Battle over Mandatory (aka “Entitlement”) Spending

[nycfan]

The GOP budget framework aims for $880 billion in mandatory spending cuts over 10-years.

The Treasury Department explains it this way:

“…Mandatory spending, also known as direct spending, is mandated by existing laws. This type of spending includes funding for entitlement programs like Medicare and Social Security and [most Medicaid and] other payments to people, businesses, and state and local governments. [MY NOTE: This also includes interest payments on the National Debt]

For example, the Social Security Act requires the government to provide payments to beneficiaries based on the amount of money they’ve earned and other factors. Last amended in 2019, the Social Security Act will determine the level of federal spending into the future until it is amended again.

Due to authorization laws, the funding for these programs must be allocated for spending each year, hence the term mandatory.

… Discretionary spending is money formally approved by Congress and the President during the appropriations process each year. Generally, Congress allocates over half of the discretionary budget towards national defense and the rest to fund the administration of other agencies and programs. These programs range from transportation, education, housing, and social service programs, as well as science and environmental organizations. …”

Fiscal Data Explains Federal Spending

Check out @FiscalService Fiscal Data’s new federal spending page! #FederalSpending

fiscaldata.treasury.gov

2/3 of the budget is mandatory spending (and the interest expense has been increasing significantly due to higher interest rates), so anyone talking about material budget cuts is necessarily talking about cutting mandatory spending.

 

[nycfan]

The U.S. Treasury is pretty amazing about how much data they provide (unless that gets broken), though it can be daunting to slog through the details.

 

[nycfan]

 

[ChileG]

Woah…who was president between 2019 and 2020 when government spending compared to GDP jumped up so high?

Probably Obama’s fault.

 

[nycfan]

Anyway, with all that as background, and with a determination to extend tax cuts that are expiring, we should take seriously the intent to cut mandatory spending.

The GOP is focusing on Medicaid, talking about what would amount to cutting 8-15% of the budget for providing healthcare services to the poor and middle class in this country. Medicare now covers the majority of nursing home care for Americans and covers 4 in 10 births.

 

[gtyellowjacket]

So are they hoping for an average of $88 billion a year or $880 billion a year? $88b seems doable but doesn't really move the spending needle enough. $880 billion a year seems impossible but still isn't going to be enough to close the gap.

I really think Trump is going to run into the math. I do think he will go after defense and potentially make some pretty big cuts but it won't be enough. I think eventually he's going to have to let his tax cuts expire and blame the Democrats but most voters won't buy it. That's how I hope it's all going to work out.

 

[ChileG]

Republicans - I have been asking this for weeks if not months - you okay with cutting all these services and “entitlements” when every penny saved and then some will be handed to the top 1% in the form of tax cuts that they don’t need?

I do understand why none of you will answer the question, though.

 

[nycfan]

Anyway, Trump has repeatedly said that there will not be cuts to Social Security or Medicare, with a big asterisk — except fraud and waste.

I don’t think anyone would oppose cutting fraud or waste conceptually, the question will be how do Musk and Trump and the GOP define that? In particular, Social Security is not just retirement benefit payments, it also includes disability payments and “waste” could easily be stretched to include questioning whether eligibility standards are too forgiving and therefore wasteful.

 

[CFordUNC]

I'll never understand how and why so many blue-collar, hard-working, salt of the earth, everyday Average Joe and Jane in America openly cheer on the richest man in the world- someone who isn't even American by birth- openly calling them "parasites" and hellbent on squeezing them out of their last pennies in their old age.

 

[Huh?]

For Democrats and Republicans alike, there is no way out of the deficit box without addressing mandatory spending. There is little fraud in Social Security - the government is pretty good at knowing when its citizens are born, when they die, and how much they fund into the system in between. There are issues to address in SSI eligibility and provider fraud in Medicaid and Medicare, but we seem reluctant to really touch that in a meaningful way.

You either have to reduce benefits or increase taxes. It's pretty simple math, and will (should) be the major political issue for this country over the next two decades.

 

[nycfan]

Musk eyes Social Security and benefit programs for cuts while claiming widespread fraud​

Elon Musk says Social Security and other federal benefit programs will be targeted in his hunt for fraudulent spending

GDPR Support

“… The billionaire entrepreneur, who is advising President Donald Trump, suggested that $500 billion to $700 billion in waste needed to be cut.

“Most of the federal spending is entitlements,” Musk told the Fox Business Network. “That’s the big one to eliminate.”

… Musk’s estimate for the level of fraud in entitlements far outpaces figures from watchdogs like Social Security’s inspector general, who previously said there was $71.8 billion in improper payments from fiscal years 2015 through 2022. That’s less than 1% of benefits paid out during that time period.

Musk also said there were “20 million people who are definitely dead marked as alive in the Social Security database.” However, the leader of the agency has rejected claims about widespread payments to dead people.

… Musk said Monday that federal entitlements are “a mechanism by which the Democrats attract and retain illegal immigrants by essentially paying them to come here and then turning them into voters.” The allegation echoed the “great replacement” theory, which claims that politicians are trying to expand their power by reshaping the country’s racial demographics. …”

 

[UNCatTech]

The GOP budget framework aims for $880 billion in mandatory spending cuts over 10-years.

The Treasury Department explains it this way:

“…Mandatory spending, also known as direct spending, is mandated by existing laws. This type of spending includes funding for entitlement programs like Medicare and Social Security and [most Medicaid and] other payments to people, businesses, and state and local governments. [MY NOTE: This also includes interest payments on the National Debt]

For example, the Social Security Act requires the government to provide payments to beneficiaries based on the amount of money they’ve earned and other factors. Last amended in 2019, the Social Security Act will determine the level of federal spending into the future until it is amended again.

