Democrats Dismiss Solvency Fearmongering While Offering Social Security Fix
Following a dramatic State of the Union moment in which President Joe Biden called out Republican proposals to slash Social Security and Medicare, the language we’ve long used to describe these programs, and potential adjustments to them, has taken center stage.
Republicans have insisted that their efforts to cut or undermine Social Security are in fact necessary efforts to save it. This is nothing new. Those ideologically opposed to Social Security have often used questions around its “solvency” as an entry point to propose cuts, or overhauling the program altogether.
“People who want to cut back on Social Security almost always say the program is broke,” Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, told TPM. “So we have to make big changes.”
Some Republicans, including Mike Pence Thursday, propose massive changes like privatizing the program, an echo of what former President George W. Bush so unsuccessfully tried in 2005.
“The solvency issue is meant to confuse people, used to alarm people,” Timothy McBride, a professor at Washington University in St. Louis and an expert on Medicare, Medicaid and Social Security, added. “The cynic in me thinks they’re trying to drive people into lowering the support for the program.”
These experts, like the staunchest defenders of Social Security on Capitol Hill, acknowledge that changes will have to be made to keep the program above water — declining birth rates and a rapidly retiring Baby Boomer generation will leave the program short of the funds it needs to pay benefits in full by 2034, per the Social Security board of trustees.
But Democrats and advocates of the program think the problem could be solved with a few adjustments.
Sens. Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) introduced their bill this week to extend the program’s solvency “effectively until the end of this century,” as Warren put it to TPM.
The bill would expand benefits by $2,400 a year, and would be offset by raising the payroll tax cap. Currently, only income up to $160,000 is taxed; the senators’ bill would tax income over $250,000.
They introduced similar legislation last summer, and are now angling to bring tax increases to the forefront of the conversation while the White House wallops Republicans for their plans to cut the programs.
“When you have a situation where somebody who makes $100 million a year contributes the same amount into the Social Security trust as somebody making $160,000, obviously, an essential part of the solution is to lift that cap,” Sanders told TPM. “No one thinks that that’s fair.”
Warren said it’s always been understood that Social Security would have to be tweaked to keep it solvent, as social patterns in America shift.
“When the Social Security system was established back in the 1930s, we understood as a nation that we would need to make adjustments all along. People would live longer, women would work, different occupations would be covered,” she told TPM. “Between the 1930s and the late 1980s, there were adjustments made dozens of times — small adjustments, no big cliffs, but it kept the program solvent and serving the people who needed it.”
“Then, in the late ‘80s, the Republicans put a stop to that. And so the system began to get a little more economically unstable and a little more economically unstable and a little more economically unstable,” she added. “Now we’re at a place where we need to make a significant change in the revenues, as well as the payouts.”
Biden too is going on the offensive, suggesting that his upcoming budget proposal will extend the solvency of Medicare with tax hikes.
“We’re going to extend the Medicare Trust Fund at least two decades, because that’s going to be the next argument: how do we make — keep it solvent. Right?” he said during the State of the Union earlier this month. “Well, I will not raise taxes on anyone making under 400 grand. But we’ll pay for it the way we talked about tonight: by making sure that the wealthy and big corporations pay their fair share.”
As Democrats attack Republicans relentlessly for their interest in cutting the programs, forcing them to answer questions on the topic again and again, now they’re starting to spin the conversation forward with policy proposals to keep the programs healthy.
Debates about Democrats wanting to raise taxes versus Republicans wanting to cut benefits to fund the programs inspire some déjà vu; a similar conversation led to repeated impasses particularly during the 2011 battles while Republicans threatened to let the country default on its debt. But in the decade since, Democrats have become less willing to play by Republicans’ terms, to let them define Medicare and Social Security as hopelessly flawed programs barreling towards bankruptcy anyway — and thus obvious targets for severe cuts.