When Americans tune into the presidential debate, important issues like Social Security and Medicare are expected to be discussed. These programs are crucial for millions of Americans, especially seniors who have historically been a key voting demographic.
Understanding the candidates’ positions on these issues is vital for voters. This article delves into Joe Biden and Donald Trump’s stances on Social Security and Medicare, analyzing their proposals and actions during their respective terms.
Social Security
Social Security, established in 1935, is a fundamental part of the American social safety net, offering financial support to retirees, disabled individuals, and survivors of deceased workers.
However, the program is facing significant challenges. The Social Security Trust Fund is projected to be depleted by 2035, potentially leading to reduced benefits if no action is taken.
The impending insolvency is driven by demographic changes, such as an aging population and lower birth rates, resulting in fewer workers supporting more retirees.
“Addressing these financial challenges will require political will from both parties to increase revenues for Social Security,” explains Christian Weller, a senior economist and professor of public policy at the University of Massachusetts, Boston.
He adds: “Any reform efforts should begin with increasing revenues for Social Security’s future, as its benefits are already relatively low and offer little room for further cuts.”
Where Biden Stands on Social Security
Biden has consistently promised not to cut Social Security benefits. Throughout his campaign and presidency, he has emphasized his commitment to safeguarding and enhancing the program.
Biden has proposed raising taxes on wealthy Americans to ensure the program’s solvency. Specifically, he has suggested subjecting earnings over $400,000 to Social Security payroll taxes, which are currently capped at $168,600 in 2024. However, Biden has not fulfilled his 2020 campaign promise to increase taxes on the wealthy.
Biden has also expressed support for boosting benefits for low-income recipients and adjusting the cost-of-living adjustment (COLA) formula to better reflect seniors’ expenses.
Despite these proposals, Biden has not made significant changes to Social Security during his presidency. The challenges of implementing such reforms persist.
Where Trump Stands on Social Security
Trump has taken a more ambiguous stance on Social Security. During his presidency and recent campaign, he has stated that he would protect Social Security benefits. However, he has not outlined detailed plans on how he would ensure the program’s long-term solvency without cutting benefits or raising taxes.
Trump’s strategy often revolves around the belief that a stronger economy would naturally support Social Security. He argues that economic growth and job creation would increase payroll tax revenues, thereby bolstering the program.
Nevertheless, experts generally agree that economic growth alone will not be sufficient to address the substantial funding issues facing Social Security.
“Faster economic growth can certainly benefit Social Security’s finances,” says Weller. “But it can only improve Social Security’s finances if it is accompanied by strong wage growth.”
At various points, Trump has hinted at the possibility of cutting Social Security benefits. However, he has retracted many of those statements, emphasizing his commitment to protecting benefits.
He has also proposed combating fraud and waste within Social Security and Medicare, suggesting that this could save money without reducing benefits.
Earlier in his career, Trump referred to Social Security as a “Ponzi scheme” and advocated for its privatization. However, he abandoned this stance during his first presidential campaign, along with his previous support for raising the retirement age to 70. Currently, the retirement age for individuals born in 1960 or later is 67.
“I can’t think of any benefit cut less popular than an increase in the retirement age,” says Weller.
Medicare
Medicare, the federal health insurance program primarily for individuals aged 65 and older, is also facing its own set of challenges.
The program is projected to deplete its Hospital Insurance Trust Fund by 2036 unless measures are taken to ensure solvency. Rising healthcare costs, an aging population, and increased enrollment are the major factors contributing to Medicare’s financial strain.
“Historically, medical inflation has been higher than overall inflation, driving up the program’s costs,” explains Weller. “In recent years, medical inflation has been lower than anticipated, which has helped the program’s finances.”
Weller highlights the concern that medical inflation could rise again and jeopardize Medicare’s solvency.
Where Biden Stands on Medicare
Biden has been proactive in addressing Medicare’s shortfall. One of his significant legislative accomplishments, the Inflation Reduction Act, includes provisions to reduce prescription drug costs for Medicare beneficiaries. It allows Medicare to negotiate drug prices directly with pharmaceutical companies, a move expected to save billions for both the federal government and beneficiaries.
