Top Senate Republican: Slash Social Security Or We'll Wreck US Economy
Sen. John Thune
Sen. John Thune of South Dakota, the number two Republican in the U.S. Senate, said on Tuesday that the GOP plans to use the debt ceiling as leverage to make cuts to Social Security and other social safety net programs.
"There's a set of solutions there that we really need to take on if we're going to get serious about making these programs sustainable and getting this debt bomb at a manageable level before it's too late," Thune said in an interview with Bloomberg News, adding that raising the retirement age is one of the solutions Republicans want to explore.
Playing politics with the debt ceiling could have disastrous consequences for the American economy, observers say.
If the debt ceiling is reached — which the Treasury Department says will happen some time in 2023 — the United States will be unable to pay bills for spending already authorized by Congress.
"Failure to set the debt ceiling at the level necessary to meet borrowing needs could jeopardize the full faith and credit of the United States by preventing the Treasury from paying the government's bills," the House Budget Committee said in an explainer posted to its website.
Yet Republicans are dangling the threat of not raising the debt ceiling in order to make cuts to Social Security, one of the most popular social safety net programs.
The program has near universal support, according to an AARP poll from 2020. Ninety-six percent of voters said Social Security is "either the most important government program or an important one." What's more, voters do not want to see the program cut, with 89 percent telling AARP that "it would be unfair to people who are retired or near retirement to make major changes to Social Security that would affect them."
Republicans have floated multiple ideas for making cuts to the program, including raising the retirement age from 65 to 70 and forcing Congress to reauthorize spending and put the program at risk every year.
It's not the first time Republicans have held the debt ceiling hostage in an effort to extract concessions from Democrats.
In 2011, after the GOP took control of the House, Republicans refused to raise the debt ceiling unless then-President Barack Obama agreed to significant spending cuts to the federal budget.
Eventually, Republicans agreed to raise the debt ceiling after Democrats compromised, allowing caps on discretionary spending.
However, the protracted battle led the credit rating agency S&P to downgrade the United States' credit rating to its current AA+ from its earlier AAA rating.
Republicans haven't said how far they're willing to go this time with the debt ceiling.
Thune told Bloomberg, however, that defaulting is "not an option."
Democrats criticized Thune's plan. Sen. Tina Smith of Minnesota called it "appalling but not surprising."
"Republicans will hold our entire economy hostage in their crusade against Medicare and Social Security," Smith tweeted.
Does the Republican Party call for these demands when a Republican is president?
Of course not. Republican Senate leaders clearly understand that defaulting on the national debt under a Republican president would be disastrous for their electoral hopes in future elections. This is why Republicans never pressed these outlandish threats while former President Trump was in office. During his chaotic tenure, “…a majority of Senate Republicans voted to raise or suspend the debt limit three times as Trump added nearly $8 trillion to the national debt.” Republicans only care about the debt ceiling when Democrats are in charge.
Has the Republican Party attempted to hold Social Security and other social safety nets hostage in the past?
Yes, Republicans made very similar threats while President Obama was in office, proving that the Republican Party is fine with potentially collapsing the United States economy if a Democrat will take the blame. In 2011, the United States was within 72 hours of defaulting after Republicans demanded spending cuts. Even after the eventual Budget Control Act of 2011 was signed into law, “…markets plummeted, interest rates increased, and the country’s borrowing costs went up by $1.3 billion.” In 2013, Republicans tried to run the same playbook, but Obama refused to negotiate spending cuts into the deal. Obama’s standing up to the Republicans prompted the GOP to accept a clean increase in the debt limit in years since, saving the economy.
What happens if the debt ceiling defaults?
Unfortunately, if the debt limit is exceeded, “…the Treasury can't sell any more bonds and other securities to pay off the debt from previous deficits. Put simply: it can't get cash to pay off bills the government has already accumulated.” This outcome would result in a catastrophe for the United States economy. Some potential outcomes include “disastrous economic fallout including higher interest rates, millions of job losses, and a major hit to the country’s GDP.”
Reprinted with permission from American Independent.
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