Trump May Consider Entitlement Cuts in Second Term
Donald Trump said in an interview on the sidelines of the Davos economic conference that he might be open to cutting entitlement programs like Medicare and Social Security in his second term.
Trump promised in 2015 not to cut entitlements, saying it would be "unfair" to seniors and those who've paid into the programs. But with trillion-dollar deficits of his own making staring at him for the next decade, the only rational choice is to find a way to reduce the costs of those programs.
Entitlement spending accounts for all but about 13 percent of the federal budget -- nearly two trillion dollars combining Social Security and health program-spending such as Medicare, Medicaid, CHIP, and Obamacare subsidies.
But Trump is delusional if he thinks that cutting those programs will be easy.
While Trump has repeatedly talked up strong economic growth, the federal budget deficit has swollen as his administration has pressed for tax cuts and increased government spending.
Asked if entitlement cuts would ever be on his agenda, Trump responded, “At some point they will be.”
As a candidate for the White House, Trump stood apart from much of the GOP primary field as he vowed to oppose cuts to Social Security and Medicare, while also ensuring every American had health coverage.
In the CNBC interview, Trump called tackling entitlement spending “the easiest of all things” and suggested higher economic growth would make it easier to reduce spending on the programs.
“Well, we’re going — we’re going to look,” Trump said. “We also have assets that we’ve never had. I mean we’ve never had growth like this.”
If we could grow ourselves out of our deficit difficulties, we would have done it long ago. This particular conservative fantasy is trotted out every few years as if it's a serious idea. To be sure, economic growth brings in additional revenue, which is immediately spent by this president and both parties in Congress, contributing to a skyrocketing budget deficit.
During the Obama years, Republicans actually tried to rein in the deficit a little by cutting military and domestic spending dollar for dollar. It weakened our military and made a lot of people angry. But the deficit was reduced to around $600 billion from a high of more than $1.4 trillion in 2009.
Republicans are trying to deal with Medicare spending by cutting payments to hospitals.
Early in his presidential campaign, Trump said he was a different sort of Republican, one who would not cut Social Security, Medicare or Medicaid.
The Medicaid promise was ultimately abandoned. The unsuccessful Republican drive to repeal “Obamacare” would have also limited future federal spending on that federal-state health insurance program for low-income people.
More recently, Trump’s 2020 budget called for deep cuts in Medicare payments to hospitals.
Although the White House countered that the proposal would not scale back benefits for seniors, Democratic congressional leaders and a major hospital group denounced the plan.
All cutting hospital payments does is drive up the cost of health care for everyone else -- hardly a solution.
Both Social Security and Medicare will run out of cash in the next decade. Something must be done before then to avoid catastrophe. The longer we wait to address the problem, the more difficult the solution will be. With both sides perfectly willing to demagogue the issue, political obstacles to addressing the crisis will be formidable.
Perhaps a president who doesn't care about the public's reaction or Democratic sniping will be able to start the long process of reform. Is Trump that president? As unpredictable as he is he may well be.