Social Security and Medicaid spending: Inside the numbers
President Biden has thrust GOP proposals to cut Social Security and Medicare spending into a looming faceoff over the country’s debt ceiling.
While Republican leaders insist they have no plans to slash entitlements, previous remarks and proposals from GOP figures have fueled Democratic rhetoric on the issue.
“Folks in Congress, they want to eliminate a lot of healthcare coverage — those MAGA Republicans — increase costs for millions of Americans, and make deep cuts in programs that families and seniors depend on. And that’s what’s at stake now,” Biden said in a speech last week.
At the center of the clash over entitlements is the question of what constitutes a “cut.”
But one thing that isn’t in dispute is that the programs carry huge price tags. Here are some numbers to make sense of the debate:
Social security and other entitlements make up nearly half of the budget
Social Security, Medicare and Medicaid make up nearly half of the entire federal budget, with a total annual price tag of $2.7 trillion. That’s over three times as much as the country spends on defense, which is the largest discretionary budget item.
Entitlement programs are considered “mandatory spending” in the budget process, which also includes basic functions like money sent to state governments.
Biden’s attacks on GOP entitlement plans have largely focused on Sen. Rick Scott (R-Fla.), who has proposed to sunset every federal program as part of efforts to rein in government spending.
Following Democratic rebuke, Scott amended his proposal to exclude entitlement programs.
Other Republicans, including Sens. Mike Lee (R-Utah) and Ron Johnson (R-Wis.), have also proposed some version of entitlement cuts during their careers.
In rare agreement with Democrats, former President Trump has been adamant that entitlement programs should not be cut and has attacked former U.N. Ambassador Nikki Haley and other probable primary challengers for their previous backing of efforts to cut the programs.
Approximately 70 million people will receive Social Security benefits in 2023
A fifth of all Americans will receive Social Security benefits in 2023, about 70 million people in total. Another 64 million use Medicare and 84 million receive Medicaid.
The programs are facing a daunting future. The Congressional Budget Office (CBO) has estimated that costs will double by 2033, due to rising medical costs and the increasing number of Americans who are expected to sign up for the programs as the Baby Boomer generation ages.
The CBO report said that Social Security will run out of funding in 2032, sooner than previously projected. Others estimate that Medicare will also reach a budget shortfall in 2028.
Social security spending amounted to $1.3 trillion in the 2023 budget
Republicans say action is needed to avoid bankruptcy and a loss of promised benefits, and there seems to be some movement toward bipartisan solutions.
A group of senators are attempting to reach a deal on changes to Social Security to ensure that it is funded into the future. Talks are in their early stages, but changes could include increasing the retirement age or making higher incomes taxable.
Entitlement spending rapidly outpaces all other spending by the federal government.
Social Security by itself costs more than every cabinet department and government agency combined, minus the Department of Defense. Social Security spending rose to $1.3 trillion in the 2023 budget. The largest cabinet agency other than Defense, the Department of Health and Human Services, only cost $138 billion.
How entitlements spending compared to other expenses
That spending dwarfs notable federal agencies like NASA and the EPA, which cost a comparatively small $26 billion and $12 billion per year each, respectively.
Biden and Democrats have staunchly defended entitlement programs. Last month, Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), alongside Reps. Jan Schakowsky (D-Ill.) and Val Hoyle (D-Ore.), proposed the Social Security Expansion Act.
That legislation would use a tax on high-income Americans’ investment profits to fund Social Security for at least the next 75 years and increase benefits for the poorest recipients. Similar legislation was introduced in the 117th Congress. However, it has little hope of advancing in the GOP-controlled House.
The Biden administration announced plans to bolster Medicare funding as part of its 2024 budget proposal on Tuesday. By increasing the Medicare tax on high-income Americans and closing loopholes, the administration’s proposal would ensure solvency for an additional 25 years, they claim.
“Republicans don’t like being called out on this,” Biden said last month in Tampa. “A lot of Republicans — their dream is to cut Social Security and Medicare. Well, let me say this: If that’s your dream, I’m your nightmare.”
However, many Republicans say the alternative to reform is insolvency.
Rep. Michael Burgess (R-Texas), a senior member of both the Budget and Energy and Commerce committees, said the financial health of the entitlements will require Congress to follow a similar model.
“There will be a lot of pushback,” Burgess previously told The Hill. ”But at the end of the day, we all know, particularly the programs that have the trust funds — Social Security and Medicare — when those trust funds are exhausted, there are some bad things that happen to beneficiaries.”
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.