Presidential Preview: Social spending

In advance of the 2024 presidential election, The Chronicle is breaking down each candidate’s stance on priority issues, examining their platform and political history to keep voters in the Duke and Durham community informed. This week, we take a look at some of the largest federal social spending program:

With an increasing national debt and popular programs covering millions of Americans facing the threat of insolvency, the next president will likely be charged with determining the future of Social Security, Medicaid and other major federal welfare programs.

Vice President Kamala Harris’ and former President Donald Trump’s agendas and records are highly divergent. The Democratic nominee is largely in favor of expanding social spending and enacting new programs, while the Republican nominee has long been a proponent of cutting welfare funding.

Here’s what you should know about major U.S. social spending programs, their current funding dilemma and the candidates’ approaches to social welfare spending.

What are the largest programs?

The U.S. social safety net is a vast, complex patchwork of programs providing benefits to populations often at risk of financial instability. Social Security and Medicaid, for example, provide benefits almost exclusively to Americans age 65 and older, while the Supplemental Nutrition Assistance Program (SNAP) — commonly known as food stamps — unemployment insurance and other programs provide assistance to low-income individuals and families.

Social Security consists of payments benefiting retired Americans over 62 years old, although some, such as those with certain disabilities, may be eligible at a younger age. Eligibility standards for full benefits are tighter for Americans born after 1943, starting at 66 years old for those born from 1943 to 1954 and gradually increasing to 67 years old for those born after 1960. Benefits can also vary based on a host of other factors, such as disability or survivor benefits for spouses.

Medicare provides health insurance to Americans over 65 years old, although advanced coverage options exist for those with certain disabilities and health conditions. The program currently covers 67 million Americans, with beneficiary payments totaling $839 billion in 2023 from $1 trillion in funding. This figure has increased from $582.9 billion in 2013 and $221.8 billion in 2000, largely due to growing enrollment from an aging population, the rising cost of health care and more service usage.

The Child Tax Credit — which allows individuals earning up to $200,000 with children under 17 to save up to $2,000  — was temporarily expanded during the COVID-19 pandemic until December 2021. The CTC currently benefits 40 million families. Proposals to renew the expansion have since failed in Congress, with the most recent bill passing in the House of Representatives by a 357-70 vote but failing in the Senate 48-44.

The funding problem

Protecting Medicare and Social Security became a campaign issue well before the presidential race was in full swing. During the 2023 debt ceiling crisis, President Joe Biden promised to protect Social Security and Medicare after some Republicans proposed cutting benefits to reduce spending.

Entitlement programs — particularly Medicaid, Medicare and Social Security — are the largest contributors to a growing national debt. Besides being the three largest federal social spending programs, they are also mandatory spending programs, meaning their funding is required under federal law. With the national debt measuring around $35.8 trillion in 2024, and many of federal social spending programs facing cost challenges, tough choices on social spending could increasingly become a reality.

According to the Social Security Administration, the program’s trust fund is expected to run out of money in 2035.

Arguably the largest problem the program faces is funding. Payroll tax revenue has been insufficient to fulfill the program’s annual obligations, putting significant financial stress on its trust fund. With an aging population, leaving fewer taxpayers in the workforce responsible for supporting a larger pool of Social Security beneficiaries, that problem is only expected to get worse.

Older Americans are highly dependent on the program — in 2023, over 40% of Americans over the age of 65 relied on Social Security for at least half of their income. The program also moved 27.6 million Americans out of poverty in 2023, the most of any federal welfare scheme.

Medicare may face a crisis of its own. Although costs aren’t expected to rise above revenue until 2030, Medicare will have to rely on its trust fund once this occurs. As a result, hospital insurance (Medicare Part A) is expected to go bankrupt in 2036. Though, Medicare Parts B and D, which cover beneficiaries’ medications and certain health care services, are not expected to face similar funding shortfalls in the future.

How to manage Medicaid and its costs has been a historical point of contention between Democrats and the GOP.

Republicans have previously advocated for converting Medicaid into a block grant program, wherein states would be given a fixed amount of funding and would have total authority to decide how to spend it. Democrats, on the other hand, have historically opposed devolution and gave states the option to expand Medicaid coverage eligibility under the Affordable Care Act. 

Where Americans stand

Social Security remains wildly popular, with 96% of Americans over 18-years-old considering it an “important government program” as of 2023. Roughly 79% of adults nationwide say benefits should not be reduced, and only 19% would support benefit cuts, according to a June Pew Research poll. Results were similar across partisan lines, with 77% of Republicans and 83% of Democrats surveyed saying benefits should not be reduced “in any way.”

