The recent passage of a bill that suspends the debt ceiling until 2025 was a big deal for Social Security recipients because it prevented any possible immediate disruption or pause to benefits, which likely would have been problematic.
But avoiding one disaster does not fix the broader financial issues the Social Security program faces, including a funding shortfall and a potential cut to benefits in 2033 if something isn't done.
Following the passage of the debt ceiling bill, the issue once again found itself in the limelight, prompting a noteworthy response from the Biden administration. Let's take a look.
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The fallout from the debt ceiling
The debt ceiling debate became a contentious issue, with Republicans trying to bargain for concessions, mainly in the form of spending cuts, in order to agree to raise the country's borrowing limit to fund existing obligations. Democrats believed that they shouldn't have to negotiate to raise the debt ceiling because if the U.S. government did ever default on its debt, the consequences would likely be catastrophic for everyone.
In the end, the Republicans did get some concessions for agreeing to raise the debt ceiling, but not all Republicans were happy with the deal, believing that it didn't go far enough. Following the passage of the bill, The Wall Street Journal reported that House Speaker Kevin McCarthy is looking to form a bipartisan commission to further examine government spending, including mandatory government spending such as Social Security.
This did not seem to go over well with the Biden administration, which issued a noteworthy statement in response to the move.
"These new statements from the Speaker demonstrate that the House GOP are reversing the promise they made to President Biden and the country in the State of the Union, and that to shield billionaires and multinational corporations from paying a cent more in taxes, they very much intend to slash Americans' Medicare and Social Security benefits," a Biden spokesperson wrote.
Given the rough financial state of Social Security, which is currently dipping into its reserve funds because payroll taxes no longer cover all scheduled benefits, some Republicans have proposed making cuts to the program through measures like increasing the age that people can start claiming benefits.
At Biden's State of the Union address earlier this year, the president seemed to get many Republicans to agree that they wouldn't cut Social Security, but the true position of many politicians on the issue is still quite murky.
However, with the program looking at a possible 20% cut to scheduled benefits by 2034, something will need to be done to shore up the program's finances, and two of the leading suggestions are to raise taxes or cut benefits, which are two positions Democrats and Republicans are constantly at odds over.
An election issue
The statement from the Biden administration shows that Social Security could very likely become a big issue during this upcoming election cycle, which is beginning to kick into gear.
We're starting to get to a point where lawmakers are soon going to have to act in order to shore up the program, and it seems unlikely that Democrats and Republicans will find common ground, making it an issue the two are likely to tussle over.
Democrats are likely going to accuse Republicans of wanting to cut benefits, which would likely be very unpopular with the tens of millions of Americans that do claim Social Security. Some Republicans may not want to cut benefits, given that it may not be very popular, while others will want to cut benefits to try and get better control over the country's finances and more than $31 trillion of debt.
The Biden administration's recent statement is likely just a small preview of what's to come in the Republican primaries and the general election.
