Trump was asked about how he would balance the budget without cutting programs like Social Security, and he responded, “You have tremendous waste, fraud, and abuse. That we’re taking care of. That we’re taking care of. It’s tremendous. We have in Social Security right now thousands and thousands of people that are over 106 years old. Now, you know they don’t exist. They don’t exist. There’s tremendous waste, fraud, and abuse, and we’re going to get it. But we’re not going to hurt the people who have been paying into Social Security their whole life and then all of a sudden they’re supposed to get less.”
Now, it is true, according to Social Security’s inspector general, that there are as many as 6.5 million Social Security numbers linked to people over the age of 112. But almost none of those people are receiving benefits. Their accounts simply were never officially closed following their deaths. So there was a bit of Trumpian hyperbole here.
More importantly, however, Social Security’s unfunded liabilities approach $26 trillion. That’s not because of waste or administrative glitches; it’s because of shifting demographics. We are living longer and having fewer babies. In 1950 there were 16.5 workers paying into the system for every retiree taking benefits out. Today there are just under three. By the time our children retire, there will barely be two.
The idea that we can save Social Security without making any changes to the system — without anyone getting less or paying more — is part and parcel of the budget fantasies that Republicans have been indulging this campaign season. (Democrats indulge such fantasies regardless of the season.)
The national debt is on a trajectory to increase from $19 trillion today to $29.3 trillion by 2026. According to the Government Accountability Office, improper payments — the government’s catch-all term for “waste, fraud, and abuse” — amounted to roughly $125 billion in 2014. That’s real money. And it almost certainly understates the real amount of waste. But, still, it is nowhere near enough for its elimination to balance the budget on its own.
If we are serious about cutting federal spending, we need to look at where the money really goes.
Democrats like to blame defense spending. But discretionary defense spending currently makes up roughly 15 percent of federal spending. More importantly, these outlays are expected to fall by 8 percent over the next decade, after inflation and population growth are accounted for.
Meanwhile, conservatives criticize domestic discretionary spending. After all, this includes those social-welfare programs conservatives hate. And it is the home for much of the waste, fraud, and abuse that Trump was talking about. But all domestic discretionary spending combined — everything from the FBI to the FDA, from the Department of Education to the Department of Commerce — is just another 15.5 percent of federal spending. And, after inflation and population growth are accounted for, it is expected to decline by 12 percent over the next ten years.
Undoubtedly, there are domestic programs that are wasteful or that do more harm than good. In fact, it’s hard to think of one that doesn’t fall into one of those categories. We should cut wherever we can. And defense is hardly immune from waste, even if you assume that all of our far-flung military interventions are truly necessary to national security. But the truth is, neither defense nor domestic discretionary spending is responsible for our growing debt crisis.
Just three programs, Social Security, Medicare, and Medicaid, currently absorb more than half of all federal spending. And, unlike defense or discretionary domestic spending, they are growing. Medicaid spending will rise by 21 percent over the next ten years, even after inflation and population growth are taken into account. Social Security will be up 30 percent. And Medicare is expected to increase by a stunning 40 percent. How can one possibly expect to reduce the debt without making some sort of reforms to these programs?
Instead, we get the assertion that we’re going to end “waste, fraud, and abuse,” an empty promise that dates back at least to Jimmy Carter.
On the Democratic side, both Hillary Clinton and Bernie Sanders stand steadfastly against entitlement reform. Indeed, both candidates talk breezily about increasing benefits. But we should expect better from Republicans.
This is not a criticism solely of Trump. All the GOP candidates have been remarkably tentative about discussing the need for cutting entitlement spending. The reason is readily apparent. In Iowa, 27 percent of caucus goers were over 65, and another 46 percent were between 45 and 65. In New Hampshire, 68 percent of Republican primary voters were over 45. In South Carolina, seniors are expected to make up a quarter of registered voters. It is no wonder that Republicans are afraid of offending them.
Yet, it is impossible to balance the budget or reduce the size of government without offending somebody.
We’ve heard a lot in this campaign about “leadership,” “strength,” “courage,” and “standing up to the special interests.” But the candidates who promise to stare down ISIS mano a mano cannot bring themselves to tell grandma that programs like Social Security and Medicare are unsustainable at their current levels.
The primary campaign appears to be descending into another round of: “You’re a liar.” “No, you’re a liar.” Perhaps, if someone wanted to stand out, he could start with a little truth-telling about the budget.
But that would take “leadership,” “strength,” “courage,” and “standing up to the special interests.”
Michael Tanner is a senior fellow at the Cato Institute and the author of Going for Broke: Deficits, Debt, and the Entitlement Crisis.