Just One Of Many Reasons …

Posted on by under Economic issues, Election 2024, History, Personal, Political commentary, Racism & Bigotry, Social commentary

As someone who relies heavily on both Social Security and Medicare for my very survival, naturally I am concerned about the future of those two programs when I hear Republicans refer to them as “robbing from the rich to give to the lazy” and threatening to cut or privatize the programs.  So, I was very interested to read noted economist Paul Krugman’s OpEd in the New York Times a few days ago, and I think he makes some points we should all be aware of.  Even the younger crowd should take note, for they, too, will be old someday!

Social Security and Medicare Are on the Ballot

By Paul Krugman

14 March 2024

A few days ago, the Biden administration released its budget proposal for the 2025 fiscal year (which begins in October). Given that Republicans control the House, this budget isn’t going to happen, so it serves mainly as a statement of principles and intent.

But that doesn’t make the budget irrelevant. It clearly signaled Democrats’ vision for the future — in particular, their belief that we can preserve the solvency of Social Security and Medicare by raising taxes on high incomes rather than by cutting benefits. And it draws a stark contrast with the vision of Donald Trump, who appeared to say during an interview with CNBC that he would seek to cut those programs.

I’ll come back to the question of what Trump meant by his remarks and, more important, what he might actually do if he returns to power. First, however, let’s talk about President Biden’s position.

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

But Biden has staked out a significantly stronger position than that of Barack Obama, who, as president, all too often seemed to be in the intellectual thrall of those I used to call the Very Serious People, opinion leaders who a decade ago dominated inside-the-Beltway discourse and were obsessed with the need for entitlement reform — which effectively meant cuts to Social Security and Medicare. Obama’s 2014 fiscal year budget teased entitlement reform to the point that even John Boehner, then the Republican House speaker, was prompted to say Obama “does deserve some credit for some incremental entitlement reforms that he has outlined in his budget.”

Biden is saying that none of this is necessary. This is a significant move to the left — although it’s also a move to the center, in the sense that voters never agreed with the elite conventional wisdom that benefits must be cut and a majority consistently say the rich don’t pay enough in taxes.

What explains this toughening up of the Democratic position? For one thing, entitlement programs look a lot more fiscally sustainable than they used to.

A decade ago, projections of spending generally assumed that health care costs would continue their historical pattern of rising much faster than G.D.P., making Medicare and other health programs increasingly unaffordable. In fact, however, Medicare costs, in particular, have been rising much less than expected. We don’t know exactly why, although cost reduction efforts in the Affordable Care Act probably played a role.

We still have an aging population, which means a rising ratio of retirees receiving benefits to workers paying taxes; the Congressional Budget Office expects combined spending on Social Security and Medicare to rise by about three percentage points of G.D.P. over the next 20 years. But this cost rise, while not small, is moderate enough that it could be offset with higher revenues.

At the same time, the Very Serious People have lost much of their influence. Their repeated predictions of fiscal crisis kept not coming true. The inflation surge of 2021-22 temporarily boosted the credibility of critics of government spending, but this credibility evaporated when dire warnings about persistent stagflation proved utterly wrong.

All of this has, I believe, encouraged Biden and his officials to stake out a firm position opposing cuts to America’s social safety net — indeed, calling for increased benefits, to be paid for with increased taxes on corporations and high-income individuals.

What about Trump? Here’s what he said: “There is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and the bad management of entitlements.” If you have trouble parsing that, it’s not you; it’s him. Trump sounded to me like a student who didn’t do the reading, trying to bluff his way through an essay question. If pressed about what “bad management” he was talking about, which theft he had in mind, he’d probably just respond with more word salad.

And desperate follow-up attempts by the Trump campaign to insist that “cutting” didn’t actually mean, well, “cutting” weren’t convincing.

Incidentally, Social Security sees very little fraud, and if Medicare is very badly managed, how has it become so effective at cost control?

