Post by the Scribe on Oct 13, 2022 8:22:03 GMT
Republicans Plan to Use Debt Limit Leverage to Reduce Social Security, Medicare: Report
www.yahoo.com/finance/news/republicans-plan-debt-limit-leverage-222818100.html
Michael Rainey
Wed, October 12, 2022 at 3:28 PM![]()
Republicans in the House are planning to use a potential showdown next year over raising the federal debt limit to make changes in Social Security and Medicare, Bloomberg’s Jack Fitzpatrick reports.
about.bgov.com/news/entitlement-spending-cap-plans-linked-by-gop-to-debt-limit-deal/
The developing plan hinges on Republicans winning control of the House in the midterm elections, an outcome that is looking likely. Four GOP lawmakers who are vying for leadership of the House Budget Committee in the event of a Republican victory told Fitzpatrick that the need to raise the debt ceiling could give them the leverage they need to force Democrats to make concessions.
“The debt limit is clearly one of those tools that Republicans — that a Republican-controlled Congress — will use to make sure that we do everything we can to make this economy strong,” Rep. Jason Smith (R-MO), the senior Republican on the current Budget Committee, said.
Republicans are still discussing exactly what changes they might try to enact. “What would we consider a win?” said Rep. Lloyd Smucker (R-PA), who is interested in the top spot on the Budget Committee. “What would we consider to be a fiscally responsible budget?”
Although the details are still up in the air, one theme is clear: House Republicans want to reduce federal spending, and the major entitlement programs are a target. Rep. Buddy Carter (R-GA) Carter said that Republicans’ “main focus has got to be on nondiscretionary — it’s got to be on entitlements.”
Shrinking the safety net: One option reportedly being discussed is raising the eligibility age for Social Security and Medicare, the two largest mandatory spending programs. Each faces financial squeezes in the coming years as the baby boomers age and continue to retire. Under current rules, the Social Security system would be forced to cut benefits starting in 2034, while Medicare could run short of funds by 2028.
Earlier this year, the Republican Study Committee released a plan to raise the eligibility age for Social Security to 70 and the eligibility age for Medicare to 67. The increases would be phased in over time and once the target is reached, the eligibility age would then be indexed to life expectancy. The lawmakers also called for increased means testing in the Medicare program, and a privatization option for Social Security.
Other options being considered include more stringent work requirements and income limits for what Smith called “welfare programs,” including the Supplemental Nutrition Assistance Program more commonly known as food stamps. And new caps on discretionary spending could limit spending increases over 10 years.
One thing that won’t be cut: defense spending. Rep. Jodey Arrington (R-TX) told Bloomberg that he wants to cut nondefense spending in order to provide more money for the military.
Willing to risk “catastrophe”? Republicans say they are leery about pushing too far in their demands, but many experts think that any effort to use the debt limit as leverage in negotiations is unacceptably risky. Treasury Secretary Janet Yellen has warned that defaulting on U.S. debt payments — which would occur if the U.S. failed to raise the debt ceiling — would cause a “catastrophe” in the global economy.
Speaker Nancy Pelosi (D-CA) accused the GOP of taking huge risks in order to cut important social programs. “House Republicans are openly threatening to cause an economic catastrophe in order to realize their obsession with slashing Medicare and Social Security,” a Pelosi spokesperson told Bloomberg. “As House Republican leaders’ own words constantly reveal, dismantling the pillars of American seniors’ financial security is not a fringe view in the extreme MAGA House GOP, it is a broadly held obsession at the core of their legislative agenda.”
House Budget Committee Chair John Yarmuth (D-KY) also criticized Republican plans. “Holding the full faith and credit of the United States hostage to implement an extreme and unpopular agenda is not governing, it’s desperation,” Yarmuth said in a statement. “Congressional Republicans are so hellbent on gutting Social Security and ending Medicare as we know it that they are willing to risk economic catastrophe to get it done. This is a desperate attempt to shower the wealthy and big corporations with even more tax giveaways by intentionally sacrificing the needs of American families.”
Democrats do have one option for disarming Republicans ahead of a debt ceiling showdown: They could attempt to raise the ceiling on their own during the lame-duck session at the end of the year, potentially denying the GOP the use of that weapon. But both Yarmuth and Sen. Tim Kaine (D-VA) told Bloomberg there has been no discussion among Democrats about such a plan.
