What's going on with Social Security in the House and Senate?

As part of the ongoing negotiations over the debt limit, some Republicans in both the Senate and the House are floating the idea of Social Security reform as a way to trim some costs from the budget. The program is currently projected to reach a point of insolvency in approximately twelve years without some changes being made, but any suggestion of reductions in benefits has historically been met with significant public resistance.

Also, the Democrats are already licking their chops at the prospect of Republicans asking for cuts. “We tried to warn you! If you give any power to the GOP they’ll try to end Social Security!” It’s precisely the message they would love to carry into the presidential primary season. But it’s also getting harder for the swamp creatures to ignore the elephant in the room.

There’s a slim possibility that this doesn’t have to turn into the same political football that it’s historically become. We’ve already heard reports that Senators  Bill Cassidy (R-La.) and Angus King (I-Maine) have been sketching out some sort of bipartisan compromise to “protect” Social Security, but we still don’t know what that would look like or how much broad support it might garner.

Senate Republicans are generally leaving debt ceiling negotiations to the GOP-controlled House. 

But separately, there has been growing chatter from both parties in the upper chamber about potential ways to help protect Social Security, which some estimates say is on track to becoming insolvent in about 12 years. 

Sen. Cynthia Lummis (R-Wyo.) said on Monday that she plans to meet with Cassidy later this week about a proposal, when asked about the prospects of a bipartisan compromise to protect the program. 

“He’s got a proposal, and I don’t know how many senators he has vetted his proposal, but I’m anxious to learn about it,” Lummis said, adding she thinks “he’s making the rounds.” 

On the other side of the aisle, Sen. Joe Manchin (D-W.Va.), a key centrist, recently suggested raising the taxable wage cap for the program.  

“If you want to have a quick fix, you have enough cash so people can continue to get the benefits that they’ve earned and worked for, the easiest ways to raise the cap,” Manchin said, though he wouldn’t say whether the idea would be able to pass in the divided Congress.  

The proposals in the Senate come as House lawmakers and the White House spar over whether to include Social Security and other entitlement programs like Medicare in negotiations over raising the debt limit. 

Treasury Secretary Janet Yellen notified congressional leaders last week that her office will begin to implement “extraordinary measures” to keep the U.S. government from defaulting on its debt, which recently surpassed the roughly $31.4 trillion threshold set by Congress more than a year ago. 

Yellen said the steps should buy Congress until early June to hash out a bipartisan plan, setting off a high-stakes battle in Washington. 

Raising the debt limit would allow the government to pay for programs it has already approved, not authorize any new spending. But House Republicans have pressed for any action on the debt ceiling to be paired with significant fiscal reform, but the party is still working out its strategy mapping out demands for the months ahead.   

There are divisions over whether those reforms should include entitlement programs, which eat up large chunks of federal spending — federal data showed Social Security alone accounted for about 20 percent of government spending in fiscal 2022, while Medicare made up 12 percent. 

Democrats, by contrast, have instead insisted on a clean bill to address the debt ceiling, while demanding Republicans provide specifics about the areas they want to cut. 

“If Republicans are talking about draconian cuts, they have an obligation to show Americans what those cuts are and let the public react. … Does that mean cuts to Social Security or Medicare or child care or Pell Grants?” Senate Majority Leader Charles Schumer (D-N.Y.) said from the Senate floor on Monday. 

But despite some support in the Senate for taking on entitlement funding reforms sooner rather than later, there is doubt among lawmakers and experts of the chances of Congress being able to move legislation to help protect either Social Security or Medicare in the current session.  

Sen. Marco Rubio (R-Fla.) said “ideally” reforms for the programs would be on the table for debt limit talks, but added the debt ceiling “has proved to be very poor leverage for those kinds of fights, primarily because there’s very little interest in defaulting on debt.” 

Senate Majority Whip Dick Durbin (D-Ill.) also cast doubt on the likelihood of Congress reaching a bipartisan compromise, sizing up some hopes from lawmakers as “whistling past the graveyard.” 

“I was on the Simpson-Bowles commission,” he said. “We spent a year laboring to put together a bipartisan bill and the Republicans walked out at the end of it. So, I’m not very encouraged.” 

When considering changes (read as “cuts”) to Social Security, we need to consider both the fiscal reality and the political reality. In fiscal terms, is the Social Security system bloated, strained, and going broke? Of course it is. We’ve applied various bandaids to it over the past few decades, but those changes were never permanent “fixes.” The light at the end of the tunnel is an oncoming train, but it’s one of those problems that are too large, complicated, and daunting to tackle head-on.

Now let’s give a nod to the political realities that are involved with this. New cuts could be made to at least push the inevitable doomsday scenario further down the road. And that would be the fiscally responsible thing to do. But any proposal that would include cuts to Social Security would be almost universally unpopular and the cuts would pretty much exclusively impact people above the age of 60. As you are likely aware, that demographic is traditionally the GOP’s strongest part of its base.

If you want to tank the GOP’s promising roadmap to take back the Senate in 2024 (to say nothing of the White House), just talk about cutting Social Security benefits. This scenario is probably more of a red flag now than it has been in decades because the average amount of savings held by middle-class Americans dropped significantly during the recession and price spikes of 2022 after seeing a period of growth during the pandemic. People who are looking at a diminished retirement piggy bank aren’t going to want to hear about cuts to their Social Security benefits.

If the GOP can get the Democrats to go along with a bipartisan plan to extend the life of the Social Security system, that would be great and I would readily support it. But they would be fools to try to walk that plank alone.

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