“If nothing changes, Social Security benefits will be subject to a 23 percent cut in a decade.”
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“Since any changes to shore up Social Security’s bottom line will likely require huge tax increases or changes to how benefits are paid, policy makers are also running out of time to implement those changes in ways that don’t cause major disruptions to the economy and Americans’ retirement plans.”
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“The most straightforward solution to Social Security’s problem is to raise the payroll taxes that fund the program to make up for the shortfall on the benefit side of the ledger. But that would only exacerbate the problem by placing a bigger burden on younger, generally poorer workers.
According to the report, Social Security could be kept afloat for the next 75 years by hiking the payroll tax by 4.15 percentage points in 2034 (or implementing a smaller increase sooner). The payroll tax is currently charged at a 16.5 percent rate, with employers and employees each covering half. That works out to a nearly 25 percent tax hike. Alternatively, the report says, benefits could be cut by about 25 percent.”
LC: We could also fund it by higher taxes on the wealthy.
“To pretend that Social Security and Medicare shouldn’t be touched is nothing short of political malpractice. Over the next 30 years, the two programs will run a $116 trillion shortfall. This number accounts for the significant amount of interest payments on the debt the government will ring up in the process. While we might be able to stumble along indefinitely, all that borrowing will slow—perhaps even halt—our economic growth, making funding the programs that much more difficult.”
“In one scenario outlined by the CBO, Congress would have to cut 86 percent of all discretionary spending if it wanted to balance the budget by 2033 without touching the military, veterans programs, or entitlements like Social Security and Medicare. In a slightly altered version of that same scenario in which the Trump tax cuts were not allowed to expire as intended in 2025, Congress would have to cut 100 percent of discretionary spending—and the country would still face a $20 billion deficit.”
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“it should be clear that any attempt at bringing the federal budget deficit under control must kill (or at least wound) the Republicans’ sacred cows of military spending, entitlements, and the recent Trump tax cuts. Right now, however, leading Republicans including former President Donald Trump and Speaker of the House Kevin McCarthy (R–Calif.) have vowed to keep Social Security out of any long-term spending deals. Rep. Jim Banks (R–Ind.) has promised to oppose any bill that cuts defense spending.
As for the tax cuts, they’re technically temporary—a gimmick that allowed Republicans to game the CBO’s scoring of the tax cut bill—but keeping the lower individual income tax rates in place past 2025 is a top priority for Republicans.”
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“the CBO’s numbers aren’t partisan and neither is the blame for America’s massive budget deficits. These latest projections only reveal how difficult the choices ahead will be. If Republicans are serious about trying to balance the budget, there can be no more sacred cows.”
“”More money can help schools succeed, but not if they fritter those extra resources in unproductive ways,” Jay Greene, a senior research fellow at the Heritage Foundation, told Reason. “There is no one formula for how to spend money correctly in schools. But there are many common ways that schools blow resources. Wasteful schools tend to hire more non-instructional staff while raising the pay and benefit costs for all staff regardless of their contribution to student outcomes. If you fully disconnect compensation from performance, you can raise salaries and benefits endlessly without anyone learning more.”
While making good spending choices can help close some of the gap between affluent and non-affluent schools, it’s worth noting that student poverty has a large effect on school performance.”
“DeSantis. In his 2023–24 budget, announced on Wednesday, the governor requested $12 million to continue his “initiative to protect Floridians against the harms resulting from illegal immigration by facilitating the transport of unauthorized aliens.” The $12 million would be used “to cover all costs associated with facilitating the transport of inspected unauthorized aliens, including, but not limited to the costs of litigation.”
The request mirrors a provision in the 2022–23 budget that funded “a program to facilitate the transport of unauthorized aliens from this state consistent with federal law” (emphasis added). This time, DeSantis wants to transport migrants “from any point of origin in the U.S. to any jurisdiction.” Spending taxpayer money to protect Floridians, in other words, need not involve anything actually taking place in Florida.”
