tax break for "job creators" couldn't fix though.
Deflect all you want. It's so much easier than dealing with reality.
And you all seem to think everything can be solved by cutting services to people that need it.
And more tax cuts...
It implies that it is a freebie... which is not.
While I agree we have an issue, it is one that has many other ways of handling it rather than kicking it down the road. But you can't take away from retirees money that will barely cover their needs in many cases. It is dealing with this with a blunt instrument.
Also, when Congress gets a cut and stops being paid even when they are no longer serving, then we can talk.
You can't make more tax cuts if you can't cover what is on the table already.
Exactly. An inheritance is an entitlement.
Get that straw man!
So Perrie, are you trying to say SS and Medicare are fully funded by all the people we receive it?
It has been shown that the trump era tax cuts hurt the budget.
That'll solve it. Pennies on the billion dollars.
I don't think people understand the numbers involved.
Not if you worked to make it, as do most small businesses and farms that offspring work at.
I'm not deflecting at all. I'm pointing out the hypocrisy in the GOP platform - Fuck grandma; Yay Richard Uihlein!
Should not income increase when spending increases?
In the context of federal programs, entitlement means a program that provides financial assistance and welfare benefits to individuals who meet requirements set by law; changes to the benefit formula requires specific new legislation; these programs don't require annual budget appropriations.
Paid for it is questionable:
For people in the 1960s birth cohort with income in the middle quintile, the benefit/tax ratio is projected to be 1.6, based on calculations using data from the Congressional Budget Office.5 For them, the expected value of their lifetime benefits is about 50 percent more than their expected contributions . This measure accounts not only for their projected path of earnings, but also the expected length of their life.
By contrast, people who are in the lowest income quintile of the 1960s birth cohort are projected to have a benefit/tax ratio of 2.8. That means that their lifetime benefits are expected to be almost three times the amount that they contributed into the system, even after accounting for their shorter-than-average life expectancies.
You're saying the heir worked to make their inheritance?
That's serious child labor.
I'm confused by that comment. If I pay for something am I not entitled to that something? If I pay for health insurance am I not entitled to healthcare coverage? If I work for wages or a salary am I not entitled to a paycheck?
SoSec is an entitlement because people have paid for it and they are entitled to it. Welfare is not an entitlement because those receiving the benefits have not paid for them.
IMO what is causing confusion are neoliberal and libertarian Republicans demanding work requirements for welfare benefits. Those work requirements transform the various welfare programs into entitlements which means the outlays are no longer discretionary. If people are working to receive some sort of welfare benefit then they are entitled to those benefits.
Neoliberal and libertarian Republicans are actually creating a welfare state of entitlements by demanding work requirements.
So you think if we reduce military spending China will invade and conquer us?
That is far out.
Lol … one can only hope you don’t expect anyone to take that comment serious Bob.
Math is real.
I realize that's inconvenient, but we are where we are.
We're almost surely going to see come combination of payroll tax increase, benefit control, and eligibility tightening.
It should have happened a long time ago, but we allow politicians to buy our votes with our own money.
There really aren't very many levers to pull, here.
There are taxes, benefits, and eligibility.
All the instruments are blunt.
Imagine that. Math is real...And here I thought it was woke....
There could have been fixes as some suggested getting rid of the cap.
Instead of 'fixes' we get cuts.
Far out man.
From the President's FY24 Defense Budget request, priorities include:
Ever grow up on a farm?
Do we need to spend ten times more than any other nation in order to do those things?
No, manpower is the Army's greatest expense, bring back a draft for 3 years, reduce family benefits and retirement pay and you reduce the budget.
[✘]
Doesn't Israel do that. Everyone has to do like a two year stint or something.
I'm all for bringing back the draft but not reducing family benefits or retirement benefits
No, but...
Grandfathers were both farmers. One went broke during the Great Depression, and then worked in a Baltimore steel mill. I hardly knew him.
The other stayed on the farm until he retired. After a couple of years of boredom, he got a job as a salesman in a hardware store. He continued to work until about 90. Died five years later.