Trump gives no indication here that he really knows what he’s talking about. What that could mean in practice, however, is that if he gets back to the White House, he’ll do for Social Security and Medicare what he did in his almost successful attempt to replace Obamacare: leave the drafting of legislation to right-wing ideologues who do understand how the programs work — and who want to gut them.

One final point: Trump’s plan for a draconian crackdown on immigration would be a disaster on many fronts, but one important consideration is that it would have a catastrophic impact on the future finances of Social Security and Medicare. Why? Because at this point, immigration is crucial for growth in the working-age population, whose taxes support retirees.

So will Social Security and Medicare be on the ballot this November? Definitely. Biden has a clear plan to preserve these programs; Trump, wittingly or unwittingly, would probably help wreck them.

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20 thoughts on “Just One Of Many Reasons …”

  1. tRump, as usual, is a lying sack of dog feces:

    “In a piece over the weekend, Washington Post reporters Amy Wang and Azi Paybarah pointed out that Donald Trump—who lately has been talking, like so many politicians before him, about targeting waste and fraud in Social Security and Medicare—granted clemency or pardons to key perpetrators of Medicare fraud while president.   

    Exhibit A is nursing home kingpin Philip Esformes, recently profiled by Mother Jones, who in 2019 was tried, convicted, and sentenced to 20 years in prison in connection with the most egregious stint of Medicare fraud in history, involving some $1.3 billion in bogus claims, according to the Justice Department.”

    https://www.motherjones.com/politics/2024/03/philip-esformes-donald-trump-clemency-medicare-fraudif/

    Like

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  3. Jill, good post. A couple of comments:

    -LBJ’s war on poverty that improved Social Security and added Medicare and Medicaid actually worked with respect to retirees significantly helping out.

    -Ronald Reagan recorded long playing albums back in the early to mid 1960s with his cautions on implementing Medicare. This ironic, because 20 years later he helped shore up Social Security financing.

    -We do need to again shore up the financing of Social Security and Medicare as we continue to age as a country. The ratio of retirees to workers has been on the rise for some time.

    -As for Trump, listening to what he plans to do is a fool’s errand as he really does not have “command” of most issues as he does not care to study them (per an attorney who used to work for him).

    Keith

    Liked by 3 people

    • PS – To clear up a few misunderstandings that most Americans have, employees contribute only 1/2 of the cost to Social Security and Medicare, with employers matching the FICA contributions. The Maximum Taxable Wage Base applies only to Social Security and not Medicare contributions. Social Security benefits are front loaded – when a person’s AIME (Average Indexed Monthly Earnings) are calculated, the Social Security benefit is derived by multiplying the result by 90% up to a limit, then 32% above that up to a limit, then 15% above that up to the Maximum Taxable Wage Base (TWB). I mention this as eliminating the Maximum TWB would actually bring in more revenue in increased contributions than would be paid out.

      It should be noted the recurring pension under Social Security is a good way to manage risk for a retiree as it can be used to pay for everyday expenses up to a point. Social Security has always been intended to be part of a three legged stool – with employer plans and individual savings – to pay for retirement. While stopping short of investment advice, I strongly advise younger folks to save as much as they can in their employer plans, especially if their contributions are matched. The money saved is portable and you can take all vested benefits and place them in an IRA, another employer plan or leave them in your old employer plan if a certain amount.

      Keith

      Liked by 3 people

      • No argument there. BUT … I do need to say one thing about your advice to young people to take advantage of 401(k) and other employer-employee savings programs. I fully agree, but … unfortunately there are millions of people who do not have access to those programs, or whose wages are so little that they cannot afford to take advantage of a retirement savings program, for they need every dime they can get just to pay their bills and put food on the table. Those people too often fly under the radar when we talk about these things.

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    • All good points. I was not aware that Reagan recorded LPs critical of Medicare! I agree that we need to re-think how both SS and Medicare are funded for the future, but that’s not an invitation to cut or slash the program, merely to review and enhance future funding. My fear is … you give today’s Republican party a butter knife for them to spread butter on their rolls, and they’ll sharpen it into a dagger and use it to stab you in the back! Agreed about Trump … the greater danger there is that there are some powerful forces advising him, people who do not have our best interest at heart, but rather their own.

