On Monday President Obama spoke at the annual White House Conference on Aging. As is often the case the presidents statements must be parsed in order to know what is really happening.
Obama: Now were often told that Medicare and Social Security are in crisis. We hear that all the time. And usually thats used as an excuse to try to cut spending on those bedrock programs. But heres the truth. Medicare and Social Security are not in crisis nor have they kept us from cutting our deficits by two-thirds since I took office.
Where to start?
(1) The Social Security trustees tell us that based on current projections the Trust Fund will only be able to pay about 75 cents on the dollar in less than 20 years. The trustees also tell us that the disability Trust Fund will run out of money next year.
(2) No one has cut Medicare more than Obama. First Obamacare cut $716 billion (between 2013-2022) from the program. In addition Obamacare requires the trustees to assume much lower doctor and hospital reimbursement rates than is realistic which made Medicare look more financially sound than it is.
(3) By focusing on deficits Obama is intentionally misleading people. The annual federal deficit is not the federal debt. Both Medicare and Social Security are off-budget and so do not typically have an impact on the annual deficit unless the government is borrowing from the trust funds which reduces that years deficit.
While the deficit has declined over the past few yearsin part because of a slowly recovering economy and increased tax revenue but also because of the sequester spending restraintstotal debt has continued to rise significantly. Obama: Thats why every budget request Ive submitted since taking office has included a common-sense proposal to automatically enroll workers without access to a workplace retirement plan in an IRA which would provide an additional 30 million Americans with access to a retirement plan at work. Um anyone can sign up for an IRA if they want one. It doesnt have to be at work. Obamas real goal is to force employers to contribute to that IRA thereby raising the cost of employing what are mostly lower and middle-income workersjust as he wants to do by raising the minimum wage imposing mandatory sick leave and what he has already done in requiring most employers to provide health insurance. It gets really old having to constantly point out where Obama intentionally misleads people but someone has to do it because the media have seldom done so. Todays PolicyByte was written by Dr. Merrill Matthews resident scholar with the Institute for Policy Innovation.