Due to authorization laws, the funding for these programs must be allocated for spending each year, hence the term mandatory.

… Discretionary spending is money formally approved by Congress and the President during the appropriations process each year. Generally, Congress allocates over half of the discretionary budget towards national defense and the rest to fund the administration of other agencies and programs. These programs range from transportation, education, housing, and social service programs, as well as science and environmental organizations. …”

Fiscal Data Explains Federal Spending

Check out @FiscalService Fiscal Data’s new federal spending page! #FederalSpending

fiscaldata.treasury.gov

2/3 of the budget is mandatory spending (and the interest expense has been increasing significantly due to higher interest rates), so anyone talking about material budget cuts is necessarily talking about cutting mandatory spending.

Great, I'm sure President Musk and his trump puppet have a great plan to achieve these cuts.

Let's just cut all government spending and let everyone figure out how to move forward. I'm sure that the trump voters that believe the government does nothing will then be able to see what the government actually does.

 

[nycfan]

Cutting Medicaid?​

How Republicans could change the program.

Cutting Medicaid?

How Republicans could change the program.

www.nytimes.com

“Republican leaders in Congress have directed the committee that oversees Medicaid to cut $880 billion from the next budget [MY NOTE - the next budget is for the coming fiscal year that starts October 1 but projects spending over 10 years]. They say these cuts aren’t necessarily aimed at Medicaid, the insurance program for 72 million poor and disabled Americans. The cuts could come from Medicare, for instance. But Trump has vowed not to touch that very popular program. And a sum this large can’t come from anywhere else.

 

[CFordUNC]

We really need to remove the SSA tax cap. I say that as someone whom it would affect comparatively more so than ultra-wealthy people and lower middle class people. There's no reason for there to be a cap, IMO.

 

[UNCatTech]

Musk eyes Social Security and benefit programs for cuts while claiming widespread fraud​

Elon Musk says Social Security and other federal benefit programs will be targeted in his hunt for fraudulent spending

GDPR Support

“… The billionaire entrepreneur, who is advising President Donald Trump, suggested that $500 billion to $700 billion in waste needed to be cut.

“Most of the federal spending is entitlements,” Musk told the Fox Business Network. “That’s the big one to eliminate.”

… Musk’s estimate for the level of fraud in entitlements far outpaces figures from watchdogs like Social Security’s inspector general, who previously said there was $71.8 billion in improper payments from fiscal years 2015 through 2022. That’s less than 1% of benefits paid out during that time period.

Musk also said there were “20 million people who are definitely dead marked as alive in the Social Security database.” However, the leader of the agency has rejected claims about widespread payments to dead people.

… Musk said Monday that federal entitlements are “a mechanism by which the Democrats attract and retain illegal immigrants by essentially paying them to come here and then turning them into voters.” The allegation echoed the “great replacement” theory, which claims that politicians are trying to expand their power by reshaping the country’s racial demographics. …”

How do these dead people cash the checks?

Or is the money being direct deposited into accounts that it could be retrieved from?

 

[Huh?]

We really need to remove the SSA tax cap. I say that as someone whom it would affect comparatively more so than ultra-wealthy people and lower middle class people. There's no reason for there to be a cap, IMO.

As a first step, I'd support a doughnut in which the cap kicks in at current levels and then kicks out again over $400K.

 

[nycfan]

Cutting Medicaid?​

How Republicans could change the program.

Cutting Medicaid?

How Republicans could change the program.

www.nytimes.com

“Republican leaders in Congress have directed the committee that oversees Medicaid to cut $880 billion from the next budget [MY NOTE - the next budget is for the coming fiscal year that starts October 1 but projects spending over 10 years]. They say these cuts aren’t necessarily aimed at Medicaid, the insurance program for 72 million poor and disabled Americans. The cuts could come from Medicare, for instance. But Trump has vowed not to touch that very popular program. And a sum this large can’t come from anywhere else.

“… Anything more to lower the federal government’s share would put the burden on states. And lawmakers there could deal with the problem in their own ways. They could cut optional populations like the Obamacare group. Twelve states have laws that will automatically do this if federal funding drops. If they don’t want to drop people, states can drop optional benefits, such as prescription drug coverage.

After those cuts, states face tough choices.

They could pay doctors, hospitals and nursing homes less for care. But there is a limit. If Mississippi suddenly started paying $50 for an echocardiogram instead of around $160, cardiologists might stop seeing Medicaid patients. (Many Medicaid patients already struggle to find care because the program pays doctors so little.) Cuts like these could also put some nursing homes or rural hospitals out of business.

Even so, states would still need a lot more money for Medicaid, usually their second-largest expense after education.

Where could they get it? They’d have to sacrifice other priorities. One option is to cut education. Another is to raise taxes. None of these would be required by federal legislation; it’s up to the states how they cope. …”

 

[Huh?]

Unless you are burying Aunt Betty in the backyard, the government is surprisingly good at knowing when you die.

 

[CFordUNC]

As a first step, I'd support a doughnut in which the cap kicks in at current levels and then kicks out again over $400K.

Yeah, totally agreed, that is a great first step.

 

[Huh?]

The way Republicans will cut Medicaid is to change the reimbursement formula to the states from 90% to capitation-based block grants. Several states have it built in to their legislation that they will abandon the ACA if the feds change the reimbursement formula to the states.

This will have huge consequences to who has and doesn't have access to chronic health services.