No, Republicans are not going to take your Medicare
There is no grand plan to slash America's social welfare state, no matter what Democrats want you to believe
![A doctor's office waiting room.](https://cdn.mos.cms.futurecdn.net/nPPGCs7m8Y8v3VonZNEV4T-415-80.jpg)
If Democrats have their story right, those tricksy Republicans are masterfully executing a not-so-secret plan to wreck the American social welfare state. This supposed plan looks like this:
Step one: Pass a big tax cut that increases federal deficits and debt. So far, so good. GOP insiders expect a tax bill to become law by Christmas, if not sooner. And almost every budget expert thinks the legislation will reduce revenues by a trillion or two over the next decade. All those Republican claims to the contrary are merely a clever diversion. In reality, the new wave of red ink is a feature, not a bug.
Step two: Suddenly recover Obama-era fears about debt and deficits. With trillion-dollar annual deficits again the norm after the tax bill goes into effect, Republicans can dust off their old attack lines about how escalating debt risks another financial crisis. Interest rates will soar! The dollar will collapse! The U.S. economy is only seconds from midnight! Act now or welcome to Great Recession 2.0!
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Step three: Launch "an all-out war on the safety net," as my colleague at The Week Paul Waldman puts it, to avert a looming debt crisis. Medicaid, Medicare, Social Security, food stamps. No program for the needy will be safe from the merciless budget ax. House Speaker Paul Ryan finally makes his Ayn Randian dreams reality.
One obvious problem with this elegant connecting-of-dots is that it requires a level of strategic sneakiness and subterfuge that the Trumpublicans have yet to actually pull off. For instance, the original GOP tax reform plan developed by Ryan and the House Republicans was intended to pay for itself, at least when economic feedback was taken into account. Then one of the key reforms meant to raise revenue — the border adjustment tax — fell through.
Moreover, many Republicans have been surprised that various budget models are showing the current tax plan would add only incrementally to growth. Most mainstream GOPers sincerely believe tax cuts have the wonder-working power to amp up work, savings, and investment. Of course, tax cuts aren't the catalyst; they only pave the way for faster economic growth needed to boost worker incomes and fund a comprehensive safety net in an aging society.
Mainstream Republicans know faster growth alone can't address the nation's long-term fiscal challenges. They know social programs must be reformed such that future spending is less than currently projected. And it is not unreasonable to think that goal can be accomplished while also making sure the safety net continues to help those who need it most.
Take Medicare, for instance. In the past, both Republicans and Democrats have supported the idea of subsidizing beneficiaries with taxpayer dough, enabling them to purchase their own private insurance, much like what currently happens with ObamaCare. Such a reform might be able to deliver the current package of benefits for less than what government does. Likewise, Social Security could be reformed in such a way that it ensures long-term solvency while increasing benefits for low-income Americans. Indeed, many Republicans are in favor of expanding the Earned Income Tax Credit, the federal subsidy for low-income, working households.
The big question, then, is whether Republicans will approach entitlement and welfare reform in a way that intelligently restructures rather than haphazardly cuts for the sake of cutting. And there is some reason to believe the former approach will prevail. Recall that President Trump has in the past promised to leave entitlements alone. And he has shown little real concern about deficits, having once called himself the "king of debt."
The bottom line is that any efforts to cut too deeply into these programs in a rush to reduce deficits ASAP certainly isn't necessary, and who knows, Trump might actually help temper those efforts. The U.S. economy seems to be handling current debt levels just fine. What policymakers of both parties should want to avoid is the baseline scenario projected by the Congressional Budget Office where the federal debt nearly doubles over the next generation as a share of the economy. And if Democrats don't like the GOP approach, maybe it's time they suggest their own.
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James Pethokoukis is the DeWitt Wallace Fellow at the American Enterprise Institute where he runs the AEIdeas blog. He has also written for The New York Times, National Review, Commentary, The Weekly Standard, and other places.
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