|Will Republicans Cut Social Security And Medicare For Poor And Elderly To Pay For Their Tax Plan?|
Senate Democrats are warning constituents that the newly passed Republican tax overhaul could lead to significant cuts to Social Security, Medicare and other entitlement programs.
President Donald Trump said last week that entitlement cuts will, “take place right after taxes, very soon, very shortly after taxes" despite promising on the campaign trail that he would not touch entitlement programs. “I’m not going to cut Social Security like every other Republican, and I’m not going to cut Medicare or Medicaid,” he said as a candidate.
Key Democrats are already campaigning against the potential cuts. “[The Republican] dream has been to undo those programs, give massive tax breaks to those who don't need them, and take us back to the 1920s," said Vermont Senator Bernie Sanders at a rally on Sunday. Democratic Oregon Senator Ron Wyden agrees. “Republicans are already saying 'entitlement reform' and 'welfare reform' are next up on the docket. But nobody should be fooled—that’s just code for attacks on Medicaid, on Medicare, on Social Security, on anti-hunger programs," he said.
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Republicans may be planning cuts to Social Security and Medicare. Reuters
During a Missouri speech that focused mostly on tax reform, Trump said: “I know people that work three jobs and they live next to somebody who doesn't work at all,” he said. “And the person who is not working at all and has no intention of working at all is making more money and doing better than the person that's working his and her **** off. And it's not going to happen.” Trump was presumably referring to welfare abusers, not Americans who had inherited their wealth.
The argument that some abuse the system isn’t new. President Ronald Reagan used it when he talked about “Welfare Queens” driving Cadillacs in 1976. Reagan went on to advocate for a bill that reduced entitlement spending to pay for tax cuts. “Government budgets benefit directly from the reduction in welfare subsidies, Social Security outlays and unemployment benefits, yada, yada, yada — all due to the tax cuts,” wrote Arthur Laffer, a member of the Reagan administration and current Trump adviser.
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While politicians sometimes equate reform with reducing benefits fraud, the amount of waste from misuse of funds is relatively insignificant. According to the Social Security Administration, all improper payments, including payments to the deceased and the very old, are estimated at about $3 billion per year. That’s around 0.4 percent of the total Social Security cost, and eliminating all fraud would only extend the program's solvency by three months.
Social Security and Medicare are both rapidly approaching insolvency—Medicare’s hospital insurance trust fund will be exhausted by 2029, and Social Security’s trust fund will be exhausted by 2034. Reform is necessary, but aiming to decrease fraud or to cut funding will not help the programs stay afloat.
“This is a tax bill that’s coming after Medicare and Medicaid cuts,” said Eliot Fishman, senior director of health policy at Families USA. “It’s fundamentally step one of a two-step process. Nobody should be under any illusions otherwise.”
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U.S. President Donald Trump speaks at the Utah State Capitol in Salt Lake City, Utah, December 4. Kevin Lamarque/Reuters
Senator Marco Rubio (R-Fla.) indicated on Wednesday that “reform” means cutting funds. Tax policy won’t directly impact the deficit, he said, only increasing economic growth and limiting the costs of Social Security and Medicare can bring the national debt under control.
The nonpartisan Congressional Budget Office, however, estimates that the tax bill will add $1.4 trillion to the deficit, and the Joint Committee on Taxation estimates that even with high levels of growth, $1 trillion would be added to the federal debt.
“The Republicans are now looking for ways to continue to advance their ideological agenda and their donors' interests, and it would not be surprising to me if they went after entitlement programs as the next step,” said William Gale, co-director of the nonpartisan Tax Policy Center. “But if they make claims that the nation can't afford the programs, that should be seen as hypocrisy, given the tax cuts they have all just voted for."
Medicare and Social Security mainly benefit retirees older than 65, but also provide essential lifelines for disabled Americans who are unable to work.
This article was first written by Newsweek
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