This is one of the hottest topics in Washington right now. Because it’s so important to seniors, we want to recap the issue for you.
The crisis has come about because the federal government will sometime in the coming months run out of money with which to pay its bills. That is a result of the “debt ceiling,” which is a legal limit on the amount of money the government can borrow.
A legally imposed debt ceiling (debt limit) has been in effect since 1917. Before then there was no debt ceiling in force, but there were parliamentary procedural limitations on the amount of debt that could be issued by the government.
Except for about a year during 1835–1836, the United States has continuously had a fluctuating public debt since the US Constitution legally went into effect on March 4, 1789.
The situation could be easily remedied if Congress would pass a bill raising the debt ceiling, something which it did 78 times since it was enacted, including twice under President Trump, and the first time with a Republican-controlled Congress.
Remember, raising the debt limit would allow the government to pay for programs it has already approved, not authorize any new spending.
However, if the Treasury and Congress fail to reach an agreement to increase the borrowing limit, the U.S. government risks defaulting on its debt. It has never happened before but could lead to serious economic consequences, including the inability to make Social Security and Medicare payments.
Some Republicans in the House of Representatives, where they have a slim majority, are threatening not to raise the debt ceiling unless there are cuts to future government spending.
While it’s true that House Speaker Kevin McCarthy has said they will not touch Social Security or Medicare, other Republicans in the House have said the opposite.
“I’m all for a balanced budget, but we’re not going to do it on the backs of our troops and our military,” Rep. Michael Waltz (R-Fla.) told Fox Business last week. “If we really want to talk about the debt and spending, it’s the entitlement programs.” [note: Social Security and Medicare are entitlement programs as defined by the government].
"We have no choice but to make hard decisions," Rep. Kevin Hern of Oklahoma, leader of the conservative Republican Study Committee, according to a report in The Washington Post. "Everybody has to look at everything."
The Post also reported that in recent days, a group of Republican lawmakers have pushed for House panels that would recommend changes to Social Security and Medicare.
According to an article in Business Insider, “GOP leaders gave a slide presentation to Republican House members on Tuesday outlining their budget and spending priorities, CNN reported. According to a screenshot of the presentation viewed by CNN, the spending priorities were vague but mentioned reforms to "mandatory spending programs" that could include Social Security and Medicare.
The Hill newspaper has reported that, “Some senators are eyeing a divided Congress as an opportunity to tackle reforms to Social Security, as the program faces significant solvency issues in little more than a decade.
However, when Republicans have dealt with Social Security and Medicare in the past they have done it by privatizing parts if Medicare (under President George W. Bush, who also wanted to extend that push to Social Security. And former Speaker Paul Ryan (R-Wis.) used that perch to propose annual budgets that ended traditional Medicare, turning it into a voucher program, and privatized Social Security.
That’s why a White House spokesman has argued that the only option for the GOP to “save” the entitlement programs is to make cuts, because House Republicans have ruled out raising more revenue from tax increases on the wealthy.
As a former Chairman of the Council of Economic Advisers has said, “The debt limit situation is the scariest it’s been in the 25 years I’ve been working on these issues.” He also stated that he believes there’s a 15% chance of a default. “It still probably will be resolved, but if my doctor told me I was ‘probably’ going to live, I wouldn’t find that diagnosis very reassuring.”
Finally, we want to emphasize once again that TSCL is a non-partisan organization. We work with members of Congress from both political parties whenever they support legislation that is in the best interests of seniors, and we oppose them when we believe they will hurt seniors.
But all the talk now about cuts to Social Security and Medicare as a way to help cut government spending is coming only from one side and we oppose those cuts.
You can rest assured that TSCL will be fighting to stop any cuts to the programs that seniors have earned that may be proposed in Congress. In the meantime, we urge you to call your Senators and your Representative and tell them you are absolutely opposed to cutting Social Security or Medicare/Medicaid.