By: David R. Henderson
Many commentators have claimed that Republicans in Congress were wrong to boo President Biden when, in his February 2023 State of the Union speech, he accused congressional Republicans of wanting to sunset Social Security and Medicare. These commentators had one or both of two objections: it was unseemly to boo, and they shouldn’t lock themselves into a position of not being willing to reform Social Security and Medicare because both trust funds will run out of money next decade.
I’ll focus on the second point. Whatever you think about whether Social Security and Medicare should be sunsetted, you don’t have to believe that they should be to understand that some major reforms must be done to keep those programs viable—and sooner rather than later. So, Republicans and others could oppose sunsetting those programs while still wanting long-term reforms.
Many kinds of reforms could be done. I’ll discuss a few. To set the stage, we need to consider three things: the budget crunch, the difference between Medicare and Social Security spending, and the difference between reforms that take effect within a year or two and reforms that are further out in time. The former have virtually no chance of succeeding; the latter could succeed.
The Budget Crunch Is Coming
Imagine you’re out in the jungle and that in front of you is a steep, miles-long cliff on either side of your …