Nikki Haley is correct: Refusing to touch Social Security means a 23% benefit cut
Tiana Lowe Doescher
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While former President Donald Trump proudly pledges not to reform entitlements, former U.S. Ambassador to the United Nations Nikki Haley has boldly called out such a pledge for what it really is: allowing Social Security and Medicare to collapse and drive our debt-to-GDP ratio to the highest point in our nation’s history.
“Any candidate that tells you they’re not going to take on entitlements is not being serious,” Haley said during the Republican presidential debate on Wednesday. Haley correctly noted that Social Security will reach insolvency in 10 years and Medicare in just eight. Left unsaid is the fact that the “do nothing” strategy preferred by the former president, and evidently Gov. Ron DeSantis (R-FL), who refused to back entitlement reform of any kind, including increasing the Social Security age, is tantamount to a drastic benefit cut for taxpayers funding the system. (Fewer than three workers are responsible for fully funding each current Social Security recipient, and that number is falling to two.)
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When, not if, Social Security hits insolvency, likely in 2033, that will trigger an automatic, across-the-board 23% benefit cut. The Committee for a Responsible Federal Budget found this translates to a $17,400 benefit cut for a typical newly retired dual-income couple. When Medicare goes broke in 2031, scheduled benefits for hospital expenses will fall by 11%. By 2047, that spending cut would reach 19% of the current baseline.
Haley also correctly noted that the real debt disaster lying in wait for Uncle Sam beyond these entitlements is the skyrocketing interest payments owed on our national debt. Thanks to President Joe Biden, this fiscal year’s deficit will amount to a little more than 6% of our GDP, an unprecedented amount during an economic expansion and relative domestic peacetime. By 2045, net interest payments alone will eat up 6% of our GDP and Social Security will consume another 6% of our GDP.
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Good on Haley for telling the truth. The question is whether the people want to hear what is honest or what is comforting.