The Inflation Reduction Act mandates that drug companies pay Medicare if they raise prices faster than inflation. It also caps out-of-pocket expenses for beneficiaries, providing financial relief for those with high drug costs. Biden has proposed directing the savings from these measures into Medicare’s Hospital Insurance Trust Fund to extend its solvency.
Biden has also suggested increasing the Medicare payroll tax for individuals earning over $400,000 from 0.9 percent to 2.1 percent to further support the program.
During his 2020 campaign, he proposed lowering the Medicare eligibility age from 65 to 60 to expand health coverage to more Americans. However, this proposal has not been a priority during his presidency.
Where Trump Stands on Medicare
Trump’s stance on Medicare mirrors his approach to Social Security: he vows to protect benefits but provides limited details on how he would achieve this.
During his presidency, Trump did not enact significant reforms to address Medicare’s financial challenges.
His administration proposed various changes aimed at reducing healthcare costs for Medicare beneficiaries, such as initiatives to enhance price transparency, lower prescription drug prices, and reduce the cost of insulin. However, these efforts had limited impact on Medicare’s long-term funding issues.
Trump has voiced opposition to any cuts to Medicare benefits, positioning himself as a defender of the program. He has also suggested that addressing waste, fraud, and abuse within the system could save money.
During his administration, Medicare Fee-For-Service improper payment rates saw a modest decline as the Centers for Medicare & Medicaid Services (CMS) led efforts to identify causes of improper payments and implement action plans.
In 2023, Trump criticized Republicans who considered cutting Medicare to offset federal spending, arguing that such cuts were unnecessary.
Voting Trends of Older Americans
Older Americans constitute a significant voting bloc in presidential elections, and savvy politicians recognize that these votes can sway the outcome of an election.
According to the U.S. Census Bureau, individuals aged 65 and older comprised 25.7 percent of the voting population in the 2020 presidential election. In contrast, individuals aged 18–29 made up only 16.5 percent of the voting population. The report found that younger voters were underrepresented compared to the general population, while older Americans were overrepresented.
In essence, seniors show up to vote.
Experts note that many candidates focus on issues central to older Americans — such as Social Security benefits, Medicare, and prescription drug costs — during election years due to the significant impact of these programs on voters.
“Individuals contribute to Social Security throughout their careers with the expectation of receiving benefits in the future,” says Weller.
Weller describes Social Security as “a generational contract,” as the Social Security taxes of the current generation of workers fund benefits for current beneficiaries.
“Adjusting Social Security benefits is seen as breaking a promise,” Weller explains.
An April poll from the Pew Research Center revealed that more individuals in the 65 and older age group indicated they would vote for Trump (52 percent) than for Biden (45 percent) if the election were held today.
Presidential Influence on Social Security
Social Security’s tax rate and benefits are determined by law. Therefore, Congress must first amend the law to make adjustments, with the president subsequently needing to sign off on it.
For accounting purposes, Social Security is treated separately from the federal budget since it is a mandatory program, according to Weller. The Social Security Board of Trustees administers the program but lacks legislative authority over Social Security.
The president, like with any other issue, can propose changes to Congress and utilize various avenues to encourage or discourage members from pursuing specific proposals.
“While the president does not possess legislative power, he wields significant influence in introducing and advocating for large-scale changes,” notes Weller.
Over the past decade, members of Congress from both parties have put forth reform proposals for Social Security, ranging from lowering (or raising) the retirement age to modifying how the program is financed.
Despite numerous bills introduced in both the House and Senate, none have been signed into law.
“The two sides are too far apart in their proposals, and there is no immediate need to act since Social Security can continue to pay full benefits for the next decade,” says Weller.
Conclusion
Social Security and Medicare serve as vital safety nets for millions of Americans. Both presidential candidates are likely to touch on the challenges facing these programs during the upcoming debate. However, campaign promises do not always translate into concrete actions post-election.
While it is important for voters to be aware of the candidates’ positions, they should also remember that the ultimate power to reform Social Security and Medicare lies with Congress, not the president.