December 13, 2013
There is a bizarre cult in the Washington elite that insists that Social Security, Medicare, and Medicaid must be cut for our own good. Unfortunately, the NYT seems to be part of this cult.
In its piece on the House of Representatives vote to approve the budget compromise worked out this week, it told readers:
“Some conservatives feel betrayed, as they often have since the Republicans took control of the House in 2011. Representative Jim Jordan, Republican of Ohio, said the House Republican conference agreed in the spring that spending levels exacted by the sequestration cuts would not change unless Congress and the White House could strike an accord to control the long-term causes of the rising costs of the federal debt, Medicare, Medicaid and Social Security.”
It would have been useful to point out that Mr. Jones is wrong. The projected cost of Medicare and Medicaid has fallen sharply over the last five years due to slower projected growth in health care costs. The Congressional Budget Office (CBO) has already lowered projected spending on Medicare and Medicaid for 2020 by 15 percent, which is more than 1 percent of GDP (@ $170 billion in today’s economy). If CBO were to adjust its budget projections fully in accord with the slowdown in spending over the last five years the reduction in projected spending would be even larger.
The slowdown in health care costs has led to sharper reductions in spending that almost any politician likely would have advocated. This means that when someone like Mr. Jones complains about the cost of these programs they are either uninformed about current budget projections or they want to make cuts in these programs apart from any concern about the budget.
It is also worth pointing out that Social Security cannot be a driver of the deficit. Under the law, the program can only spend money from its designated trust fund. If this fund is exhausted then benefits would have to be adjusted downward to correspond to Social Security tax revenue. There is no way that Social Security can contribute to the long-term deficit unless Congress votes to change the law as it now stands.
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