What you need to know
- Federal spending on entitlements in general – including Social Security, Medicaid and Affordable Care Act subsidies – will grow from $3 trillion next year to $12.5 trillion in 30 years.
- The GOP wants to limit these costs, among other things, by raising the Medicare eligibility age to the Social Security retirement age, which is 67 for those born after 1960.
- Simply forming a bipartisan committee with no sense of urgency would result in a compromise proposal forgotten as soon as it is released.
Republicans hoped Americans would express a clear rejection of President Joe Biden’s economic policies when they went to the polls earlier this month. They came away with something much less decisive.
The GOP has gained control of the House of Representatives, but with the narrowest majority, and has no chance of capturing the Senate even if it wins Georgia in the second round.
Still, GOP leaders in the House are confident they can leverage their narrow victory for meaningful policy gains. It won’t be easy, but they do have one – and maybe more than one – path to success.
Returning to thorny issues, they will likely push for reforms of two major entitlement programs: Medicare and Social Security. Medicare spending is expected to top $1 trillion for the first time next year and grow faster than gross domestic product for the foreseeable future.
Federal spending on entitlements in general – including Social Security, Medicaid and Affordable Care Act subsidies – will grow from $3 trillion next year to $12.5 trillion in 30 years.
The GOP wants to reduce these costs by, among other things, raising the Medicare eligibility age to match the Social Security retirement age, which is 67 for those born after 1960. stay on the high side throughout their lives and increase premiums for higher-income Medicare beneficiaries.
The financial interests are high. Rapidly rising interest rates mean it’s time to act now, before the burden of paying down the debt to fund these programs becomes a major obstacle to deficit reduction.
But with only a slender majority in a single chamber, House Republicans really only have one card to play, and it’s one that Americans may, perhaps not fondly, remember from the early days of the Barack Obama administration.
House Majority Leader Kevin McCarthy can refuse to introduce so-called must-pass legislation — such as raising the debt ceiling or continuing funding for the federal government — until top officials from both parties in the House and Senate sit down with Biden and negotiate a deal. close to rights that their respective chambers can pass on and that Biden will sign.
The advantage of such an approach is that it produces a single take-it-or-leave-it proposition that centrist members of both parties can support. Trying to broker those kinds of deals through regular legislative channels would be impossible in the current political climate.
Simply forming a bipartisan committee with no sense of urgency would result in a compromise proposal forgotten as soon as it is released.
The downside to this approach is that the health and future of the economy is at stake that a handful of politicians can work behind closed doors to reach a single comprehensive compromise on one of the most contentious issues in American politics they can sell to their members before they breach the debt ceiling and cause the country to default on its debt obligations.