A senior U.S. Treasury official warned Tuesday that cuts to Social Security and Medicare would “decimate” the standard of living for American retirees.
“These programs are the cornerstone of the American retirement system, and it is difficult to imagine either program sustaining substantial cuts in resources without dramatically impacting millions of beneficiaries,” Ben Harris, the Treasury’s assistant secretary for Economic Policy, said at an event in Washington.
While Harris didn’t mention the looming political battle, his remarks came as GOP lawmakers and the Biden administration are headed for a showdown over the government’s legal borrowing limit. Republicans have said they might demand large spending cuts—including to Social Security and Medicare, the retirement and health programs for the elderly and disabled—in exchange for raising the debt ceiling.
“Roughly half of retirement-age households depend on Social Security benefits for all or almost all of their income,” Harris said. “Cuts to Social Security would decimate their standard of living.”
He said Medicare carried equal weight and that “any marked cuts to the program would undoubtedly mean undue suffering for the beneficiaries who depend on the program for critical health care.”
President Joe Biden said on Nov. 10 that he’s willing to “work with Republicans,” but wouldn’t accept cuts to Social Security and Medicare.
Harris’s comments, delivered at an event hosted by the Brookings Institution, were part of a wider speech on how conditions for US retirees have deteriorated in recent decades.
Almost 40% of those born in the 1980s won’t be able to maintain their pre-retirement standards of living into their 70s, he said, citing data from the Urban Institute.
This article was provided by Bloomberg News.