Social Security spending growth booms
WASHINGTON — President Joe Biden scored an early political point this month in his fight with congressional Republicans over taxes, spending and raising the federal debt limit: He forced Republican leaders to profess, repeatedly, that they will not seek cuts to Social Security and Medicare.
In the process, Biden has effectively steered a debate about fiscal responsibility away from two cherished safety net programs for seniors, just as those plans are poised for a decade of rapid spending growth.
New forecasts from the nonpartisan Congressional Budget Office, released Wednesday, showed Medicare and Social Security spending growth rapidly outpacing the growth in federal tax revenues over the next 10 years. That is the product of a wave of baby boomers reaching retirement age and beginning to tap the programs, which provide guaranteed income and health insurance from the time benefits are claimed until death.
Those retirees are an electoral force. In refusing to touch so-called entitlement programs, Biden was appealing to seniors, along with generations of future retirees, when he used his State of the Union address and subsequent speeches this month to amplify attacks on Republican plans to reduce future spending on Social Security and Medicare or potentially sunset the programs entirely.
“They’re more than government programs,” Biden told a Florida audience last week. “They’re a promise — a promise we made: Work hard and contribute, and when the time has come for you to retire, you’ll be there — we’ll be there for you to help you out. It’s been a sacred trust, the rock-solid guarantee generations of Americans have counted on, and it works.”
In his 2020 campaign, Biden proposed shoring up Social Security’s finances and increasing benefits for some retirees by raising taxes on high earners. Social Security is primarily funded through payroll taxes on workers’ incomes of up to $160,200. Biden has suggested eliminating the cap for incomes above $400,000 a year, subjecting them to payroll taxes.
Influential Republicans have proposed a variety of changes to make both programs more fiscally sustainable, including spending cuts and gradually raising the retirement age from 67 to keep up with longer life expectancy.
Republican leaders in Congress have stressed that, despite the calls from some conservatives to link safety net spending and the debt limit, they will not seek those changes as part of an agreement to raise the nation’s borrowing cap.
House Republicans have threatened not to increase the current $31.4 trillion limit, which the U.S. technically hit Jan. 19, unless Biden agrees to unspecified demands to reduce government spending and debt.