Social Security and Medicare Are Going Insolvent. Neither Biden nor Trump Has a Plan for It.
Neither of the two men most likely to be elected president in November has anything that could properly be described as a workable plan for addressing the approaching insolvency of America’s two largest entitlement programs.
This week’s news from the Social Security and Medicare trustees ought to underscore just how foolish that is. On Monday, annual reports from the officials charged with running the two old-age entitlement programs confirmed once again that the clock is ticking for both: Social Security is expected to hit insolvency in 2035, while the portion of Medicare that pays for hospital visits and other medical care will be insolvent by 2036.
Even though both projected insolvency dates have slightly improved since last year—when the trustees expected them to run out of cash reserves by 2034 and 2031, respectively—the seriousness of the problem cannot be ignored. When Social Security hits insolvency, beneficiaries will face an automatic 21 percent cut in benefits. The insolvency of Medicare’s Hospital Insurance Trust Fund will trigger an automatic 11 percent cut, which would “likely lead to significant disruptions in health care services for older individuals and those with disabilities,” according to the Committee for a Responsible Federal Budget.
It’s worth underlining that point. Those benefit cuts are not the result of future choices that might be made by Congress and the president—they are baked into the current status quo of the two programs. Without policy changes, they will eventually become a reality.
That’s a reality that neither President Joe Biden nor former President Donald Trump seem willing to acknowledge. Both leading contenders for the White House have pledged to block potential changes to Social Security—effectively a promise to keep the entitlement trains running full-speed down a dead-end track.
The Biden administration has denounced a plan drafted by some Republican lawmakers that would raise the retirement age to 69—a modest change, and one that is hardly sufficient to avert Social Security’s insolvency. Trump, meanwhile, suggested in March that he was open to “cutting” and making other changes to entitlement programs—then immediately walked back those remarks. During this year’s Republican primary, the Trump campaign ran ads targeting Florida Gov. Ron DeSantis and former South Carolina Gov. Nikki Haley for their willingness to at least talk about the need for entitlement reform.
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Article from Reason.com
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