MAGA Billionaires Plan War on Social Security & Medicare Benefits

If you didn’t believe it before, you should listen carefully now that Elon Musk and Vivek Ramaswamy have been charged with cutting waste from federal spending. The large part of the federal dollars that are spent on Social Security and Medicare are definitely in their crosshairs.

And Senator Rick Scott, who recently lost his quest to become the Senate Majority Leader, is right there with them. Scott, who is estimated to have a net worth close to $300 million and is considered the richest senator, earned much of his fortune in healthcare. His company was subsequently charged with 14 felonies for Medicare and Medicaid fraud and paid over a billion dollars in fines.

As a senator, he formed a PAC to reduce costs. Some of its policies can be found here. They would deconstruct the government as we know it and are close to many proposals in the 2025 plan. He wanted Congress to receive an annual report on the sustainability of Medicare. Then, by claiming it could not be sustained, would he have moved to diminish current benefits?

According to the Peter G. Peterson Foundation, Medicare is the second largest expenditure in the Federal budget, with expenditures of 839 million dollars in 2023. Medicare covers seniors over 65, and some others, for hospital costs, medical, and ancillary care, and prescription drug costs. This number represents 14% of federal spending and covered 89 million people, or 20% of the population in that year. Financing comes through an income-based payroll tax, fees, and the Hospital Insurance Trust Fund. and from the general fund. A reluctance to increase the salary cap contribution levels has contributed to a projected Medicare fund deficit. The large cohort of “baby boomers” just now hitting the system will strain total expenditures and will drive calls for reducing costs.

Of course, the primary expense in the federal system is for Social Security benefits. In 2024, as reported by the SSA, almost 68 million Americans received a monthly check from Social Security. This cost was estimated to be 1.5 trillion dollars for this year. In 2023, that expense was 21% of the federal budget. Although often referred to as an entitlement, these funds are pulled from earnings, invested, and returned to workers upon retirement. To be eligible for the benefit, a worker must have paid into the system for 40 quarters, or at least ten years, over their working life. To combat inflation, a cost of living (COLA) expense is factored into the allotments each year and is based on average costs. For the upcoming year, the average increase will be about $50 monthly.

For most beneficiaries, (9 of 10 eligibles over 65) Social Security was the major source of their annual income. The average monthly benefit is around $1900.00 or about $23,000 annually. Payments are calculated from the total earnings attributed to each retiree during their years of employment. (Additional payments are made to disabled workers and surviving children of deceased contributors.)

One fact that seems to have escaped our billionaires mentioned above is that each worker contributes to this fund through taxes withdrawn from their periodic paychecks. Employers contribute matching funds for each worker. Those who are self-employed pay double the amount annually. This is not a free giveaway; workers earn these payments through their years of work. The funds are sent to the Old Age and Survivors Insurance and Disability Trust funds.  As of the end of 2023, those funds were worth $2.8 Trillion. But these funds are expected to run out in another decade or so as those paying into the system are not sustaining the costs of the increasing numbers drawing benefits from it. That number and the longer life spans for retirees are making the future less secure for retirees.

As an example, when Social Security first started paying benefits in 1940, the average life expectancy was 61 years. Benefits did not start until age 62. By 2023, that number increased to an average of approximately 79 years. (Since women traditionally live longer than men, that number is slightly higher for them; although recent stats show that men are decreasing in life expectancy to 73 years, a major decline.) So the system needs definitely to undergo review. Many think, that in ten years monthly checks must decrease to avoid insolvency. Another option is to increase the salary cap floor, as earnings are currently only calculated from the first $168,000 of income. That number will increase slightly in 2025 to $176,000.

That said, the current weekly salary for American workers reported by the Bureau of Labor Statistics for the third quarter of this year, averaged, is $1,165.00 for men, and slightly less for women at $1054.00. The numbers for minorities were even lower. These numbers translate into annual median wages of approximately $60,000 a year. There were also regional differences as the minimum wage level varies across the country. If an average salary is queried, that would be about $68,000.

These are the facts. This is the reality that most Americans live with. I started working at age 14 as a page in my local library. I stopped working in my seventies, with times out only for advanced education, childbirth, and subsequent care.

These maga millionaires claiming to be able to find trillions to cut from Federal spending have no understanding of the system or its promise to workers, judging from some of their recent statements.

From reporting by The Hill

“The pair, who were named co-chairs of the panel last week, laid out their plans for the “Department of Government Efficiency” (DOGE) in a Wall Street Journal op-ed. 

