A press release has come across my desk, warning me that Nikki Haley is “coming after Social Security and Medicare.” The Republican presidential candidate has “made it clear again and again that she supports gutting Social Security and Medicare.”
Haley has proposed raising the retirement age for people who are currently in their 20s. I contacted her campaign, and they said this remains her position. “Yes, Haley has said she would only raise the retirement age for people in their 20s,” said a spokeswoman.
It is, I’d suggest, stretching a point to say that this policy idea “threaten(s) the pocketbooks of America’s seniors” (including the “nearly one in five residents” of New Hampshire), as the latest press release says.
What really surprises me, though, is who the release is from: Not from Haley’s Republican rivals in next week’s New Hampshire primary, Donald Trump or Ron DeSantis, but from the Democratic National Committee.
I guess they are trying to finish off the former South Carolina governor next week, so that Joe Biden can face Donald Trump (again) in November. Presumably the DNC thinks Trump will be easy to beat — as he was in, say, 2016. What could possibly go wrong?
I suppose we should give a halfhearted cheer that anyone is talking about the looming Social Security and Medicare crises in this presidential race, even if the talks aren’t always that serious.
Social Security is now just 10 years from default and Medicare just seven years. Their trust funds have holes in their accounts valued—in today’s money—at $26 trillion, or roughly equal to one year’s U.S. gross domestic product.
That’s in addition to the official U.S. national debt, which is also about equal to one year’s GDP.
Haley’s proposal, to raise the retirement age for people currently in their 20s, shouldn’t really be that controversial. When Social Security was first created, in the late 1930s, a third of people typically died between age 20 and 65. Today, the figure is just 15%.
Back then, the average life expectancy of a 65-year-old was another 13 years. Today it’s 20 years.
So the percentage of people paying in, but never collecting, has halved (and then some). And those people who do collect are living on Social Security, on average, 50% longer.
That’s excellent news, but it obviously changes some of the math on Social Security. So raising the retirement age for those in their 20s today is probably going to happen one way or another, but it’s not going to have any effect on the program’s finances at all for about 40 years.
DeSantis, trailing a far distant third in New Hampshire, has said he’s open to raising the retirement age for people “in their 30s and 40s.” His campaign didn’t respond to a request for comment.
As Donald Trump is the prohibitive front-runner for the nomination, I asked his campaign for their position on Social Security and Medicare. They directed me to their website. There I found a speech by the former president, ruling out any cuts to Medicare or Social Security “to help pay for Joe Biden’s reckless spending spree.”
Trump said to “save Social Security” he plans to cut international aid, “the mass-releases of illegal aliens that are depleting our social safety net and destroying our country,” the “left-wing gender programs” in the military, “the billions being spent on climate extremism,” plus “waste, fraud, and abuse everywhere that we can find it.”
It’s a shame nobody—Democrat or Republican—is proposing rescuing Social Security and Medicare through something simple, such as actually making people who don’t pay any tax pay some. This particularly means America’s very richest, such as the 130,000 households who now hold about 13% of all U.S. wealth but who often pay comparatively little tax, if any, because they live on lightly-taxed capital instead of heavily-taxed income.
“I don’t think the conservative take on @realDonaldTrump paying no taxes should be: BECAUSE HE’S SMART!,” wrote Ann Coulter a few years ago. “I’ve paid nearly 50% of my income in taxes, year after year, and any system that allows billionaires to pay ZERO is unspeakable corrupt. How about changing it, Democrats?”
A flat 1% annual tax on everyone’s wealth—from the richest to, yes, the poorest—would generate $1.4 trillion in income, enough to cut taxes on working people and rescue Social Security and Medicare. It would also be simple to levy and hard to evade.
Alas, it would offend the donor class. So you can see why nobody wants to do it.
Meanwhile, betting website Predictit says Trump now has an 86% chance of becoming the nominee. No doubt they are right. But New Hampshire, which I called home for many years, has a habit of shocking upsets—as it did in 1980 and 2008. You can’t call the primary until the voting is over.