He continued to "visit" the farm for many years after "retirement". He'd tell us everything that was different from his last visit... while his loyal old Chevy wobbled towards the ditch beside the road.
His name was Elmer... my middle name.
Believe it or not I wouldn't be totally against it. Make some kids grow up. Everyone has skin in the game so to speak.
One place everyone is equal....Haha
The reason I ask is because I did and child labor was the thing. I had chores after school and stuff to do in the summer. And I didn't get paid. But I had a roof over my head and food in my belly and all the milk I could drink
A draft should be for all, with public service (for a longer period) being an option. But if the wealthy can get bone-spur excuses, the deal is off.
That's great... or horrible... depending on how you look at it.
Absolutely
I got time off to go swim in the creek. Winters were the worse because it gets bone chilling cold in North Central PA. But I did my chores and mostly liked it because I was in charge of the calves
Yes and entry level pay for a Chinese soldier is 16 times lower in China than America.
I would wait for the lawsuits stating the religious can be exempt...
yes they are. And if nothing is done in less than 10 years Social Security will run out of money and no longer have sufficient funds to pay at the current levels which means a 22% cut across the board for all retirees.
The problem we run into is when "fixes" are talked about we get those who bitch about how it will impact them. A few months ago I brought up some ideas on how I thought it could be fixed and the immediate return was all bitching about how my suggestions would take away their retirement or how people can't continue to work longer in their lives.. yet people continue to live longer lives and do all sorts of physical things as they age.
Nobody wants to talk about fixes so if nothing gets done in less than 10 years the system will self-correct. When it runs out of money then everybody gets an immediate 22% cut in benefits.
If Social Security isn't fixed, those reductions will automatically happen. That's the issue.
"The idea that cutting SS will solve the problem has no basis in reality."
What "cuts" are you talking about?
Privatization is a no starter for me.
I thought I read where life expectancy in the US actually dropped. I don't know what the age is now, for me full retirement is 67.
Almost 70 and people live to say 80. A little over ten years.
I wouldn't be adverse to a dollar extra taken out of paychecks.
I meant military bennies reductions. That's what drinker wants
I kinda would have liked to see how Bush's plan would have worked. I wouldn't mind having 25% of what I'm taxed and being able to invest it in something.
Ahh, sorry. That wasn't clear to me. Thanks.
And I agree, those who make it 20+ years in the military deserve everything they should get. I signed that blank check for four years, someone who willingly signed it for 20 or more definitely deserves a full pension.
Thank-you for saying that. I put in 9.5 years but Mr G put in 23. He earned every penny of that retirement check
My problem is it is kinda like 401ks. When someone leaves a job it is sometimes cashed out and spent. Then start over at a new job. Then someone is investing for them the rest of their lives. And if a crash did happen, everyone is screwed or the government would end up paying anyway.
I am just not a fan of the markets and don't think it is really a good idea to rely on them.
Yeah, I didn't like privatization when it was first talked about and I'm glad it didn't get passed. But the system is in trouble and needs to be fixed.
When Social Security was first set up, they picked the age of 65 for full benefits because the average life expectancy was just over 64. Today the life expectancy for a white male is just over 79. So I do believe that it's time for another reset and raise the age for full benefits from 67 to 70. I think they should also raise the Medicare age to match the full retirement age. I also think they should raise the age for early retirement from 62 to 65. Naturally this would be phased in, those within 20 years of retirement would not see their full retirement age change and of course those already retired and drawing SS would not see any changes to their benefits.
Remove the cap for FICA taxes and tax the entire income.
Raise the FICA tax. Current tax is 7.65% from both employee and employer if employed, or 15.3% if self-employed. I would raise it a percentage point so 8.65% from employee and employer or 17.3% if self-employed. I would also raise the Medicare tax from it's current 1.45% to 2%.
It can be done but one needs a good financial adviser. I wouldn't just start investing without getting good advice from a reputable firm
Lol .... not what I said but what is far out is your allusion that they wouldn’t take advantage of it. Besides, in today’s world they wouldn’t need invade. All they need to do if keep shoveling propaganda to loons on the left who will keep scarfing it up with a spoon.
