“the 2025 trustees reports for Social Security and Medicare are out. Once again, they confirm what we’ve known for decades: Both programs are barreling straight toward insolvency. The Social Security retirement trust fund and Medicare Hospital Insurance trust fund are each on pace to run dry by 2033.
When that happens, seniors will face an automatic 23 percent cut in their Social Security benefits. Medicare will reduce payments to hospitals by 11 percent. These cuts are not theoretical. They’re baked into the law. If nothing changes, they will be made.
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legislators could raise the payroll tax from 12.4 percent to 16.05 percent. That’s a 29.4 percent increase. Or they could restructure Social Security so that only people who need the money would receive payments. But because facing this problem in an honest way is politically toxic, legislators are ignoring it.
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Policymakers could gradually raise the retirement age to reflect modern, healthier, longer lives. They could cap benefits at $2,050 monthly, preserving income for the bottom 50 percent of beneficiaries while progressively reducing benefits for the top half. They could reform the tax treatment of retirement income to encourage private savings, as Canada has done with its tax-free savings accounts. Any combination of these reforms would help.
But that would require admitting that the current path is unsustainable. It would require telling voters the truth. It would require courage. So far, these admirable traits have been sorely lacking in our politicians.
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Waiting until the trust funds are empty will leave no room for gradual, targeted solutions. It will force crisis-mode slashing that will hurt the most vulnerable.”
“Republicans once talked seriously about aligning taxes and spending. They cared about economic distortion, simplicity, and broadening the tax base. Now, too many just want the sugar rush of tax cuts without fiscal discipline. Meanwhile, Democrats want to vastly expand the state and pretend that billionaires alone can foot the bill. Both sides are wrong. The math doesn’t work, and the morality of the reckless spending is worse.
Those who want to frame this bill as pro-growth are dreaming. They’re relying on unrealistic economic assumptions about a short-run bump to justify the consequences of long-term debt increases—and banking on cost-disguising budget gimmicks that nobody takes seriously.”
Although both parties have been fiscally irresponsible, the Republicans have been more irresponsible, despite talking about it more. The Democrats tend to offset some of their spending with taxes. Republicans just take on debt to pay for wars and tax cuts that mostly benefit the wealthy.
“The administration is using a process known as “rescission” to pursue the cuts, which allows the White House to ask Congress to claw back money it has already approved. The process has not been successfully used in over two decades, and the Senate rejected a rescission request in 2018, during Trump’s first term.
Lawmakers must approve the cuts within 45 days of the request — July 18 — or Trump is required by law to spend the money. The administration has said that this could be the first of several rescission requests.”