Biden Promises To Let Social Security's Ship Keep Sinking
Biden vowed to block any attempts to cut Social Security benefits, and Republicans made it clear that they have little appetite to try it.
President Joe Biden vowed Tuesday to keep Social Security and Medicare on their current course toward insolvency, promising to block any congressional attempts to reduce benefits in the two major entitlement programs.
And Republicans loudly agreed.
"If anyone tries to cut Social Security," Biden said during the State of the Union address, "if anyone tries to cut Medicare, I will stop them. I will veto it."
Except, well, it's not clear that anyone is trying to cut them. Republican leaders have also said they won't consider cuts to Social Security or Medicare as part of the upcoming debt ceiling negotiations—something Biden acknowledged after Republican members of Congress loudly protested his characterization of their plans during the speech. "Apparently, it's not going to be a problem," he declared.
But there is a problem. Social Security will be insolvent by 2034. One of the trust funds for Medicare will be insolvent even sooner. When insolvency hits, both programs will be subject to mandatory benefit cuts. The exact size of the cuts will depend on payroll tax collections in that year, but the current estimate is that Social Security will be able to pay only 80 percent of promised benefits in 2034.
As I wrote last month, when Republicans such as former President Donald Trump were making similar vows not to cut Social Security benefits: Promising to do nothing amounts to promising a roughly 20 percent benefit cut in a little more than a decade. There is no getting around that fact.
What you saw during Tuesday night's speech was a bipartisan suicide pact.
Biden's solution seems to be "make the wealthy and big corporations pay their fair share," but it's unclear what that means, since entitlement programs are funded with payroll taxes—paid by workers and employers—and not by the federal income tax. Biden is set to outline a fiscal plan next month. We may get more details then on how exactly the White House plans to deal with the entitlement crisis.
Even so, the State of the Union address would be a good time for that sort of thing. Oh well.
"Social Security and Medicare are a lifeline for millions of seniors," Biden said. "Americans have been paying into them with every single paycheck since they started working. So tonight, let's all agree to stand up for seniors."
Standing up for seniors (and everyone else who has been paying into Social Security and Medicare for their entire working lives) requires acknowledging that there is no reality in which the politicians do nothing and the entitlement programs continue functioning normally. The choice is between making changes now or accepting mandatory cuts in about a decade.
The clock is ticking, but Biden didn't give any indication Tuesday night that he's paying attention to it. And the Republicans' vociferous reaction to his remarks suggest that they're not serious about it either.