The GOP Debt Ceiling Threat to Social Security Is Real

In a May 4 article about the so-called debt ceiling crisis, the New York Times made this declaration about the looming showdown between House Republicans and the White House:

“The only point of agreement so far is on the one thing Mr. Biden and Mr. McCarthy consider off limits in budget talks: Social Security and Medicare ...”

These programs are sometimes called “entitlements,” a term that has taken on pejorative overtones in right-wing rhetoric. A better term is “mandatory spending,” since Congress has established rules for funding them. Biden’s defense of these programs, and McCarthy’s newfound diffidence toward them, reflect their enormous popularity with voters across the political spectrum. So they’re safe, right?

Not so fast.

Recent History

House Republicans have already slashed Social Security’s administrative budget. Now they’re demanding additional cuts that would make it more difficult – or impossible – for many people to collect the benefits they’ve earned. And if they carry out their threat to let the federal government default, 65 million current beneficiaries will stop receiving Social Security payments. They include the elderly, widows and widowers, disabled people, and orphaned children.

We’ve seen this kind of play before, and there are plenty of billionaire-funded think tanks that would be happy to work out the policy and public relations details.

Republicans want to cut these programs. They discussed those cuts on a video feed before last year’s election, even as they admitted that honesty about their position would amount to “political suicide.” As one House Republican said, they would “all get thrown out of office [if] we told the truth.”

On the Democratic side, it’s true that the Biden White House has staked out a very different position than the Clinton and Obama administrations. It has said it won’t accept any mandatory spending cuts. White House spokesperson Andrew Bates even dismissed the “bipartisan commission” approach, a backdoor way to cut benefits, as a "death panel for Medicare and Social Security.”

Biden’s break with his predecessors – including the one he served as vice president – is gratifying, but his staff and the Democratic policy establishment are heavily weighted toward the same misguided thinking. That leaves an opening for the sort of “compromise” that is unpopular with voters but beloved by elites.

The Power and the Politics

House Speaker Kevin McCarthy’s proclamations reflect two political realities. One is that his party’s position is extremely unpopular. The other is that its likely 2024 standard bearer, Donald Trump, has said he wants Social Security cuts off the table.

Trump, who is using the issue to distinguish himself from Ron DeSantis and other potential primary rivals, said that “under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security.’’ He also said the Florida governor is “trying to destroy Social Security and Medicare.” A pro-Trump super PAC’s ad asserted that DeSantis “has his dirty fingers all over senior entitlements.”

This is the same rhetoric Trump deployed in 2016, and it’s not to be believed. Trump called for benefit cuts in 2000, 2012, and, most importantly, in his proposed budgets as president. “Oh, we’ll be cutting,” Trump said of mandatory spending programs, “but we’re also going to have growth like you’ve never had before.”

Sure we will, pal.

For his part, Biden has broken dramatically with his own past positions. “Raising the cap, raising the retirement age for people who are now 30 years old, raising the tax on Social Security, cutting benefits,” Biden said in 2005. “They’re all things that have to be discussed, quite frankly.”

It’s a long road from there to calling bipartisan commissions “death panels.” What happened? Outside activists led the charge against Social Security and Medicare cuts, and for expanding both programs. Bernie Sanders’ candidacy galvanized Democratic opinion on the issue, which Biden is reflecting today. It’s smart politics on Biden’s part.

But voter preference is not the only driving force, or even the primary one, in a political system influenced by large contributions and favorable coverage from the mainstream media. That’s why presidents Clinton and Obama openly discussed mandatory-spending cuts, and why Obama created a “bipartisan” deficit commission that was heavily weighted toward the benefit-cutting crowd.

The “Grand Bargain” Scenario

How could the bad thing happen?

Biden will come under immense pressure to compromise as the government moves closer to default. The media is already trying to box him in on the issue; the headline for that Times article, for example, is “In Debt Limit Talks, Biden and Republicans Start Far Apart.”

Biden has said he won’t negotiate over the debt limit, although he also says he’s willing to discuss future spending. That may seem like a distinction without a difference, but it’s still odd that the Times is calling these meetings "debt limit talks." Is that because it’s what insiders are calling them, or because that’s what they want them to become?

Biden could find himself being pressed on all sides – by Democratic advisors, big donors, and media pundits alike – to compromise on big-ticket mandatory spending programs. House Republicans would love to cut an anti-Social Security, anti-Medicare deal. Despite McCarthy’s demurrals, the GOP remains ideologically opposed to those programs.

How would such a deal work, exactly? The most important task would be to provide political cover for the parties involved. Unfortunately, there’s a precedent for that, too, in the so-called “Grand Bargain” discussions of 2011. President Obama went eyeball-to-eyeball with Republican House Speaker John Boehner over the debt ceiling that year – and blinked. Tea Party Republicans sank their “Grand Bargain,” fortunately, but the result was the Budget Control Act of 2011.

That law mandated nearly a trillion dollars in budget cuts over the following ten years. It also created a congressional “super committee” on deficit reduction comprised of six Republicans and six Democrats. With today’s Republicans even further to the right than 2011’s, and with a profusion of “Blue Dog” Democrats willing to cut these programs, that kind of committee would be a far riskier proposition than it was back then.

Trigger Happy

Lastly, the Budget Control Act created a mechanism called “sequestration” that would trigger across-the-board federal spending cuts if Congress allocated more spending than agreed upon in this measure. Social Security and Medicaid were exempted from these automatic cuts in 2011, but Medicare was not. House Republicans have moved even further to the right, so there’s no guarantee that would be true today.

When it comes to Social Security and Medicare, sequestration could be the perfect solution for politicians who fear blowback (which is to say, all of them). Rather than directly cut popular programs, they could create “automatic” triggers that fire at some unspecified future date while leaving no fingerprints behind. We didn’t do it, they could say; the triggers did.

It would be like that Agatha Christie story where all the suspects committed the murder. If everyone did it, who takes the blame?

Conclusion

Sound paranoid? Maybe, or maybe I’m post-traumatic from covering the 2011 negotiations. But I don’t think so. We’ve seen this kind of play before, and there are plenty of billionaire-funded think tanks that would be happy to work out the policy and public relations details.

That makes this the right time to call out Republicans for threatening to disrupt Social Security while strangling its administrative budget, and to push back on the billionaire-donor demands and big-media narratives that threaten what remains of the social contract.