Morning Bullets: The Most Controversial Issue of All?
Author: Greg Valliere
November 3, 2022
THE ISSUE ALREADY IS IN THE LIMELIGHT in this fall’s campaigns, and could provoke a huge political fight next year as Democrats seek a clear message after the election — and as Republicans face an issue that will be deeply divisive within the party.
AS THIS FALL’S CAMPAIGN enters the home stretch, Democrats have fired up the party’s base with charges that Social Security and Medicare benefits may be cut. President Biden and Barack Obama have made this a major theme, although it should be noted that any change would be vetoed by Biden in 2023-24. Even modest reforms are not imminent.
BUT THE DEMOCRATS ARE CORRECT that some Republicans will advocate reforms to the two entitlement programs; several Senators want to consider trimming back benefits for the wealthy, raising retirement ages and hiking payroll taxes. The concept of means-testing will be on the table.
THE THIRD RAIL: For decades, both parties agreed with the famous quip attributed to liberal House Speaker Tip O’Neill, who said Social Security is the “third rail” of politics — any politician who touches it, he said, risks electrocution.
THE IDEA OF EVEN MODEST REFORMS has backfired on politicians, notably former House Speaker Paul Ryan, who proposed modest changes in the annual inflation adjustment that determined in the system’s Cost of Living (COLA) rise. Ryan was excoriated for proposing even a slight change, and the idea of Social Security reform ran out of steam.
FAST FORWARD TO THE CLIMATE NOW, as two leading Republicans publicly advocate some reforms — ahead of an election, incredibly. Sens. Ron Johnson of Wisconsin and Rick Scott of Florida support several cutbacks, and a vote on authorizing all spending programs every five years, which theoretically would put Social Security and Medicare up for renewal regularly.
THIS IDEA HAS HORRIFIED Senate Minority Leader Mitch McConnell, who believes it could be an albatross for Republican candidates. McConnell is candid — his major goal is getting Republicans elected, period. He has declared that he would not even allow consideration of the Johnson and Scott plans, but the two GOP Senators have not been dissuaded.
SOCIAL SECURITY AND MEDICARE ARE WILDLY POPULAR, as is the 8.7% COLA rise that is coming next year. Social Security provides retirement and disability pay to 66 million Americans; Medicare provides health insurance to about 64 million people.
THERE ARE TWO MAJOR ARGUMENTS FOR CONSIDERING REFORM: The first is the issue of solvency. Trustees of the Social Security and Medicare trust funds estimate that a key Medicare trust fund will run out of money in 2028 and the main Social Security Trust Fund will be insolvent in 2034, potentially forcing cuts in benefits if Congress doesn’t act.
THE SECOND ISSUE IS THE GROWING PUBLIC AVERSION to enormous federal spending and deficits, which has been a surprise issue in this fall’s campaign. Voters believe huge annual deficits have produced high inflation; the deficits, post-pandemic, have settled into the $1 trillion neighborhood, and virtually all Republicans will push next year to reduce spending on everything except defense.
SO GET READY FOR DEBATE NEXT YEAR on an enormous political issue that finally may be out of the closet. Could there be a de-facto privatization of Medicare? Will the retirement age rise? These issues and others will be on the table, with enormous political stakes — more than virtually any other issue facing Congress.
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