Social Security a hot topic even as GOP says it’s ‘off the table’

Coming out of Wednesday's fiscal talks with President Biden, Speaker Kevin McCarthy (R-CA) wouldn't discuss details of the budget cuts he'll seek in the months ahead except for one: when asked about Medicare and Social Security he said "no, we're not talking about that."

So, at least, can that one issue be set aside during the coming months of debt ceiling negotiations? Don't count on it.

America's two biggest entitlement programs—which make up about a third of the federal budget—are all but certain to remain at the center of the debate at least when Democrats are in front of microphones. McCarthy recently promised that these entitlement programs are "off the table." But Democrats say the math simply doesn't add up if the Speaker wants to achieve a balanced budget and raising taxes are also off the table.

And the pattern repeated on Wednesday night following the Oval Office meeting.

"The real issue is, do the Republicans have a plan and what is that plan?" outgoing White House Chief of Staff Ron Klain said in an MSNBC interview. "Some Republicans say they’re going to cut Social Security and Medicare. Some say they aren’t."

Fuel for the Dems' concern: In spite of reports that GOP leaders are backing away from the idea of cuts behind closed doors, is that McCarthy has said “we've got to make sure we strengthen” the programs. He also referenced a GOP document from the last campaign that makes mention of the desire to “save and strengthen“ Social Security and Medicare.

Those words, some say, are simply a euphemism for benefit cuts as the two giant trust funds are set to run low in the coming years.

“I don't trust them as far as I can throw them,” says Alex Lawson of Social Security Works in an interview this week before McCarthy and Biden sat down. His group – aligned with figures like Sen. Bernie Sanders (I-VT) – want to see increased payroll taxes to shore up the program. (And also increased payouts) The group also signed onto a new progressive coalition this week, which is asking lawmakers to sign a pledge to never cut the programs.

An advantageous issue for Democrats, which Republicans keep bringing up

Lawson’s message has been joined by a drumbeat of nearly daily communications from the White House. McCarthy “winked his approval for Medicare and Social Security cuts,” White House spokesperson Andrew Bates said Monday. "What are House Republicans hiding?" he added in yet another message Wednesday.

The topic is clearly being amplified by Democrats in significant part because of the political advantages it affords them. But Republicans help their cause when certain lawmakers keep bringing up the idea of entitlement cuts.

Most notably, the influential Republican Study Committee, released a plan for the FY 2022 budget that included cuts to mandatory spending by over $10 trillion. Their plan would also “reform the full retirement age to track life expectancy.” In other words: increase the age when benefits are available.

The Republican Study Committee is led by Kevin Hern (R-OK) and lists 165 GOP representatives as members.

The issue also came up again and again on the 2022 campaign trail as well as in conversations this year about different approaches, which could result in trimming benefits.

Another idea with strong GOP support is a bill called the TRUST act, championed by Sen. Mitt Romney (R-UT), which would create congressional panels with special powers to examine changes to Social Security and Medicare. The goal: a comprehensive bipartisan solution very likely to include some benefit cuts to make the programs solvent.

But McCarthy himself has repeatedly called for a deal that moves the country towards a balanced budget while simultaneously also saying he'd put Medicare and Social Security "to the side." In recent days, McCarthy appears to be hedging on some of his colleagues' calls for a balanced budget in 10 years, talking more about "a path to balance."

Meanwhile some Republicans are urging their colleagues to drop it and defuse an issue that Democrats are clearly more than happy to amplify.

Former President Donald Trump weighed in recently warning “under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security,” and Sen. Josh Hawley (R-MO) announced this week that he was putting forth a bill to put an end to “scare tactics” around the program.

Politicians in both parties should quit using Social Security and Medicare as bargaining chips. I’m introducing legislation to exempt both programs from the debt ceiling. No more scare tactics

— Josh Hawley (@HawleyMO) January 31, 2023

‘He's been through this before’

Meanwhile outside of the political fight, a recent government trustees report found that, with no action from Congress, Social Security only has the funds to continue paying out current benefits through 2034. A key Medicare trust fund likely to run low even earlier, by 2028.

Democrats largely remain focused on plans to increase revenues to pay for the program (and perhaps even increase benefits). On Tuesday, Rep. Gwen Moore (D-WI) reintroduced her bill which would lift the cap on payroll taxes and increase benefits in the program. Another effort with numerous Democrats behind it is called Social Security 2100 with similar provisions.

Asked about his expectations how things will play out, Lawson said he still expects the President won't move if it ever comes to the question of negotiating over Social Security and Medicare.

“He's been through this before,” he says about Biden experience during debt ceiling fights during the Obama administration. “I've seen things to indicate that those lessons President Biden took really well from how President Obama dealt with the Tea party and consistently got played by them because he would give him the benefit of the doubt when they didn't deserve it."

Ben Werschkul is Washington correspondent for Yahoo Finance.

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