While spending for Social Security, Medicare, and Medicaid does not need to be appropriated each year because they are “mandatory spending,” what TSCL is watching this year is authorizing legislation that Congress could use to cut spending on those programs.
The bill to raise the debt ceiling supposedly kept Social Security, Medicare, and Medicaid off the list of programs that will see cuts in spending for fy2024. The Senate, which the Democrats control, has said it will abide by the debt ceiling agreement regarding spending.
We thought that would be the same in the House of Representatives, which the Republicans control. However, the largest block of Republicans in the House released a proposed budget plan in the middle of June that contains $16.3 trillion in spending cuts that would result in major cuts and changes in spending for Social Security and Medicare, according to news reports.
The plan offered by the 175-member Republican Study Committee would gradually raise the age at which future retirees can start claiming full Social Security benefits from 67 to 69. In addition, it would subsidize private insurance options that compete with traditional Medicare.
In other words, even though a severe financial shortfall for Medicare is threatening in the near future, this budget would give money to private insurance companies to compete with Medicare.
The plan also promises to shore up the solvency of Social Security and Medicare, though the budget document is light on details.
Senate Finance Committee Chair Ron Wyden (D-Ore.) slammed the plan. According to Wyden, “This plan should inform all Americans where Republicans’ priorities lie: showering riches on mega-corporations and wealthy tax cheats and cutting your earned benefits by raising the retirement age and undermining Medicare’s guarantee of health care benefits. Their plan lets Big Pharma off the hook by repealing Medicare’s authority to negotiate drug prices that Democrats passed last year, and slashes Medicaid to the bone, which will threaten critical care like the program’s nursing home benefit that our parents count on.”
The Democrats have been focusing on reducing those two programs' budget shortfalls by reining in Medicare prescription drug costs and raising Medicare and Social Security payroll taxes on high-income earners.
