Recently, we’ve been hearing a lot out of Washington, DC about balancing the budget through cuts to Social Security, Medicare, and Medicaid. Social Security and Medicare are the two most popular government programs, with Medicaid not far behind. These programs are crucial to people, all across the country. Sixty-one million people receive social security benefits, forty-four million people use Medicare, with seventy million people enrolled in Medicaid and CHIP.
A Congress that just passed trillion-dollar tax cuts and a 700 billion dollar military budget now wants us to believe neo-liberal debt fear-mongering and accept devastating austerity. It is completely unnecessary when we understand Modern Monetary Theory (MMT) as Alan Greenspan explained to Paul Ryan when he was under oath before Congress.
In Ryan’s opinion, privatization is the answer to a non-existent solvency problem, just a money grab for the myriad donors that Ryan is beholden to. Millions lost their retirement savings in the 2009 crash and we don’t need a repeat of the same situation.
Paul Ryan’s dirty tricks exposed – by FDR pic.twitter.com/lEBW8PuWEJ
” SocialSecurityWorks (@SSWorks) March 29, 2018
The Hospital Insurance (HI) or Medicare part A payments are tied to revenue, but Medicare Supplement Medical Insurance (SMI) has to be paid out regardless of revenue, a much better and more secure source of funding. The only way it can ‘go broke’ or pay out less is if Congress chooses for that to happen.
Medicaid is funded jointly from federal and state government but mostly administered by the states. CHIP is also jointly funded but is capped with Centers for Medicare & Medicaid Services (CMS) deciding benefit allotments on a yearly basis.
Social Security is a little different as benefit payouts are tied to the amount paid to the FICA tax, and the so-called “trust fund”, which is not a pile of money you’ve contributed, just an accounting identity. FDR knew this when he started SS that the FICA tax was put in not for economic reasons, but to give people a sense of ownership and keep Congress from cutting it.
“I guess you’re right on the economics. They are politics all the way through. We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.” FDR
This can be changed by Congress. What we need is an MMT Grand Bargain, so that all promised benefits are paid and expanded regardless of revenue. That gives working people a much-deserved break from the regressive FICA tax and putting money in people’s hands that will be spent directly back into the economy.
Our Representatives know the operational reality of public spending; they may not call it Modern Monetary Theory (MMT) but they prove its points when they pass tax bills and spending bills without “pay-gos” . There’s been enough spending on the military and the 1%. It’s now time to spend the public money for the public purpose. Congress needs to fully fund and increase benefits of the programs we have while working towards covering everyone with Medicare for all. Not to score political points, but because people need and deserve it.