The bottom line: Taking a page from the tea party playbook from a decade ago, expect to see Republicans attempting to force spending reductions in the next Congress — reductions that could involve fundamental changes in the way the country’s top safety net programs operate.
www.yahoo.com/finance/news/republicans-plan-debt-limit-leverage-222818100.html
Michael Rainey
Wed, October 12, 2022 at 3:28 PM
Republicans in the House are planning to use a potential showdown next year over raising the federal debt limit to make changes in Social Security and Medicare, Bloomberg’s Jack Fitzpatrick reports.
about.bgov.com/news/entitlement-spending-cap-plans-linked-by-gop-to-debt-limit-deal/
The developing plan hinges on Republicans winning control of the House in the midterm elections, an outcome that is looking likely. Four GOP lawmakers who are vying for leadership of the House Budget Committee in the event of a Republican victory told Fitzpatrick that the need to raise the debt ceiling could give them the leverage they need to force Democrats to make concessions.
“The debt limit is clearly one of those tools that Republicans — that a Republican-controlled Congress — will use to make sure that we do everything we can to make this economy strong,” Rep. Jason Smith (R-MO), the senior Republican on the current Budget Committee, said.
Republicans are still discussing exactly what changes they might try to enact. “What would we consider a win?” said Rep. Lloyd Smucker (R-PA), who is interested in the top spot on the Budget Committee. “What would we consider to be a fiscally responsible budget?”
Although the details are still up in the air, one theme is clear: House Republicans want to reduce federal spending, and the major entitlement programs are a target. Rep. Buddy Carter (R-GA) Carter said that Republicans’ “main focus has got to be on nondiscretionary — it’s got to be on entitlements.”
Shrinking the safety net: One option reportedly being discussed is raising the eligibility age for Social Security and Medicare, the two largest mandatory spending programs. Each faces financial squeezes in the coming years as the baby boomers age and continue to retire. Under current rules, the Social Security system would be forced to cut benefits starting in 2034, while Medicare could run short of funds by 2028.
Earlier this year, the Republican Study Committee released a plan to raise the eligibility age for Social Security to 70 and the eligibility age for Medicare to 67. The increases would be phased in over time and once the target is reached, the eligibility age would then be indexed to life expectancy. The lawmakers also called for increased means testing in the Medicare program, and a privatization option for Social Security.
Other options being considered include more stringent work requirements and income limits for what Smith called “welfare programs,” including the Supplemental Nutrition Assistance Program more commonly known as food stamps. And new caps on discretionary spending could limit spending increases over 10 years.
One thing that won’t be cut: defense spending. Rep. Jodey Arrington (R-TX) told Bloomberg that he wants to cut nondefense spending in order to provide more money for the military.
Willing to risk “catastrophe”? Republicans say they are leery about pushing too far in their demands, but many experts think that any effort to use the debt limit as leverage in negotiations is unacceptably risky. Treasury Secretary Janet Yellen has warned that defaulting on U.S. debt payments — which would occur if the U.S. failed to raise the debt ceiling — would cause a “catastrophe” in the global economy.
Speaker Nancy Pelosi (D-CA) accused the GOP of taking huge risks in order to cut important social programs. “House Republicans are openly threatening to cause an economic catastrophe in order to realize their obsession with slashing Medicare and Social Security,” a Pelosi spokesperson told Bloomberg. “As House Republican leaders’ own words constantly reveal, dismantling the pillars of American seniors’ financial security is not a fringe view in the extreme MAGA House GOP, it is a broadly held obsession at the core of their legislative agenda.”
House Budget Committee Chair John Yarmuth (D-KY) also criticized Republican plans. “Holding the full faith and credit of the United States hostage to implement an extreme and unpopular agenda is not governing, it’s desperation,” Yarmuth said in a statement. “Congressional Republicans are so hellbent on gutting Social Security and ending Medicare as we know it that they are willing to risk economic catastrophe to get it done. This is a desperate attempt to shower the wealthy and big corporations with even more tax giveaways by intentionally sacrificing the needs of American families.”
Democrats do have one option for disarming Republicans ahead of a debt ceiling showdown: They could attempt to raise the ceiling on their own during the lame-duck session at the end of the year, potentially denying the GOP the use of that weapon. But both Yarmuth and Sen. Tim Kaine (D-VA) told Bloomberg there has been no discussion among Democrats about such a plan.
The bottom line: Taking a page from the tea party playbook from a decade ago, expect to see Republicans attempting to force spending reductions in the next Congress — reductions that could involve fundamental changes in the way the country’s top safety net programs operate.