On Feb. 7, President Joe Biden engaged in a baseless fear-mongering campaign, accusing U.S. House Speaker Kevin McCarthy (R-Calif.) and the new House Republican majority of attempting to withhold approval of increasing the $31.4 trillion national debt ceiling unless steep cuts are made to Social Security and Medicare. Before the nation, Biden stated, “Some of […]
Get Instant Access to This Article
Become a Central New York Business Journal subscriber and get immediate access to all of our subscriber-only content and much more.
- Critical Central New York business news and analysis updated daily.
- Immediate access to all subscriber-only content on our website.
- Get a year's worth of the Print Edition of The Central New York Business Journal.
- Special Feature Publications such as the Book of Lists and Revitalize Greater Binghamton, Mohawk Valley, and Syracuse Magazines
Click here to purchase a paywall bypass link for this article.
On Feb. 7, President Joe Biden engaged in a baseless fear-mongering campaign, accusing U.S. House Speaker Kevin McCarthy (R-Calif.) and the new House Republican majority of attempting to withhold approval of increasing the $31.4 trillion national debt ceiling unless steep cuts are made to Social Security and Medicare.
Before the nation, Biden stated, “Some of my Republican friends want to take the economy hostage unless I agree to their economic plans. All of you at home should know what their plans are. Instead of making the wealthy pay their fair share, some Republicans want Medicare and Social Security to sunset every five years. That means if Congress doesn’t vote to keep them, those programs will go away. Other Republicans say if we don’t cut Social Security and Medicare, they’ll let America default on its debt for the first time in our history.”
There’s just one problem. McCarthy and Republicans haven’t proposed cutting Social Security or Medicare at all. That is so-called mandatory spending under longstanding federal law.
In fact, to date, the only proposals put forward have included freezing discretionary spending at 2022 levels, similar to budget sequestration that occurred in 2011, a deal by former House Speaker John Boehner (R–Ohio) and former President Barack Obama that limited the growth of defense and non-defense discretionary spending, saving hundreds of billions of dollars.
As a result, the budget deficit was brought from $1.3 trillion in 2011 all the way down to $441 billion in 2015, the year Republicans won back the U.S. Senate. From there, the practice was terminated, and the budget deficit again ballooned, reaching $983 billion by 2019.
In January, McCarthy told Fox Business, “If we go back to ‘22 levels, that was what we were spending just two or three weeks ago… Does defense getting more than $800 billion, are there areas that I think they could be more efficient in? Yeah. Eliminate all the money spent on ‘wokeism.’ Eliminate all the money that they’re trying to find different fuels and they’re worried about the environment to go through.”
Again, that is discretionary spending, the portion that Congress controls for example in the $1.7 trillion omnibus spending bill that just passed. That includes department and agency budgets and the salaries of federal employees, the military and contractor budgets and so forth.
None of that impacts Social Security and Medicare. Entitlements like Social Security, Medicare, and Medicaid are handled in the mandatory side of the ledger, which totals an estimated $4.1 trillion, according to the Office of Management and Budget (OMB). To cut spending would require specific changes to federal law that simply have not been proposed by Republican leaders.
McCarthy added, “Why would we sit back and be so arrogant to say no, there’s no waste in government? … Why wouldn’t we look at all the money that poured out during COVID? What money of that has not been spent? Why wouldn’t you pull that back yet?”
The House Speaker is right. All told, more than $6 trillion was printed, borrowed, and spent into existence to offset the global economic lockdowns that temporarily disabled labor markets’ functionality as citizens were told to remain in their households.
As a result, in 2020, we saw a record $3.1 trillion deficit, according to data compiled by the White House Office of Management and Budget. The deficit was $2.7 trillion in 2021 and $1.4 trillion in 2022. The result was massive inflation which was exacerbated by Russia’s invasion of Ukraine that further harmed global supply-chain issues already beleaguered by the production halt from COVID.
Now, the U.S. economy is back to peak employment with a low unemployment rate of just 3.4 percent. It’s time to cut spending before the next upheaval in labor markets strikes. As it is, House Republicans should present their plan to rein out-of-control spending in Washington, D.C. in the form of legislation that will increase the debt ceiling. When everyone looks at it, they’ll see it has nothing to do with either Social Security or Medicare. President Biden needs to stop lying.
Robert Romano is the VP of public policy at Americans for Limited Government (ALG). The organization says it is a “non-partisan, nationwide network committed to advancing free-market reforms, private property rights, and core American liberties.”
