Democrats, let’s turn the debt ceiling standoff into a referendum on Social Security, Medicare, and Medicaid

President Biden has so far insisted he will not negotiate over the debt ceiling.  This makes sense on one level.  The Republicans are threatening to blow up the economy to get the Democrats to agree to – and share the blame for – unpopular budget cuts.  It is easy to see why Democrats want to resist going down this path.

Just saying “no” to negotiations may not work

But in the real world things are not so simple.  The House Republicans may pass a debt ceiling bill that includes spending cuts.  They are trying to find cuts that voters find acceptable if not appealing.  Proposals have been floated to cut spending on IRS enforcement, to implement work requirements for Medicaid, to claw back unspent covid funds, and to end the Covid state of emergency, which would reduce eligibility for a number of important government programs.  I expect we will see proposals to cut non-defense, non-entitlement spending as well as proposals to cut future spending.  For now, cuts to Social Security, Medicare, and Medicaid seem to be off the table (other than the work requirements for Medicaid recipients). 

If the Republicans come up with a proposal that is not radioactive and manage to pass it (far from guaranteed) then President Biden may indeed need to accept their proposal or negotiate for marginal improvements. 

Democrats need to set the agenda on fiscal policy

Of course, President Biden and the Democrats do not have to let Republicans set the agenda here.  Senate Democrats can pass a bill of their own, and President Biden can stake out a position and try to win over voters and put the heat on Republicans.  If they play their cards right, Democrats can turn the debate over the debt ceiling into a confrontation over the future of Social Security, Medicare, and Medicaid, and turn the 2024 election into a referendum on the future of these popular programs. 

This is the best chance Democrats have to preserve their Senate majority in the 2024 mid-terms. 

To illustrate the approach I have in mind, President Biden could give a speech emphasizing the following points:

If you listen to the noise coming out of Washington, you might think that we face a fiscal crisis, that our spending and debt are out of control.  That’s a bunch of malarkey.  There is no fiscal emergency.  The economy is growing strongly and inflation is coming down.  The deficit is coming down.  We should avoid erratic cuts that could tip the economy into recession. 

There is no emergency.  But it is true that government deficits and outstanding debt are expected to rise slowly over the next three decades.  This will occur primarily due to an increase in the number of retired people on Social Security, Medicare, and Medicaid, and increasing health care costs.

In the face of these demographic changes, we can maintain a prudent fiscal policy in two ways.  We can raise taxes modestly to maintain promised benefit levels.  Or we can slash benefits deeply, betraying our commitment to the old and the sick.

Democrats believe that the right way forward is to commit the needed revenues to these critical programs.  The benefits under these programs are not excessive.  Just ask anyone trying to get by on a Social Security check, or talk to the executive of a rural hospital that is struggling to cover its costs with Medicare reimbursements.  In fact, Democrats believe a reasonable case can be made for modest increases in benefit levels.  Our country is much richer today than it was when benefit levels were established.

We are willing to work with Republicans to eliminate waste and to find reasonable cost savings, such as on the cost of prescription drugs.  But Republicans are committed to sharp cuts in benefits.  Some even want to get rid of these programs entirely (see:  Paul Ryan, Rick Scott, George Bush, etc.).  In fact, almost all of the Republicans in Congress have pledged not to raise taxes for any reason – thus committing themselves to large cuts in Social Security, Medicare, and Medicaid. 

As I said, this is not an emergency.  We do not need to solve this problem today.  But if we do not find additional revenue in the next few years, then substantial cuts will happen automatically due to shortfalls in the Medicare and Social Security Trust funds. 

There is no reason for this to happen.  These programs were based on long term projections and it is not a surprise that adjustments are needed from time to time. 

I hope that Republicans agree to work with us to find additional revenue for these programs.  I am asking them to renounce their anti-tax pledge and agree to raise revenues to keep these functioning as originally intended.  But if they refuse, we will take our case to the American people in 2024.