Budget Committee’s Arrington on Social Security & Medicare Solvency: “Let’s Get to Work!” - House Budget Committee
Yesterday, House Budget Committee Chairman Jodey Arrington (R-TX) opened the hearing formally titled “Medicare and Social Security: Examining Solvency and Impacts to the Federal Budget” with a statement stressing that “retirement security and health care security have 60+ million people counting on it.” His remarks included the observation that where we are today “is unsustainable and something must happen,” and concluded with a call to action for the Budget Committee to “get to work” on addressing the plight of these two critical programs.
In prefacing the meeting, Chairman Arrington set the table by reiterating the Committee’s goal to “develop a budget, enforce the budget, and live within your means.” Citing the $140 trillion unfunded liability now sitting on the federal government’s books, Arrington noted that 98% of that figure is related to Social Security and Medicare, and requested commentary on that issue from the hearing’s two witnesses, Stephen Goss – Social Security’s Chief Actuary, and Paul Spitalnic – Centers for Medicare and Medicaid Services Chief Actuary. Chairman Arrington’s prepared opening remarks can be viewed in full here.
Much of the two-hour discussion focused on the looming insolvency situation facing both Medicare and Social Security and the impact of benefit reductions caused by full depletion of the programs’ trust funds, particularly Social Security. One of the central themes in the hearing, however, was the relationship between Social Security and the national debt. In his remarks, Mr. Goss explained that Social Security’s trust funds are designed as legal entities operating separately from the general fund of the Treasury and, as such, do not contribute to the national debt. They in effect represent debt owed to future beneficiaries and, when this debt is redeemed–as is now happening–represent the replacement of this debt with debt owed directly by the public. From Social Security’s perspective, the funds comprising the trust fund balances have been accumulated through operation of the program and are pledged as benefits payable to the workers who have participated and built an earnings record under the program’s rules.
In discussing the timeframe for depletion of both programs’ trust funds, perhaps one of the most striking comments from participants came from Rep. Jimmy Panetta (D-CA 19), who said “Delaying action on financial matters often makes those matters worse.” Not a new thought, but certainly a persistent one.
To view the complete hearing, click here.
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