CLARIFICATION: Paul’s office says that under his spending plan, Social Security will be exempt from cuts.
Conservative Sen. Rand Paul (R-Ky.) says he will force the Senate to vote this week on cutting total federal spending by 5 percent in each of the next two years, a proposal that could put popular programs such as Medicare, Medicaid and the Affordable Care Act under scrutiny.
Paul told reporters Tuesday that he would insist on a vote on his amendment in exchange for yielding back time on the Senate floor and giving leaders a chance to pass the debt-limit bill before the nation faces default next week.
Paul’s proposal, which he is calling a “conservative alternative” to the deal negotiated by President Biden and Speaker Kevin McCarthy (R-Calif.), poses an uncomfortable vote for Senate Republicans, one which it divides their conference.
A “no” vote opens GOP senators to criticism from conservatives who say that policymakers who exempt mandatory spending programs from reform are not serious about balancing the budget.
A “yes” vote risks alienating seniors who are worried about seeing their Medicare benefits cut or veterans who now receive more federal aid through mandatory spending through the PACT Act, which Congress passed last year.
A press release issued by Paul’s office Tuesday didn’t mention any exception for Social Security, and Paul while speaking with reporters that day also did not say Social Security would be exempted. After an initial version of this story was published, a spokesperson for Paul clarified that Social Security would be exempted.
“He was referring to on-budget spending, which excludes Social Security. His Penny Plan has never touched Social Security and it’s not allowed under the budget rules,” said Kelsey Cooper, referring to a past budget resolution sponsored by Paul to cut spending. “His Penny Plan has also never specified cuts to Medicare or any other program — it only gives topline numbers.”
When he spoke with reporters on Tuesday, Paul said his plan didn’t specify what programs Congress should cut to balance the budget in five years but that it would pressure lawmakers to look at a range of entitlement programs to achieve $545 billion in cuts over two years.
Asked whether he would reach his target of an annual 5 percent annual cut to all federal spending “by going through entitlements,” Paul responded: “We get there by putting a top line number of what it would take for the entire budget.”
“The committees would have to determine where the cuts would be. So there still would be for room for people to disagree and debate over exactly where they want the cuts but there would be an absolute topline number for the entire budget that over the next two years would be on the way to balance in five years,” he explained.
Social Security, Medicare, Medicaid, the Affordable Care Act and other health care programs account for nearly 50 percent of all spending. As a result, it is very difficult to balance the budget without touching such programs.
The Postal Service would also be exempt from his plan because along with Social Security it is classified as “off budget” spending, according to a Senate GOP aide.
Republicans have spent months running away from the accusation President Biden leveled at his “State of the Union” address that they want to cut Medicare.
If Paul were able to force a vote on his measure, they would find themselves having to vote on deep, across-the-board funding cuts that would likely affect a range of popular mandatory spending programs that are largely excluded from discussions about fiscal reform.
McCarthy took Social Security and Medicare cuts off the table early in the year. Some conservatives think that was a mistake.
Paul says that under his proposal, “there would be an absolute top-line number for the entire budget that over the next two years would be on its way to balance in five years.”
He says the McCarthy-Biden plan, which was approved in a bipartisan vote by the House on Wednesday night, falls short of making a meaningful dent in the federal deficit because “they’re only really looking at non-military discretionary” spending, which accounts for only 17 percent of the federal budget.
He argued that mandatory spending programs such as Social Security, Medicare and Medicaid are the biggest drivers of the debt.
“Mandatory spending is enormous. It’s over half of the spending every year; it’s going up at 5 percent a year,” Paul said.
“This specular deal that we’ve gotten tries to slow down spending on nonmilitary discretionary [spending,] so it does nothing,” he added with a dose of sarcasm.
Sen. Mike Lee (R-Utah), another outspoken critic of the Biden-McCarthy deal, says mandatory spending programs such as Social Security, Medicare and Medicaid do “have to be considered” as part of any meaningful deficit reduction deal.
Lee said a 5 percent, across-the-board reduction in federal spending will be criticized as “abrupt” or “draconian,” but he argues the consequences of letting the debt continue to grow by a couple trillion dollars every year are scary.
“If you want to talk at draconian and abrupt, look at what happens the moment our borrowing costs because of our profligate spending practices and because of interest rates and other factors … returns to the historical average of five percent,” he said.
“Our annual interest payments will very quickly go up well over a trillion dollars a year,” he warned. “It could easily exceed … our entire defense budget, and within a few years, we could see our total interest on debt outlays even coming to exceed our entire discretionary spending outlays.”
Sen. Mike Braun (R-Ind.), who will also vote against the debt limit bill, said federal spending as a percentage of the nation’s gross domestic product has gone into “the stratosphere.”
“You got to make those hard decisions like any real leader would do,” he said.
He says Social Security and Medicare, which he called “the drivers” of the debt, should be on the negotiating table “in terms of saving it.”
“Sooner or later, the programs that drive the structural deficits” such as Social Security, Medicare and Medicaid “will have to be looked at, and everybody knows that here,” Braun said.
Paul’s proposal is expected to pick up only around 20 votes, because many Senate Republicans don’t want to their favorite programs, in particular defense spending, to face steep cuts.
Biden and Senate Democrats have hammered the GOP relentlessly over the 12 Point Plan to Save America, which Sen. Rick Scott (R-Fla.) introduced last year and calls for a sunset of all federal legislation after a period of five years.
Scott said he never intended to sunset Medicare or Social Security, but that didn’t stop Democrats from using the plan as a bludgeon.
Scott amended it earlier this year to create specific exceptions for Social Security, Medicare, national security and veterans benefits.
Sen. Kevin Cramer (R-N.D.), who supports the debt limit deal, said Paul and other conservatives are correct that “you can’t balance the budget solely on discretionary spending.”
“I don’t see how, in the context of raising the debt ceiling, that you could have gotten anything more than Kevin McCarthy got,” Cramer said.
But he said McCarthy probably took Social Security and Medicare off the table too early in the debate.
Asked if that was a mistake, Cramer said, “yeah, I think it was.”
But he argued it might have been the right political move.
“You have this crazy political game going on where everybody out-Social Security the other people instead of being straight up and honest with the American public and say, ‘We won’t do any harm to anybody’s existing Social Security, and we’re going to have a forward-leaning solution,’” he said.
Cramer acknowledged Congress “missed the opportunity, so to speak” to make big fiscal reforms to Social Security and Medicare but he said the “threat of default is so big” that it limited how bold Republicans could be in making demands.
Senate Republican Leader Mitch McConnell (R-Ky.), who has said in the past that split party control of government provides a good opportunity to enact big, controversial reform, acknowledged Wednesday it’s been very tough to make any headway on Social Security or Medicare reforms.
“It’s been challenging over the years to get both sides to look at the very large picture,” McConnell told reporters.
But he praised the McCarthy-Biden deal for cutting spending, after Congress increased it by more than $2.7 trillion through two partisan reconciliation bills in 2021 and 2022, under Democratic control of Congress.
“At least we’re going in a different direction,” he said.
This story was updated at 12:23 a.m.