“In addition to Republicans’ pledge to slice $130 billion from the $1.7 trillion government funding package that passed in December, conservatives want to take the process old-school. Rather than passing one massive bill, they’re calling for individual votes on the dozen appropriations bills that set annual budgets for different agencies, a more time-consuming but transparent procedure that recent Congresses have struggled to complete.
They’re also planning to allow an amendment free-for-all, which is all but certain to further drag out or trip things up.
Additionally, House Republicans say they’ll refuse to negotiate with the Senate until the upper chamber passes its own spending bills, which hasn’t happened in years. Typically, Senate appropriators have instead entered into bipartisan talks with their House counterparts, only burning valuable floor time on a package they’re certain would pass both chambers.
And GOP demands expand beyond funding the government. Republicans say they won’t back a debt limit increase unless they get their way on spending cuts or measures to reign in the ever-increasing $31 trillion debt. The timing of that could be tricky, however, as the Treasury Department could hit its credit card limit this summer, while federal cash expires on Sept. 30.
A debt ceiling hike will arguably make for a much bigger battle in Congress, leaving even less time and patience for bipartisan talks on funding the government.”
“According to the Manhattan Institute’s Brian Riedl, the GOP plan so far is to cut $130 billion from discretionary appropriations. Unfortunately, the defense budget and veterans health funds are excluded from cuts, despite making up $993 billion out of $1,602 billion discretionary budget. As Riedl notes, their plan will require “freezing those two items and cutting everything else by 21% immediately.”
This maneuver guarantees political failure for the Republicans’ plan.”
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“imposing cuts on only a small share of the discretionary budget excludes trillions of dollars from scrutiny and is a political nonstarter.”
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“while limiting discretionary spending is a good start, fiscal sustainability requires that Congress also cut the mandatory side of the budget. Indeed, Social Security, Medicare, and Medicaid—not defense or education—are still the chief drivers of our future debt, just as they have been in the past. Along with the interest the Treasury must pay on the debt, these three programs will be responsible for 86 percent of federal spending between 2008 and 2032, says Riedl. In other words, no level of discretionary spending cuts will ever be enough to control the upcoming debt explosion.”
“the CBO published its report on budget options. The two-volume document highlights options for deficit reduction. One volume details large possible spending reductions while the other lays out small ones—so the options are plenty. They include important reforms of some of the major drivers of future debt: Medicare, Medicaid, and Social Security.
All told, it’s possible to achieve deficit reduction of $7.7 trillion over 10 years. That’s enough to accomplish what some people mistakenly believe to be out of reach: balancing the budget without raising taxes. There are also a few options to simplify the tax code by removing or reducing unfair individual tax deductions and by cutting corporate welfare.
For instance, it’s high time for Congress to end tax deductions for employer-paid health insurance. This tax deduction is one of the biggest of what we wrongly call “tax expenditures.” It’s responsible for many of the gargantuan distortions in the health care market and the resulting enormous rise in health care costs. The CBO report doesn’t eliminate this deduction; instead, it limits the income and payroll tax exclusion to the 50th percentile of premiums (i.e. annual contributions exceeding $8,900 for individual coverage and $21,600 a year for family coverage). The savings from this reform alone would reduce the deficit by roughly $900 billion.
A second good option is to cap the federal contribution to state-administered Medicaid programs. That federal block grant encourages states to expand the program’s benefits and eligibility standards—unreasonably in some cases—since they don’t have to shoulder the full bill. CBO estimates that this reform would save $871 billion.
CBO also projects that Uncle Sam could reduce the budget deficit by $121 billion by raising the federal retirement age. CBO’s option would up this age “from 67 by two months per birth year for workers born between 1962 and 1978. As a result, for all workers born in 1978 or later, the FRA would be 70.” Considering that seniors today live much longer than in the past and can work for many more years, this reform is a low-hanging fruit.
Congress could save another $184 billion by reducing Social Security benefits for high-income earners. I support a move away from an age-based program altogether since seniors are overrepresented in the top income quintile. Social Security should be transformed into a need-based program (akin to welfare). Nevertheless, the CBO’s option would be a step in the right direction.”