President Biden has accused Republicans of wanting to cut Medicare and Social Security, but his own policies will take away hundreds of billions of dollars promised to seniors through the two federal entitlement programs, according to a new report.
Casey Mulligan, an economics professor at the University of Chicago, estimates in a study published by the Committee to Unleash Prosperity that “anti-growth” policies spearheaded by the Biden agenda will ultimately reduce tax revenues for Medicare and Social Security by at least $400 billion and perhaps as much as $900 billion, depending on how long that policy lasts.
“Joe Biden has promised many times that he will not cut Social Security and Medicare benefits — and has even accused Republicans of a secret plan to scrap these programs for seniors,” the report says. “But the real risk to the financial security of retired Americans comes from Biden’s anti-growth welfare, regulatory, tax and employment policies that will reduce GDP, growth, jobs and wages.”
Mulligan explains that under Biden, inflation-adjusted real wages have fallen and real returns on many investments have turned negative.
President Joe Biden speaks about his administration’s plans to reduce prescription drug costs and protect Social Security and Medicare, Nov. 5, 2022, at Jones Elementary School in Joliet, Illinois (AP Photo/Patrick Semansky) (Copyright 2022 The Associated Press. All rights reserved.)
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Indeed, data from the U.S. Department of Labor consistently shows that during Biden’s presidency, worker wages rose on paper, but fell significantly when inflation is taken into account, which reached its highest level in four decades last year. In the meantime, retirement savings plans have been lost $4 trillion in value since Biden’s inauguration, according to a separate report previously released by the Committee to Unleash Prosperity.
“Promised Social Security and Medicare benefits are also jeopardized by low- or negative-growth economic policies,” Mulligan writes. “Today’s benefits are paid out of today’s wages, and tomorrow’s (and beyond)’s benefits are paid out of future wage increases. Literally, the programs give the elderly a share of the earnings of the nation’s workers.”
In other words, the more people work and the more each worker earns, the more payroll tax revenue is available to fund Social Security and Medicare. However, the reverse is also true, and according to Mulligan, that’s what’s happening under Biden: Fewer people are working and each worker is making less, so less tax revenue is going to the entitlement programs.
“The combination of health insurance expansions, economic regulation (including policies related to welfare programs and labor markets), energy or climate regulation, education policy and corporate taxation reduced growth and therefore revenue for the trust funds,” the report said. “Because Social Security and Medicare operate on a pay-as-you-go basis, benefits will come under severe pressure for years to come as Congress struggles to figure out how to make up for this worsening structural deficit. translates into lower Social Security benefits, which last for the rest of their lives, for any worker who reaches retirement age.”
A social security card. (AP Photo/Jenny Kane, File)
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Citing several factors, Mulligan estimates that the combined effect of Biden’s insurance, regulatory and tax policies is to reduce labor income by 5% to 6.5%.
Mulligan also outlines how workers’ real compensation per adult, which reflects “the proportion of adults employed, the number of hours they work, and the inflation-adjusted cash and fringe benefits they receive per hour worked”,3, 3% lower than the pre-pandemic trend. Meanwhile, the employment-to-population ratio is still 1.3% below its pre-pandemic level.
The report notes that while the pandemic hurt the economy, Biden’s policies have slowed growth: “Even if Biden’s economy had reached 2.0% annualized growth per adult as of the first quarter of 2021 – a lukewarm growth rate for a normal recovery – real compensation per adult would be 2.5% higher than now.”
Another factor reducing tax revenues for Social Security and Medicare, the report says, is the impact of school closures during the pandemic.
“Democrats’ support for pandemic school closures has already slowed student learning, which will translate into significantly less future earnings for today’s youth,” Mulligan writes. “This is another hit to Medicare and Social Security payroll tax bases.”
Schools across the country closed in March 2020 due to the coronavirus outbreak. (iStock)
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The new study comes as students in the US struggle with the effects of learning loss from school closures during the pandemic.
The education department’s National Assessment of Educational Progress, known as the “nation’s report card,” which tests a broad sample of fourth- and eighth-graders, was released in October and showed the “largest score drops” since the federal government began it at hold. standards in 1990.
Math and reading scores became big hits across the country, especially among the country’s most vulnerable students. Black and Hispanic students, for example, experienced sharper declines than white and Asian peers in fourth-grade math after already falling behind.
More recently, a Stanford University study found that students enrolled in schools during pandemic restrictions experience an average drop of 2% to 9% in their lifetime income, resulting in a 0% drop in states’ total GDP. .6% to 2.9%.
“At its most extreme, California has lost an estimated $1.3 trillion to learning losses during the pandemic,” wrote study author Eric Hanushek. “These losses are permanent unless a state’s schools can get better than their pre-pandemic levels.”
President Joe Biden speaking at the University of Tampa on February 9, 2023. (Joe Raedle/Getty Images)
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Hanushek argued that there is “overwhelming evidence that students in school are performing at significantly lower levels during the lockdown period and during subsequent adjustments to the pandemic than would have been expected without the pandemic.”
In 2020, Biden campaigned against opening schools. At the height of the debate over school closures in July 2020, for example Democratic National Committee placed an ad berating then-President Trump for being “desperate to reopen schools,” accusing him of “ignoring how the virus is spreading” and “risking the lives of teachers and parents” by “going against expert advice to go”.
The ad then showed a school hallway with an ominous voice asking, “Do you trust him (Trump) to do what’s best for our kids?”
In 2021, when Biden was in office, the White House was aware of attempts by the American Federation of Teachers (ATF) to lobby the Centers for Disease Control and Prevention (CDC) to adopt advisory language to allow the opening of schools. The lobbying efforts worked, and officials in the Biden administration appeared to be facilitating rather than resisting the ATF’s campaign, according to emails previously obtained by a watchdog group.
President Joe Biden speaks about his administration’s plans to protect Social Security and Medicare and reduce health care costs, February 9, 2023, at the University of Tampa in Tampa, Florida. (AP)
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Critics accused the Biden administration of dragging its feet on fully reopening schools, which happened months after Biden promised it would happen in his first 100 days.
School closure policies will cut tax revenues for Medicare and Social Security by $118 billion, according to Mulligan, who outlines the methodology behind his calculations in the report. He also estimates that Biden’s insurance, regulatory and tax policies will result in a tax loss for Medicare and Social Security of $296 billion to $385 billion over four years, and $592 billion to $770 billion over eight years if the president is reelected.
Overall, Mulligan estimates that the Biden agenda “will ultimately reduce Medicare and Social Security tax revenues by at least $400 billion and perhaps as much as $900 billion, depending on how long these anti-growth policies last.”
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The new study came weeks after Biden’s White House repeatedly claimed that congressional Republicans want to cut Medicare and Social Security by putting both programs “on the chopping block” — a claim GOP lawmakers have adamantly denied.
In a statement to Fox News Digital, a White House spokesperson reiterated these attacks on Republicans and praised Biden’s efforts to strengthen Medicare and Social Security.
“Congressional Republicans are seeking the largest cuts in Medicare benefits in decades and have a record of proposing other massive cuts to Medicare and Social Security,” said White House deputy press secretary Robyn Patterson. “President Biden, on the other hand, has released a detailed plan to extend Medicare solvency for another 25 years by making the wealthy pay their fair share and lowering drug costs for seniors. He is also leading a historic economic recovery that has created more than 12 million jobs, helped 10.5 million small business owners start small businesses and expand the Social Security Trust Fund.”
Aaron Kliegman is a political reporter for Fox News Digital.