Why you should care
Because an aging nation made promises that will be hard to keep.
Kelly Neely, a tax collector from York, Pennsylvania, is worried about soaring national debt. The Donald Trump supporter — who voted for Barack Obama in 2012 — wants to solve it partly by eradicating programs such as $1.5 billion in subsidized phone service for poor people. (Or, as Neely called the Federal Communications Commission initiative launched in 1984, “Obamaphones.”)
Neely wants to hunt for fraud in the massive Medicare, Medicaid and Social Security programs. “But as far as cuts? No.” Defying fiscal hawks, her president agrees — marking a profound shift for the Republican Party in the Trump era that shows no signs of abating.
As he was preparing to run for president in 2015, Trump told the conservative Heritage Foundation publication The Daily Signal: “I’m not going to cut Social Security like every other Republican, and I’m not going to cut Medicare or Medicaid.” He kept up the rhetoric on the campaign trail and in office, channeling base voters like Neely. In April, he told CBS News he would tackle “waste, fraud and abuse,” but “the concept of Medicare, I’m not touching.”
We need to make relatively minor changes in entitlement programs … but it’s got to be led from the White House.
Whit Ayres, Republican pollster
Leading Republicans have long held other ideas. In 2005, President George W. Bush tried to shift Social Security toward private accounts but backed down amid public scorn for the idea. House Speaker Paul Ryan’s rise coincided with his plans to privatize Medicare for future recipients with federal subsidies for seniors to buy plans, and convert federal Medicaid payments to states into a set amount rather than a percentage of costs. Near-uniform GOP support in Congress and Ryan’s placement on the presidential ticket in 2012 further legitimized his plans as party orthodoxy. Trump derailed that talk, like he did so many other things.
Trump is expected to keep to his hands-off approach in his budget proposal this week. Republicans in Congress are expected to again put forth Medicare and Medicaid restructuring in their own budget. (The Bush implosion has scared them off Social Security — for now.) But budget resolutions do not carry the force of law. Trump is open to changing Medicaid, the health insurance program for the needy, which was on the chopping block in the House Republicans’ remake of Obamacare. But there’s little appetite on either end of Pennsylvania Avenue to fiddle with seniors’ cherished entitlements — and the odds plunge further with the White House in legal turmoil. It’s a long way from just a couple years ago.
“There seems to be less of an understanding among members of Congress about how serious these problems are and what’s necessary to fix them,” says Maya MacGuineas, the president of the Committee for a Responsible Federal Budget. “I hear them talk without irony about the need to get the budget under control, and part of that is not touching Social Security and Medicare. I think we need to go back to Budget 101.”
The lesson, in brief: America is aging, and we’ve made a lot of expensive promises to old people that will be hard to keep. The federal government delivered $910 billion in Social Security checks last year, and the nonpartisan Congressional Budget Office projects it will pay out $1.68 trillion in 2027. Medicare will go from $692 billion to $1.4 trillion. Both programs are backed by trust funds, though on their current course, Medicare will be unable to pay out full hospital benefits by 2028 and Social Security hits that mark by 2034.
By comparison, nonmandatory spending, from the military to the FBI to the Environmental Protection Agency, hit $1.18 trillion last year, and CBO projects it to rise to $1.48 trillion by 2027. (Trump has proposed cutting domestic agencies but with corresponding increases to military spending.)
Trimming the federal government’s biggest line items is a tough political argument. And “Mediscare” is a time-honored tactic from both parties. The Ryan plan for Medicare — labeled “premium support” or “vouchers,” depending on your side’s spin — remains unpopular: A Kaiser Family Fund survey in 2015 found that just 31 percent of Republicans and 26 percent of all respondents supported the plan. And that was before Trump launched his presidential bid.
Veteran GOP pollster Whit Ayres says the party base’s policy views are now “flowing from the top down rather than the bottom up,” pointing to Trump’s views on foreign trade turning Republicans’ usual position on its head. And selling entitlement changes as necessary to balance the budget doesn’t really work. “On the other hand, Republicans can successfully argue that we need to make relatively minor changes in entitlement programs to preserve and protect these important programs for future generations,” Ayres says. “That is a winning argument. But it’s got to be led from the White House.”
While that line matches the rhetoric Ryan and his colleagues — such as new Trump administration Health and Human Services Secretary Tom Price — have used for years, Trump has not yet bought in. Texas Republican Rep. Kevin Brady, the chairman of the tax-writing Ways and Means Committee and a 20-year congressional veteran, says Medicare should shift to reward providers for quality of care rather than the sheer amount of treatment — a potentially bipartisan goal that could be accomplished with several bills rather than one thunderclap. Big changes to Social Security will require “a very long national discussion,” Brady adds.
Republicans eager for entitlement cuts won’t be able to count on much help from Democrats — the party that enacted most of the programs in the first place — as their own base moves leftward. An increasing number of lawmakers now favor a single-payer health plan for the country, otherwise known as “Medicare for all.”
Staff reporter Nick Fouriezos contributed to this story.