Biden is glossing over a giant looming problem with both programs, which is that they’re unsustainably expensive and the single-largest financial problem the US government faces.
and could be raised again, as Americans live longer and healthier. It could also be indexed to longevity, so it rises automatically with life expectancy and Congress doesn’t have to make politically difficult decisions. Benefits could be capped or even eliminated for wealthy retirees. A more extreme measure would be reducing benefits for everybody in accordance with the program’s funding.
Medicare is different, since unsubsidized health care can be ruinously expensive and competent care is obviously a life-or-death matter. But changes are still possible. Reform advocates recommend new ways for Medicare toand other costs. Adopting some private-sector practices could make Medicare more efficient.
Biden isn’t talking about any of this. He’s only promising to protect Social Security and Medicare as they are. He’s also not debunking the myth that Americans are only getting back what they put into the two programs, through the payroll taxes everybody pays up to a certain percentage of income. Social Security and Medicare tax revenue does not go into a bank where it’s held until needed by each individual payer. Instead, this money is an outright transfer from current workers to retirees. That’s actually a good deal for retirees, since on average a typical couple gets aboutthan they paid in, adjusted for inflation. On the current trajectory, that “bonus” is due to rise. Anybody advocating for a 1-to-1 payback on money paid in is actually calling for a huge cut in benefits.
Congress will have to grapple with Social Security and Medicare shortfalls eventually. Once the programs run short of money, the government might still be able to stall by borrowing to make up the difference or simply funding the shortfall from general revenue. But sooner or later, the funding gap will grow too large to ignore. Biden may be betting it won’t happen on his watch, and he may be right.
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