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  4. I don’t know how they can say it’s stealing from the rich to give to the lazy. I know dozens of people who worked “under the table jobs” … I was one of them, although I always had an “on-the-books” job as well … not because I wanted to pay into the system, it just worked out that way. I never realized that under the table jobs don’t pay into your SS & Medicare! I’m lucky to have made as much as I did to be able to live as well as I do, not that I’m living high off the hog or anything. But at least I can get my medical needs seen to & I have most everything I need. My secondary insurance is Medicaid because I don’t have very much; I get HEAP to help out with heating costs in the winter & I get food stamps (which have been cut AGAIN). 

    But the people I know who worked nothing but under the table jobs … bars, restaurants, lawncare, etc. … are working long into their 70s. I know a 90-year-old man who is cleaning a bar every morning. Many of them have almost nothing at all. They live in tiny apartments or with family or with roommates. They have no health insurance except the cheapest Obamacare, which isn’t cheap by a long shot. 

    All I can think is … it’s the same thing I thought during COVID … THEY WANT US ALL DEAD.

    Liked by 2 people

    • Exactly so! Social Security and Medicaid are NOT ‘entitlement programs’, for we paid into them all our lives! When Congress continues to refuse to raise the minimum wage rate for decades, then it becomes impossible to save a ‘nest egg’ for our retirement, as it takes every cent we make to pay rent, utilities, and buy food. And yet, we’re the “lazy” ones??? I wonder when any of those rich dudes last lifted a finger in any form of manual labour? Grrrrrrrrrrrrrrrr …

      Liked by 1 person

      • Even if it isn’t manual labor, work is work. If you’re an office worker, you’re not doing manual labor, but you’re still working hard. A lot of my office work was temp jobs, I worked all over the place. I had to be able to learn quickly & be able to retain what I learned. 

        Liked by 1 person

  6. We pay for those items. If there is any “entitlement” (a Republican frame from the 80s on through the Tea Party, and now everyone says it, grr) it is because we pay for it. Rich people pay, but interestingly, they pay no more than the rest of us, because there is a cap on deductions on income above a certain amount. You can also bet that every wealthy person collects their Medicare and SS! We really need to take the frame back on these, as well as defend them as revenue-neutral, which both sides agree when pressed, because we’ve already paid for them. If Republicans are interested in doing any more damage to Medicare and SS than they did under GW, maybe they’d like to outline how they’ll repay us our money as well.

    Getting rid of the income cap, or else raising it significantly in light of the numbers of US million-and billionaires who exist, needs to be thrown back in the faces of Republicans. They just want our money to give to the Pentagon and the wealthy through yet further tax cuts. More grr.

    The Equinox is around the corner. The atmosphere seems to have me in Amazon mode. Don’t worry. 🌞🖖

    Liked by 2 people

    • Exactly!!! Every paycheck we receive during our working life goes to pay for our future retirement. If we invested that money in another way, we would potentially be far better off, but we pay into Social Security to help others today and provide a safety net for ourselves later. And now, the Republican Party wants to call us “lazy” and take away what we already earned??? I second your “Grrrrrrrrrrrrrrrrrr” and add my own … Grrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr

      Liked by 2 people

      • You don’t know if you would be better off if you had invested your money in another way & you probably wouldn’t be. I know lots of union guys; my one friend lost 1/3 of his pension because the union invested with Bernie Madoff. Another guy lost 10K this past year because the union invested on the stock market. Investing in stocks is all very well & good but if you don’t work with a broker who really knows what he/she is doing, the chances are you’re going to lose. 

        The entire reason SS was set up was because of the stock market crash & so many people, rich people as well as ordinary people, losing everything they had. You don’t lose with SS. Unless you vote for Republicans.

        Liked by 3 people

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