Republicans’ Reckless Abandonment of Entitlement Reform

National Review Online

Monday, January 15, 2024

 

As the first votes of the 2024 Republican presidential race are cast tonight in Iowa, one thing is already clear: The party is not serious about tackling the nation’s entitlement crisis.

 

There was a time not too long ago when Republicans correctly believed that overhauling Social Security, Medicare, and Medicaid was a key domestic priority. Yet even as the problems facing the programs have gotten significantly worse, serious changes are further away than ever.

 

In his first run for president, Donald Trump campaigned on not making any meaningful changes to Social Security and Medicare. He followed through on that promise as president and trained a new wave of more populist Republican politicians on the idea that Republicans should abandon calls for the sort of sweeping Paul Ryan–style entitlement reforms that the party had supported during the Tea Party era. When the slim House majority retook power last year, they promised big fights on spending while vowing not to touch the major entitlement programs that are the primary driver of the national debt.

 

In the current campaign, Trump has not only reiterated that he doesn’t want to make changes to Social Security and Medicare, but he has attacked his leading rivals, Ron DeSantis and Nikki Haley, for wanting to cut the programs.

 

While DeSantis did embrace the Ryan plan and other reforms as a candidate for and member of the House, in his presidential campaign he has declared he wouldn’t touch the programs.

 

In a debate with Haley last week, DeSantis even adopted left-wing talking points in defending his current position of not wanting to “mess with Social Security.” He attacked Haley for calling the program an “entitlement” and said, “You’re paying into it. It’s not a welfare program, you’re being taxed for this your whole life.”

 

In reality, the way the Social Security system works is that young workers are paying the benefits of current retirees, making it a generational wealth transfer. While it’s true that retirees paid taxes during their working years, most retirees will receive benefits that exceed the value of those taxes.

 

DeSantis also argued against raising the retirement age of Social Security, saying, “I don’t see how you can raise the retirement age when our life expectancy is collapsing in this country.” While it’s true that life expectancy decreased in 2020 and 2021 by 2.4 years, that was primarily the result of Covid deaths — the consequences of a once-in-a-century pandemic. Initial estimates for 2022 are that expectancy rose 1.1 years. There is no reason that Covid should be used as an excuse to oppose much-needed, long-term reforms.

 

To her credit, Haley is the one remaining candidate who has been consistent in arguing that the Social Security and Medicare programs are facing a crisis that needs to be addressed, warning that “we can’t put our head in the sand” by ignoring the problem.

 

The exact reforms she is proposing, however, would need fleshing out. In the debate, she said she would raise the retirement age, but only for those currently in their 20s — and she wouldn’t directly answer whether she would put the age at 70. Delaying the retirements of those who won’t be collecting benefits until 40 years from now won’t do much to move the needle. She also floated using a different measure of inflation to determine benefits and said she would limit benefits on higher-income individuals.

 

Even if Haley were to somehow pull off an upset in the primary and become president, it’s hard to see her having many takers among fellow Republicans, who would have to be united to overcome total resistance from Democrats to any changes.

 

The crisis facing these programs is not as distant as many people think. This year, the big three programs (Medicare, Medicaid, and Social Security) alone are slated to cost $3 trillion, absorbing 62 percent of expected tax revenue, according to the Congressional Budget Office. By the end of its ten-year projection period, that is supposed to balloon to $5.3 trillion, or three-quarters of tax revenue. Add in interest, and by 2033, about 95 percent of tax revenue will be eaten up before a penny is spent on defense, border security, or any other domestic priority. And this is with the CBO assuming that the Trump tax cuts are allowed to expire, which no Republican candidate wants to see happen. In other words, nearly all other spending will need to be financed by adding more debt, which will by that time be approaching 120 percent of annual economic output.

 

As dire as the situation is, help is not on the way. All indications are that Americans are going to be faced this November with a choice between Republicans who won’t do anything to reform existing entitlements and Democrats who want to create new ones.