If there was one memorable moment from President Biden’s 2023 State of the Union Address, it was his remarks on entitlements. Biden blasted congressional Republicans, saying, “Some Republicans want Social Security and Medicare to sunset.” Republicans in the chamber quickly tried to shout down the President, rejecting the accusation. While entitlement spending cuts are unpopular, and are frequently referred to as the “third rail of American politics,” the state of both programs suggests it is past time for policymakers to take a firm grip of that rail and figure it out.
A recent report from the Congressional Budget Office (CBO) projects the Social Security trust fund will become insolvent by the year 2032. If that happens without substantive change by Congress, benefits will decrease by at least 20 percent to keep the program going. While congressional leaders want to pretend they don’t want to cut Social Security benefits, automatic cuts will be implemented if the current trajectory isn’t altered. In the words of the legendary Canadian rock band, Rush, “If you choose not to decide, you still have made a choice.”
The outlook on Medicare isn’t any rosier. According to a report released by the Medicare Trustees, the plan’s Hospital Insurance trust fund will be insolvent by the year 2028. At that point, hospital payments will automatically be reduced by roughly ten percent to maintain solvency. Again, congressional inaction might boost poll numbers in the short term, but it is clear something must be done to avoid greater catastrophe with one or both programs.
Despite the clear data and projections, Biden doubled down on his assertion. Meanwhile, several Republicans have gone out of their way to make clear they oppose making cuts to Medicare and Social Security. Sen. Rick Scott (R-Fla.) amended his spending plan, which would have called for a review of all federal programs every five years. After the State of the Union, Scott announced Social Security and Medicare would be exempt from his “Rescue America” plan.
Former President (and now presidential candidate) Donald Trump also voiced his strong opposition to any entitlement cuts on the campaign trail in Florida. “Under no circumstances will we allow anyone to cut Medicare or Social Security for our nation’s seniors. We’re not going to allow that,” he said.
All this back and forth on entitlements comes not just in the aftermath of a State of the Union. It also comes in the midst of a debt ceiling fight. The nation is currently at risk of defaulting on its debt obligations as soon as June of this year. The Treasury Department has reached its congressionally-imposed borrowing limit. Without changes going forward, the fiscal state of the nation could be in significant peril.
Small changes are not going to alter course enough to make a difference. Leaving Social Security and Medicare out of these discussions would be unwise. According to the Treasury Department, Social Security and Medicare account for 31 percent of all government spending. And, if benefits are going to remain at the same level, they will require even more outlays in the future. This is unsustainable.
This trend was noted by former Vice President Mike Pence, who once led the conservative Republican Study Committee during his time as a member of Congress. “We’re looking at a debt crisis in this country over the next 25 years that’s driven by entitlements, and nobody in Washington wants to talk about it,” he said. With entitlements in the news and a debt crisis looming, now is exactly the time for lawmakers in Washington to start talking about entitlement cuts. They must be on the table.
There are several solutions that are feasible to address this problem. For Social Security, slowing the growth of benefits over time, with a one- or two-year increase in retirement age should be sufficient to return the program to solvency. For Medicare, certain reforms to institute cost sharing or the elimination of certain types of payments could do the same. There are options. Lawmakers on both sides of the aisle simply must agree to be creative and look at them soberly.
The pain and the consequences of reforming these entitlement programs will certainly be felt. That is why the issue has been considered so politically toxic for so long. However, they have now reached the point where doing nothing is no longer a viable option and the consequences of doing nothing will be far more painful in the long-term than making difficult decisions in the short term.
Dan Savickas is the director of policy at the Taxpayers Protection Alliance.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.