With the 2012 election over, attention has turned to the so-called “fiscal cliff,” the package of expiring tax cuts and automatic spending cuts that will hit at the end of the year unless Congress decides to avert it beforehand. The debt ceiling will also need to be raised soon, and the negotiations between Democratic and Republican leaders has already taken a familiar turn toward entitlement spending and new revenues, with House Speaker John Boehner telling ABC News that he’d be willing to consider talking about new revenues (sort of) if President Obama and Democrats get serious about entitlement reform.
“I would do that if the president was serious about solving our spending problem and trying to secure our entitlement programs,” Boehner said in an interview with ABC’s Diane Sawyer last night. “If you’re increasing taxes on small-business people, it’s the wrong approach.”
Senate Majority Leader Harry Reid (D-NV), struck a different tone. “We are not going to mess with Social Security,” Reid said yesterday, according to Reuters.
While entitlements have become a consistent focus of Republican leaders like Boehner, Majority Leader Eric Cantor (R-VA), and House Budget Committee Chairman Paul Ryan (R-WI), why they must be a part of the end-of-year negotiations isn’t quite clear. Though the media is quick to buy into the idea that Social Security is going broke, the program is fully-funded for the next two-and-a-half decades, a luxury that other important federal programs that are funded on a year-to-year (or budget resolution to budget resolution) never have.
Republicans in the past have ignored the easiest ways to ensure Social Security’s long-term future, proposing benefit cuts in the form of raising the retirement age or changes to the formula used to calculate benefits. Instead, raising or eliminating the payroll tax cap that funds the program could ensure its long-term viability for another 75 years, according to the non-partisan Congressional Research Service.
Medicare, meanwhile, has already been reformed, when Obama signed the Affordable Care Act in 2010. That law, which Republicans repeatedly tried to repeal, cut $716 billion from Medicare without touching benefits, making reforms to provider payments, eliminating fraud, and extending its solvency for eight years. While Republicans were quick to slam Obama and Democrats for passing those cuts during the 2012 elections, they often forget it when begging Democrats to “get serious” about entitlement reform.
Medicare spending has grown at a slower pace over the last three decades than overall health spending. Cutting Medicare benefits as Republicans have proposed wouldn’t fix the growth in health care costs — it would simply shift those costs to senior citizens.