Manchin’s call for Social Security, Medicare deal stokes GOP optimism

Correction: An earlier version of this report misidentified the lawmakers seeking the top Republican spot on the House Budget Committee.

Sen. Joe Manchin’s (D-W.Va.) comments signaling support for working across the aisle on entitlement programs like Social Security are getting a warm reception from some fiscal conservatives, despite skepticism about the chances of a bipartisan deal in the next Congress.

Discussing where he thinks both sides could find common ground in the next Congress, Manchin recently pointed to shoring up solvency for programs like Social Security and Medicare while pressing for action on tackling the nation’s climbing debt. 

“If we don’t look at the trust funds that are going bankrupt, whether they be Medicare, Medicaid, Social Security, highway, all the ones — there are tremendous problems right now,” Manchin, a key centrist, said late last week.

Manchin’s comments are in stark contrast to recent Democratic attacks hammering GOP proposals for Social Security and Medicare in the final campaign stretch before Election Day. And it’s a shift that has drawn some early positive reaction from Republicans.

“I gladly welcome any Democrat who puts aside partisan fear-mongering to work with us to ensure Medicare and Social Security return to solvency,” Rep. Kevin Hern (Okla.), head of the conservative Republican Study Committee’s Budget and Spending Task Force, told The Hill on Monday.

“As a longtime advocate of protecting Social Security and Medicare, Representative Smucker looks forward to working with his colleagues to save and strengthen both programs,” Rep. Lloyd Smucker’s (R-Pa.) office also told The Hill. 

Smucker is one of a handful of Republicans seeking to lead the House Budget Committee in the coming Congress if the party wins control of the House on Tuesday, and who prompted headlines last month over potential spending plans under a GOP majority.

As far as Democrats are concerned, House Majority Leader Steny Hoyer (D-Md.) said Monday that the party would work with “anyone who wants to protect Social Security, Medicare, and other programs that help Americans and their families thrive,” but he cast doubt on chances of a bipartisan compromise.

“Unfortunately, I don’t expect Republicans to join us in that commitment to put people over politics,” he told The Hill.

Hoyer also took aim at Republicans over plans to potentially use the nation’s debt ceiling, which experts say Congress must address in early 2023 or risk a historic default, to secure potential spending cuts and entitlement reforms that many Democrats find unpalatable.

Hern told Bloomberg Government last month that he supports using the debt limit as “a leverage point.” Other Republicans indicated to the outlet they are eyeing potential changes to Social Security and Medicare, such as tightening eligibility requirements and trimming benefits for those on the higher end of the income bracket.

The comments sparked a wave of media coverage while feeding Democratic lines of attack tying Republicans to potential Social Security and Medicare cuts — criticism that GOP leadership has also pushed back on. The attention also shined a light on two programs that experts say could become insolvent in the coming years without reforms.

According to the Committee for a Responsible Federal Budget, Social Security’s Old-Age and Survivors Insurance Trust Fund is on track to becoming insolvent in roughly 13 years. And Medicare has about half the time until it could reach the same fate, the group said, citing data from trustees.

If both programs were to become insolvent, it doesn’t they would stop distributing benefits, but they also wouldn’t be able to pay for all of the promised benefits, explained Bob Moffit, senior research fellow in the Center for Health and Welfare Policy at the conservative Heritage Foundation.

“And there will be a reduction in payment for the benefits that will be equal to whatever the revenues are coming in,” he said. “So, if the taxes are not sufficient to pay for all of the benefits, that reduction will take place automatically.”

Republicans have been cautious when it comes to unveiling details about potential changes to Social Security and Medicare, but some have shared inklings as to possible reforms they could try to take on.

One of the proposals outlined in a plan released by the Republican Study Committee, the House’s biggest conservative caucus, would gradually increase the “normal retirement age at a rate of three months per year until it reaches 69 for those reaching age 62 in 2030.” The proposal further plans to “realign the Social Security full retirement age to account for increases in life expectancy since the program’s creation.” 

The plan also includes proposals to change age requirements for Medicare eligibility, as well as measures geared toward promoting “better integration of private insurance with the government-run DI (Disability Insurance) system.”

But it’s unclear where Congress could find compromise on the issues. Democrats have pushed back on the GOP proposals, and Republicans have also signaled resistance to ideas that have previously drawn support from some Democrats.

“Republicans have a list of eligibility reforms, and we don’t like the tax increases,” Rep. Jodey Arrington (R-Texas) told Bloomberg Government last month. 

By contrast, Democrats have previously pushed to raise rates for the payroll and self-employment taxes that finance Social Security funds.

“Either they’re going to have to raise contributions to support the program, or they’re going to have to scale back benefits in order to keep the benefits affordable, given the amount of funds flowing into the trust funds, and both of those things are unpleasant, unpleasant things to do on popular things to do,” said Gary Burtless, a senior economic studies fellow at the left-leaning Brookings Institution.

Burtless said Congress could also raise the maximum level of Americans’ annual earned income that’s subject to the Social Security payroll tax. “The public favors that, and it’s not surprising it does because the only people who have to pay higher taxes under that scenario are people who are already at the maximum taxed earnings amount,” he said.

But experts note Democrats would have to proceed with caution on such an option, considering a key campaign pledge by President Biden to not raise taxes on those making below $400,000 annually.

With Tuesday’s midterms likely to result in the parties splitting control over the levers of government, experts acknowledge the new Congress could see more opportunities for lawmakers to work together, though the political climate adds deep uncertainty over any type of bipartisan deal on entitlement programs.

Richard Johnson, a senior fellow for the Income and Benefits Policy Center at the Urban Institute, said he “wouldn’t be surprised” to see potential changes to Medicare in the next Congress, noting Medicare fixes are almost “an annual event.”

“Medicare has more of a direct impact on government outlays,” he said, explaining part of the program’s funding comes from general revenues, while “Social Security only comes out of the trust fund.”

“We have seen commissions come together and try to hammer out changes that would affect all supports for older people, and these people who don’t have to get elected can come up with these ideas,” he said. “But Congress has never done that, and it’s maybe a little bit of wishful thinking to think that we could solve all these problems at once.”

–Updated at 11:24 a.m.