The socioeconomic benefits to a strong military like ours is well known to anyone without their head up their ass. China knows it well and is upsizing their military big time.
No worries though. I’m sure they’ll listen our socialist doves here and take it easy on us. /S
Ok, now that sounds sane. Though I think the biggest pushback would be the age thing.
I’ve been saying that for awhile but I’m not sure it would have to go unlimited. Need to get actuaries on it and do the calcs.
The most important thing if this happens is protections so politicians can’t raid it for their pet projects du jour. no protects, no raising IMO.
Some of your comments give the impression you either don't understand the math or choose to ignore it.
I'm not sure the best "fix" is simply to try to seize more of somebody else's money. At some point, we need to start making more realistic assessments about life expectancy and how long people are able to work. Because .... math.
Social Security was never intended as a wealth redistribution plan. It was designed as a government supervised mandatory pension program. You pay in, you get benefits....relative to what you paid in. The reason there is a cap on the tax is because there is also a cap on the benefits.
So if we're going to tax people a potentially unlimited amount for a limited benefit, we are changing the fundamental nature of the program.
This also ignores the fact that wealthy people generally have much greater control over how they get their income, and adjust it to minimize their tax burden. So what seems like an idea that would generate enormous tax revenue ends up having significantly less impact. Social Security taxes are only collected on earned income, so many high earners will simply transition to non-earned income, like dividends or capital gains.
And we already have models for programs like that.
If you have a 529 college savings plan for kids or grandkids, you have a limited number and type of investment options that meet statutory guidelines.
The same goes for HSA accounts with investment options.
Alternatively, plenty of other nations have sovereign wealth funds where they do something simple like diversify the investment base of the SS trust fund beyond US Treasuries.
Some of your comments are just insults. So if it is going to be that you can just bug off again.
Why don't you do your patriotic duty and give your SS bennies back to the government. I need mine.
I can only wonder what would have happened to the money for seniors when the stock market almost crashed.
is Math hard for you? Look at the returns on index funds since 2007.
The math isn't that hard. Even during those temporary dips, the ROI would have been much better.
So in the meantime, what do those people do?
Nice cherry picking of data. The DJIAA recovered to its 2005 numbers (which is when it should have been implemented) within six months of hitting its low. The returns since then are almost 400%.
So in the meantime, what do those people do?
What are people going to do when their benefits are cut 20% in 10 years?
First, those who are actually retired could have removed the small portion of their SS benefits that could have been invested in the stock market out of it. Or they wait out the six months or so they were "down" in the portion they were allowed to invest and reap the benefits. .There's almost no scenario where people could have been worse off, and the vast majority would have significantly more wealth and there would be no chance of a benefit cut in 2033.
Now you are talking about seniors playing the market. When the market lost its value, the people that rely on those checks would have been out of luck for almost 4 years until they made gains again.
The most obvious response is that no one who was retiring in that window would have had any money in the program.
? So who would be paying them the money?
No they, wouldn't. You are cherry picking from the market high, not the place seniors would have bought in (and seniors who were retired in 2009 couldn't have bought in to begin with) under the Bush plan. It was designed for long term investing, not churning.
20% cuts are coming unless something changes. Think about how many million of people who rely on those checks are now in danger of being "out of luck".
Again, who would be giving out the checks?
What does that even mean? Do you know how investment accounts work?
Explain it to me. Who would be writing and sending checks to the seniors...
Unless you are saying everyone has some kind of revolving account.
No one. They would have a private account based on the earnings of whatever they put into the voluntary account up to the percent limit . They would also receive a regular social security check in order to receive their "earned" benefits. Much like people with a 401 K do today.
Over 40 plus years, it would be impossible for anyone to be in a worse place than in a managed account than if they simply got ss alone. If there ever was a negative return over 30 to 40 years, then our country probably doesn't have SS at that point anyway because our economy collapsed and all entitlements wouldn't exist.
I think the idea of it being voluntary would kind of harm it. You know how people are.
I can't wait until they tell Grandma she is going to have a cut in her medical care and SS income.
That should go over well right before the election...
Keep doing nothing and you will.
that never should have been allowed and shame on all the congress critters and POTUSES that allowed it!
