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President Trump is proposing cuts—in some cases big cuts—to Medicare, Medicaid, Social Security and other parts of the social safety net. It’s part of his 2021 budget that the White House is unveiling today.
The plan, being rolled out in during what is expected to be a tight re-election bid for Trump, calls for $4.4 trillion in overall spending cuts over the next decade. Of that, according to the White House budget office, Medicare would be cut by some $850 billion over 10 years, Medicaid $270 billion and Social Security $30 billion. The proposed cuts would include $130 billion from changes to Medicare prescription-drug pricing, $292 billion from safety-net cuts—such as work requirements for Medicaid and food stamps—and $70 billion from tightening eligibility for federal disability benefits.
The proposals run counter to what the president said over the weekend, when he tweeted that the budget “will not be touching your Social Security or Medicare.” Trump’s budgets, notes the Washington Post, “have routinely sought big Medicaid changes that would cut roughly $800 billion from the program over 10 years.” Indeed, last year, Trump proposed slashing Medicare—a key federal health program for the elderly—by $845 billion over 10 years, from current law. Now, he’s trying again.
In the past, Trump officials have attacked press reports about proposed cuts as inaccurate. Acting budget director Russell Vought said last year, for example, that Medicare spending would continue to rise in absolute terms—but the rate of growth would slow.
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That the White House is proposing entitlement cuts should come as no surprise. “We’ve brought it up with President Trump,” Sen. John Barrasso, Republican of Wyoming, said last summer. And Trump “has talked about it being a second-term project.” And as recently as last month when he attended the World Economic Forum in Davos, Switzerland, the president was asked if he would ever consider cutting entitlements. Trump’s response: “At some point they will be.” Senate Majority Leader Mitch McConnell has also expressed a desire to cut entitlement spending, calling it “the real drivers of the debt.”
For their part, Democrats charge that Trump’s 2017 tax cuts—heavily focused on breaks for corporations and wealthy individuals—have spiked the deficit and debt. These dueling narratives will be a key part of the nasty 2020 campaign.
That debate aside, the numbers do show that spending on the “big three”—Social Security ($1.1 trillion), Medicare ($679 billion) and Medicaid ($418 billon)—will be approximately $2.19 trillion in 2020, nearly three times more than defense spending ($738 billion).
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It’s also true that spending on Social Security, Medicare and Medicaid is soaring, as an estimated 10,000 baby boomers retire each day, a trend that is expected to continue through 2029. The strain on Social Security is evident right now: This year, the program began dipping into reserves to pay beneficiaries; by 2034, that surplus is projected to be gone and after that Social Security—which is based on payroll taxes—will only be able to pay 79% of projected benefits. To make up the difference, payroll taxes will have to go up, or eligibility ages will have to rise—perhaps both. Either way, pain is in the forecast. More workers could also enter the workforce and pay into the system, but U.S. birthrates are declining and the Trump administration is working to lower even legal immigration.
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For now though, this is all academic. Trump’s proposed cuts to the social safety net will surely never get through Nancy Pelosi’s House of Representatives, just as Democratic proposals to raise taxes to expand entitlements would probably never get through Mitch McConnell’s Senate. This means entitlement spending will keep chugging along and growing. We’ll see who’s in control after November.