Kevin McCarthy says Republicans will “protect” Social Security. What does that mean?

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WASHINGTON — Some Republicans have said that once they controlled the House of Representatives, they would try to balance the federal budget, in part by cutting Medicare and Social Security.

But at the first press conference in his new role, House Speaker Kevin McCarthy (R-Calif.) was unable to provide details about their plans for the popular retirement programs this week.

“One thing I’ll tell you, as Republicans, we will always protect Medicare and Social Security,” McCarthy said in response to a question from The Bharat Express News on Thursday. “We will protect them for the next generation in the future. But we are going to scrutinize every dollar spent.”

Everyone in Washington wants to “protect” or “enhance” Medicare and Social Security; it is a completely anonymous statement that a member of a party could make at any time without thinking.

McCarthy’s response suggests the Republicans don’t have a plan yet and his biggest challenge will be getting his troublesome caucus — which only elected him leader on the 15th ballot — to agree on a unified list of demands.

The perceived threat to the programs is the future date when their trust funds run out, likely resulting in automatic reductions in benefits because the incoming revenue will be less than what the government expects to spend on benefits. Democrats generally prefer to close the gap by raising taxes, while Republicans prefer to cut benefits. However, neither side has shown much urgency as Medicare can continue to pay the full benefit until 2028 and Social Security until 2035.

But Republicans have declared they want to use their new majority in the House to provoke a huge fight over the entire federal budget this year. And they already have a hostage: the government’s ability to borrow money and pay its bills.

Sometime this year, Congress will have to raise the “debt ceiling” — the legal limit on how much the Treasury Department can borrow to pay for expenses Congress has already approved, including on things like Social Security.

A possible consequence of breaching the debt ceiling? Social Security recipients may miss monthly checks.

Yellen said the Treasury was free until at least “early June,” but the drop-dead date may not be reached until late summer. That’s because the Treasury will receive a deluge of tax revenue in the coming months during income tax filing season, and it will have a jar of accounting maneuvers it can use — “extraordinary measures” — once it hits the cap. They will give it several hundred billion more dollars in borrowing space.

Lou Crandall, the chief economist of research organization Wrightson ICAP and an observer of the Treasury debt market, recently estimated that the default date would be sometime in August.

Nancy Vanden Houten, an American economist with the Oxford Economics research group, expects the drop-dead date to fall sometime in the third quarter of the year, from July to September. She also noted that this window means it could easily get caught up in a likely battle to keep the government open. Without new credits or at least a temporary emergency law by October, the government would be forced to close all essential functions.

“Given our current projections, it is likely that the need to raise the debt limit will become entwined with the need to pass annual spending bills to avoid a government shutdown on Oct. 1,” Vanden Houten said in a research note. .

McCarthy reiterated Thursday that Republicans would use the debt ceiling to negotiate unspecified cuts, likening his plan to good parenting.

“If you have a kid, and you give them a credit card, and they spend the limit, so you raise the limit over and over again — when does it end?” he said. “We need to change the way we wastefully spend money in this country.”

(The credit card analogy is common, but weird. Congress both authorizes spending and sets the limit, and lawmakers do so with full knowledge that already authorized spending will eventually exceed it. The limit is arbitrary and not based on an estimate of pay the wealth of the nation.)

So what will the Republicans ask for? While they haven’t banded together around an actual question, their stance on Medicare and Social Security isn’t a total mystery. The Republican Study Committee, a policy-oriented group of members of the House of Representatives that develops legislative ideas, last year suggested raising the retirement age for both Medicare and Social Security, lowering monthly payments for higher incomes, and turning Medicare into a “public option” type program that competes in a marketplace with private insurance plans.

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Rep. Jodey Arrington (R-Texas), the new chairman of the House Budget Committee — a potential starting point for Republican spending demands — has said he advocates raising eligibility ages for both programs. He told The Bharat Express News he hopes to work with Democrats to strike the kind of bipartisan big bargains that were more common in the 1980s and 1990s.

Arrington acknowledged that Social Security cuts may not be popular, but that’s where Republicans think the conversation should go.

“There are a lot of tough decisions we all have to make across the board,” Arrington said. “The rubber will hit the road with the real curve-bending decisions on spending and reform programs.”

It is possible that Republicans are only aiming for softer targets, such as funding for federal agencies. Rep. Chip Roy (R-Texas), one of the far-right Freedom Caucus members who refused to support McCarthy as speaker unless he promised to go hard on the Democrats, said Republican strategist and radio host Hugh Hewitt this week that there could be a “long talk” about Social Security and Medicare after Republicans “cut up and burn” some federal bureaucrats with cuts to non-defense discretionary spending.

Even if Republicans shy away from touching retirement benefits, the deadlock over the debt ceiling will be ugly. The atmosphere is already more charged than at the same stage in 2011, the last time a Republican House attempted to negotiate a debt limit increase with a Democratic Senate and White House.

That episode started with then speaker John Boehner (R-Ohio) trying to get his new majority – enabled by the Tea Party wave – to agree on what to ask in exchange for lifting the debt limit. At a speech in New York City in MayBoehner demanded trillions in “actual spending cuts and program reforms,” ​​an amount that would have been more than a debt increase.

Those caps only worked as intended for the first year, and then they were relaxed in a series of biennial budget agreementsmaking them only moderately effective in limiting spending.

The most significant immediate impact of the 2011 episode was that rating agency Standard & Poor’s issued a US credit rating downgrade for the first time.

Today, the Democrats have so far taken the position that President Barack Obama took in 2013 when he refused to renegotiate the debt ceiling. “You don’t reward those who hold the debt ceiling hostage,” the Budget Committee’s top Democrat, Rep. Brendan Boyle (D-Pa.), told The Bharat Express News.

Boyle expects Republicans to blink, as they have in past debt ceiling confrontations. “Each time we managed to raise the debt ceiling. And I think that history will continue,” he said.

On the Senate side, there is little patience among Democrats to please House Republicans. Senator Sheldon Whitehouse (DR.I.), a senior member of the Senate Judiciary Committee overseeing Social Security and Medicare, said: “We must not negotiate for the full trust and honor of the United States with MAGA extremists in the House” – a reference to the far right wing of the party. The threat of default is clear.

Proposals to reduce social security spending, for example by raising the retirement age, are politically poisonous, since polls show that most retirees rely on the system as a major source of income. That’s why former Republican chairman Paul Ryan (R-Wis.), a veteran of previous confrontations, said this week that the so-called reform of the law “takes time” and cannot be solved with a single deadlock over the debt ceiling.

Arrington, the budget chairman, made a similar comment: “Timing is a lot – aligning the right leadership and public sentiment with what we need.”

But Roy and his faction have tried to be disruptive, and House Republicans weren’t afraid to provoke an unpopular token vote this week on restricting access to abortion. The Freedom Caucus member said it was good that Republicans almost had a physical altercation on the House floor during McCarthy’s speaker ballot.

“We need a little bit of that,” Roy said on CNN. “We need a little bit of this kind of glass breaking to get us to the table so we can fight for the American people and change the way this place is dysfunctional.”