And I include both sides of the aisle
That would be telling Grandma a big lie
So what do you think Rand Paul means when he offers up an amendment that would have 5% cuts...
Do you think Rand Paul can change benefits on his own? He doesn't have a Biden complex.
No changes can be made without buy in from both parties. That's obvious. But of course, the point of the exercise is to scare ignorant seniors that Rand Paul is coming for their checks.
There's no denying that healthcare has become the largest outlay for the Federal government. And government funded healthcare has been placed under the umbrella of SoSec and Medicare.
A fourth of public expenditures are for healthcare ($1.7 trillion by current estimates). Healthcare inflation is driving that government expenditure higher. Public funds are being utilized to subsidize for-profit healthcare. Nationalizing the healthcare system won't lessen the burden of healthcare on taxpayers and certainly won't diminish the influence of healthcare costs on government deficits.
Democrats are calling for tax increases to address the deficits caused to a large extent by growth in healthcare costs. But those tax increases will only redistribute money from other sectors of the economy to the healthcare sector. Democrats' call for taxes will only make the healthcare rich richer. Those tax increases avoid addressing the underlying problem of healthcare inflation.
So, yes, budget talks must include healthcare outlays since that is the largest driver for Federal deficits. Accusing Republicans of wanting to cut SoSec and Medicare only scores political points by completely ignoring the problem.
Yep, just like student loan forgiveness.
One guess as to what happens to college tuition costs if that gets done across the board.
I'm not sure who benefits more from student loan forgiveness; colleges or lenders. The students with the debt are still stuck with an education that doesn't provide enough income.
College loan forgiveness is one the dumbest ideas they’ve come up with in a long time but I agree.
Too many worthless college degrees out there, not enough people working in the trades.
People in the trades can actually make a really good living. I have seen plumbers and contractors that can make more money than a lot of office positions.
My neighbor runs his own ac repair business. Works when he want to now.
I believe colleges as it's very difficult (read almost impossible) to have student loan debt removed via a bankruptcy and colleges seeing how willingly the federal government will "forgive" those student loans is just more fuel for colleges to raise tuition and fees faster. The lenders are a wash either way as either the student repays the loan or the feds cover the loan, but the lenders don't make additional money from this other than they would be more willing to lend even more money in the future.
College is ridiculous. Just one of our state colleges would be about 60k for four years.
I simply do not know if the college degrees are worthless. But the need for student loan forgiveness is overwhelming proof that the degrees are not worth what students are paying for them.
Why doesn't the Federal bureaucracy investigate colleges and universities for fraud, profiteering, and price gouging? Seems like racketeering laws might apply. Choosing to write off the debt and sweep the problem under the rug ain't a real good solution.
The Senate just passed the bill to kill Biden's planned student loan forgiveness plan.
That's a good thing.
There goes my liberal card....
I know, I came up in the trades and had a contracting business for nearly 40 years.
I had people retiring at 50 or earlier if they started right out of High School
Gotta pay for football...
Nah, they just snip off a little piece. You can tell who has been pissing off the establishment by how big their card is...
Supply and demand. Degrees in demand are not worthless. The others are. Too many degrees, not enough jobs in those fields.
I’m very pro college but generally speaking the tougher degrees are usually more marketable. It sucked choking through an engineering degree but it paid off. Big time.
In many ways that is correct, Ender. I never went to college in fact never finished high school but probably made more money in a week than many people made in a month. I know that sounds crazy but it really was true. Being a longshoreman for a number of years allowed me and my family to live a good life. The work hours were not the greatest, and we worked all holidays except Christmas and Bloody Thursday and also swing shifts and night shifts. Most of the operations were 24/7 year around.
My daughter was very fortunate she got a full-ride scholarship to UCLA and it really served her well over the years it was a degree that one wouldn't think would be very valuable back then but turned out to be a gold mine and allowed her to travel and work around the world.
Right now in the US, there is a shortage in most all trades and many of these kids going into huge debt would be much better off working in the trades.
It really amazed me the number of people that never finish college or get a degree and are saddled with enormous debt for years/decades.