The largest faction of House GOP lawmakers is pushing Speaker Kevin McCarthy to use the upcoming government spending fight to shore up Social Security and Medicare.
Social Security and Medicare are on track to go bust within the next decade, meaning people who are now 55 will get hit with significant benefit cuts unless Congress acts. The Republican Study Committee, which is made up of more than 150 House Republicans, believes the time to act is now.
“The Biden administration is not doing anything to fix those problems,” said RSC Chairman Kevin Hern, Oklahoma Republican. “Instead, they want to force every American into government dependency and raise taxes sky-high to pay for it.”
The RSC devised a blueprint to guide House Republicans in the upcoming battle over government battle. The blueprint, which was previewed exclusively to The Washington Times, proposes structural changes to Social Security and Medicare.
Under the blueprint, Medicare would be transformed to include a subsidized, privatized option. A range of changes such as means-testing Social Security are offered to begin bipartisan talks for the popular retirement benefits.
GOP lawmakers say the upcoming government spending fight is the perfect moment to fix Social Security and Medicare.
“America is over $31.9 trillion in debt, retirement programs are careening toward bankruptcy, and our economy is teetering on the edge of a fiscal cliff,” said Rep. Ben Cline, a Virginia Republican who leads the RSC budget task force.
Earlier this year, Mr. McCarthy passed on an opportunity to address the programs in bipartisan negotiations to hike the federal debt limit. The move came after Mr. Biden spent months accusing House Republicans of wanting to cut Medicare and Social Security.
Medicare’s board of trustees estimates its hospital insurance trust fund, which covers inpatient hospital stays for individuals 65 and older, is slated to run out of money by 2028. The trust fund is financed by a 1.45% payroll tax that is levied equally on both employers and employees.
Once the trust fund runs dry, Medicare will face a 10% budget shortfall starting in 2029, when patients are likely to see a cut in services for hospital stays and hospice care. The trust fund does not cover other parts of Medicare such as subsidies for prescription drugs and physician visits, which are funded by patient premiums and state governments.
The RSC proposes to consolidate the various portions of Medicare coverage, including prescription drugs, hospital stays and doctor’s visits, into one plan. Seniors would then be given a monthly subsidy, based on income, to purchase either private health insurance or the single Medicare plan.
Lawmakers say the shift would incentive private health insurers to slash rates to compete with Medicare to sign up the most seniors.
“We’re offering a path forward to save the critical programs on which millions of seniors depend,” Mr. Cline said.
The proposal would also target duplicative subsidies and costs and institute a universal payments policy for medical services. Currently, Medicare pays hospitals a higher rate for services than it does doctor’s offices.
A study released by the Blue Cross Blue Shield Association in March found a neutral payment policy would save the federal government $471 billion over the next decade.
The RSC is also proposing changes to Social Security. The program’s retirement and survivor benefits are on course to run out of money by 2033. The program faces a shortfall as the U.S. population ages and birth rates remain low. If Congress does nothing, only 78% of Social Security benefits will be payable by 2034.
At that time, the Committee for a Responsible Federal Budget estimates that Social Security benefits will automatically be slashed by 20% — resulting in a $12,000 to $17,000 benefit cut for a retired couple.
The RSC is urging Mr. Biden to begin bipartisan negotiations on saving Social Security. Given the controversial nature of entitlement reform, the group says that any change to Social Security needs buy-in from parties.
“Congress and the President will have to work in a bipartisan fashion to consider options that create savings for Social Security,” the blueprint said.
Although it does not detail exact policies to shore up Social Security, the RSC blueprint says that means-testing should be an option to ensure the wealthy are not benefiting from the program more than the truly needy. The group also says “modest adjustments” to the retirement age should be looked at as life expectancy has increased.
• Haris Alic can be reached at halic@washingtontimes.com.
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