“The two of us will advise DOGE at every step to pursue three major kinds of reform: regulatory rescissions, administrative reductions, and cost savings,” they wrote. “We will focus particularly on driving change through executive action based on existing legislation rather than by passing new laws.” :

 

As reported by MSN

“In an interview with American computer scientist and podcaster, Lex Fridman, Ramaswamy said, “In there on Day 1, anybody in the federal bureaucracy who's not elected, whose social security number ends in an odd number, you're out, if it ends in an even number, you are in. There’s a 50 percent cut right there. Of those who remain, if your social security number starts in an even number, you're in, and if it starts with an odd number, you're out. That's a 75 percent reduction."

(Vivek may not realize that the first three numbers of an SSN referred to the area of the country where the initial application was made until 2011; it is now a random number, so it might have a disproportionate impact on the more populous areas of the country. He also may not understand that, since Civil Service applications give a weighted preference in hiring to veterans, they also would be severely impacted if his ideas were adopted.)

The New York Times noted in an opinion column by Peter Coy:

“I doubt if a C.E.O. or anyone outside of government has the attention span or the interest to truly go into the weeds,” Brian Riedl, a senior fellow at the Manhattan Institute, told me. Riedl worked for six years as chief economist to former Senator Rob Portman, Republican of Ohio.

Dan Lips, the head of policy at the Foundation for American Innovation, who was a Senate Republican staffer from 2011 to 2019, told me that “having very animated, high-profile leaders looking at these issues with a fresh perspective will be helpful.” But Lips recommended that rather than start from scratch, Musk, and Ramaswamy should draw on the detailed work on improving efficiency that has already been done, including by the Government Accountability Office, the inspectors general in each department and various congressional committees.

The Government Accountability Office in particular already does a lot of what Musk and Ramaswamy have in mind, except with the advantage of deep institutional knowledge. By its own accounting, it has produced benefits of $123 for every dollar put into it over the past six years on average.

Musk and Ramaswamy have lost some credibility with potential allies by lobbying for ideas that are clearly impossible, such as ditching three-quarters of the federal workforce or, as Musk has floated, cutting $2 trillion out of the federal government’s nearly $7 trillion budget. (That would be more than everything the government spends on stuff other than defense, interest and transfer payments such as Medicare and Social Security.)

Fed.pay.org  reports that there are approximately 1,402,000 people employed by the Federal government across 365 agencies. The average salary is around $80,000, and benefits add more. The costs are about $112.61 billion annually. So, if these geniuses cut this number of employees in half, what might this loss of jobs do to the economy? What would happen to the Social Security Trust fund if it lost 50% of the expected federal worker contributions it now receives? Where would alternative employment appear?

So, hang onto your hats folks, the weather ahead promises to be stormy! When these yokels get started you have to know that Medicare is also definitely in their sights. And, in this, they will have help from the kooky anti-vaxxer, Robert F. Kennedy Jr, if he gets confirmed, and the weird Dr. Mehmet Oz of supplement and crudities fame. Oz admits to being worth between 100-400 million dollars. What could possibly go wrong? That is a topic for another week.

Well, at least Matt Gaetz is out of the picture as he read the writing on the wall from Republicans that he could not get enough votes. This was compounded by leaks from testimony given and findings about the thousands of dollars he spent on “pay for sex” transactions. Stay tuned as Cabinet positions are more likely to be drawn from Central Casting, the pages of Variety, the entertainment publication, or Fox TV personalities, than from experienced academics or accomplished business professionals. Instead of the ‘best and the brightest’, we are presented with some of the ‘worst and the weirdest’ nominees this time!

And. DJT, who still has not signed the transition agreement, is raising private funds (from undisclosed donors, just what is he promising them?) to pay for the transition and does not want his nominees to be vetted by the FBI. What else is he hiding? Have the missing funds from his inauguration ever been accounted for? I hope that President Biden would order the FBI to do these background checks anyway, in the interests of national security or something.

Finally, as tallies continue, it is obvious that he does not have a mandate as his share of the popular vote has fallen to under 50% and Harris edges closer to within 1.5% of his total. Contrary to his campaign claims, this election was not a landslide. Popular vote vs. the Electoral College remains a debate for another day.

Still disavowing the 2025 report, DJT continues to lie, even as he adds its authors to his administration.

Anyway, Happy Thanksgiving! It seems that the turkeys here are not just found at the dinner tables.

Til next week-Peace!