Cuts to Social Security and Medicare aren’t on the table in debt ceiling negotiations after all, according to reports out of Washington D.C. today.
Speaking to reporters after a meeting with Speaker of the House Kevin McCarthy (R-CA), centrist Sen. Joe Manchin (D-WV) said McCarthy agreed not to propose Social Security and Medicare cuts as part of the talks over the debt ceiling with President Joe Biden (according to a tweet today from Punchbowl News Senior Congressional Reporter Andrew Desiderio.
Manchin met with McCarthy to urge him to negotiate with Biden on legislation to raise the debt limit set by Congress, which the Treasury Department announced had been reached as of Jan. 19.
Absent legislation to raise the debt limit, Treasury Secretary Janet Yellen announced the department would begin taking “extraordinary measures” to keep the government paying its bills while Congress works toward raising the ceiling to avoid what everyone admits would be a catastrophic default felt worldwide. Yellen said the “extraordinary measures” would last through June 5, buying time for Congress to come to an agreement on raising the debt ceiling.
In recent weeks McCarthy had threatened to demand spending cuts targeting Social Security and Medicare as part of the debt limit fight. As part of his list of concessions to far-right conservatives in order to be elected Speaker, McCarthy reportedly agreed to cap spending for the next year at fiscal 2022 levels, which would amount to over $130 billion in cuts from last month’s $1.7 trillion government funding bill (which included SECURE 2.0).
For its part, the White House has said Biden won’t offer any concessions or negotiate on raising the debt ceiling.
“When it comes to the debt limit, the debt ceiling, the President has been very clear, I have been very clear, you’ve heard from our economics team about that—how this should be done without conditions. That still stands,” White House Press Secretary Karine Jean-Pierre said during her press briefing on Tuesday.
Manchin, making the rounds on the Sunday morning news shows last weekend, told NBC’s “Meet the Press” that “60% of my population that that’s all they have is Medicare and Social Security,” and said he won’t be going down the path to put them in jeopardy.
But he also told CNN’s “State of the Union” that a key change to help shore up Social Security’s ailing funds would be raising the cap on payroll taxes used to fund the program. “The easiest and quickest thing that we can do is raise the cap,” Manchin said.
Absent any changes, Social Security’s combined trust funds are currently projected to become depleted by 2035 with 80% of benefits payable at that time, according to the 2022 report from the Treasury Department’s Social Security Board of Trustees. A subsequent report from the Congressional Budget Office found the combined funds could be depleted by 2033.
Republicans recently proposed several changes to Social Security and Medicare in the 2023 Republican Study Committee budget, with raising the retirement age and changing the way cost-of-living adjustments are measured notable among them.
While it appears Social Security and Medicare changes will not be part of the debt limit debate, expect the topic to receive plenty of attention on Capitol Hill throughout 2023.
SEE ALSO:
• Yellen Says Debt Limit Standoff Impacting TSP’s G Fund
• Social Security Benefits Need 23% Cut in 2034 Without Action: CBO
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.