- planning to cut Social Security and Medicare benefits
- holding sacrosanct the government’s payments to bondholders?
What, exactly, is the big difference? For Social Security and Medicare, people have paid money into the system, with the expectation that they would receive an agreed-upon return (benefits) at a later date. Just the same way that bondholders have loaned money, with the expectation that they would receive an agreed-upon return (principal plus interest) at a later date.
Would bondholders be happy if House Budget Committee Chairman Paul Ryan suggested trimming bond repayments between 15% and 45%? So why should people who have paid into Social Security accept those kinds of cuts?
Let’s see… if Ryan reduced federal bond payments by 15%, wouldn’t that free up about $54 billion a year? Wait… wouldn’t that more than cover the $40 billion of cuts to the Supplemental Nutritional Assistance Program that Republicans want to make?
Pediatricians at the Boston Medical Center have studied the interaction between hunger and health, and yesterday announced that SNAP was “one of America’s most cost-effective and successful public health programs in the country” and by improving children’s health, SNAP actually “saves society money.” Except that Republicans want to cut children’s health insurance, too. At this point, you halfway expect House leadership to start quoting Jonathan Swift. But I digress.
Or if Ryan reduced bond payments by 45%, wouldn’t that free up about $162 billion a year? Which would more than cover the revenue cost of not returning to Clinton-era tax rates.
But the GOP isn’t suggesting that bondholders should absorb those sorts of cuts…oh, no, that would be unthinkable. So why would they think that Social Security recipients are fair game?
You pay your money in, you expect to get it back as promised.
Here’s what I think will happen, during the next few weeks of government shutdown/debt-limit crisis. I think the Republicans will stop using Obamacare as their line in the sand/can’t compromise issue. I think they will switch to insisting on some sort of “Entitlement Reform” in exchange for not driving our economy totally off the cliff. And “Entitlement Reform” is Tea Party lingo for making cuts to Social Security, Medicare and Medicaid.
At one level, I guess it’s fair to lump Social Security and Medicare into the category of “entitlements” – you pay your money in, you’re entitled to get it back as promised.
Just like the US Treasury’s bondholders are entitled to get their money back as promised.
I’m wondering how the GOP is going to explain the difference between those promises, over the next few weeks. Can’t imagine what rhetoric they will come up with, to justify holding bondholders harmless while trying to cut Social Security benefits.