Medicare’s approval rating stood at 80%, per a May poll of registered voters, with 90% of Democrats, 79% of independents and 72% of Republicans holding favorable views of the program. Broken down by age, Medicare’s approval stood highest among voters aged 65 and older at 87%, followed by those aged 18 to 29 at 85%.

The May poll also showed that 75% of registered voters approve of Medicaid, with 86% of Democratic voters, 77% of independent voters and 69% of Republican voters backing the program.

The CTC also enjoys widespread support, with 72% of adults supporting expanded eligibility among lower-income families and 57% in favor of indexing the credit to inflation according to an August Economist/YouGov poll.

Polling on other individual programs is somewhat sparse. However, according to a January 2023 YouGov poll, other large-scale social programs remain popular with the public — with 67% of Americans approved of SNAP, while 66% and 68% approved of unemployment benefits and WIC (the Special Supplemental Nutrition Program for Women, Infants and Children).

Donald Trump 

Trump has long supported cutting federal spending on social welfare programs, a stance in line with his party’s traditional views.

In his 2017 inaugural address, he promised to “get our people off of welfare and back to work — rebuilding our country with American hands and American labor.”

In 2018, Trump authorized states to impose work requirements for Medicaid eligibility for the first time and signed an executive order to strengthen work requirements for some federal programs, calling on cabinet departments to submit proposals for stricter standards.

That June, his administration announced a plan to merge the Education and Labor Departments, thereby consolidating programs affecting the labor force and shifting welfare programs — including SNAP — across different departments. The plan was criticized as harming low-income and working-class Americans.

Trump’s allies in Congress also quietly attempted sweeping welfare reform legislation that would have cut benefits for several programs, but were ultimately unsuccessful. Trump called on Congress to repeal $15 billion from welfare spending, nearly half of which would have come from CHIP, but the bill failed in the Senate a month after it was proposed.

Notably, Trump’s proposed budgets throughout his term included cuts to Medicaid and other large welfare programs.

His administration’s proposal for FY 2018 would have cut $1.74 trillion from the social safety net, including $800 billion from Medicaid. Some of the further cuts, work requirements and other constraints proposed included cuts to Temporary Assistance to Needy Families (TANF), Social Security Disability Insurance, SNAP and CHIP.

Trump’s policy advisers argued that the cuts were necessary to balance the budget and reduce the national debt. A 2017 analysis by the New York Times found that the budget would have cut $23.11 billion from Social Security, $68.2 billion from Medicare, $627 billion from Medicaid and $193.6 billion from food stamps over 10 years. The budget would also have cut $43.5 billion from veterans’ income security and $11.1 billion from WIC while increasing CHIP funding by $13.9 billion.

His FY 2021 budget included $1 trillion in budget cuts to Medicaid and ACA programs over 10 years, arguing that $152 billion would be saved from imposing new work requirements. The proposal estimated total savings over 10 years at $844 billion.

Under those proposed cuts, disability benefits would have been cut by $75 billion. Medicare funding would have also been cut, largely by cutting reimbursement payments to medical professionals and pushing seniors to see nurses and physician’s assistants for primary care needs instead of physicians. Additionally, the budget called for a $21 billion reduction in block grants for TANF and a reform of food stamps that would save $182 billion over 10 years.

Arguably the only exception to Trump’s welfare policies was the expansion of the CTC in the 2017 Tax Cuts and Jobs Act, his flagship economic bill. The TCJA expanded the benefit to $2,000, though the policy was criticized for adding to the national debt.

Although the former president has vowed to “protect” Social Security and Medicare from cuts and his 2024 platform includes a promise not to reduce coverage by raising the retirement age, experts say his economic plans may cause Social Security’s trust fund to be depleted earlier.

The Committee for a Responsible Federal Budget projected last week that Trump’s policies would increase the program’s cash shortfall by $2.3 trillion by 2035 and result in a 33% “across-the-board benefit cut” in 2035, up from the 23% required by existing federal law.

The nonpartisan group cited his proposals to end taxes on overtime and tips, increase tariffs and deport illegal immigrants, arguing they would reduce payroll tax revenue used to fund payments. Trump’s promise to eliminate taxes on Social Security payments would eliminate another source of the program’s revenue.

Trump’s running mate, Ohio Sen. J.D. Vance, has said he would support expanding the Child Tax Credit to $5,000. Trump has said he supports the credit itself but has not indicated whether he would make any changes to it.

Kamala Harris

Harris has long been an advocate for expanding social welfare programs and enacting new legislation to raise tax credits and increase spending on education and childcare.

The Democratic nominee’s 2020 presidential campaign backed expanded social spending, including Medicare for All with a 10-year transition period. Her platform emphasized childcare, incorporating six months of paid family and medical leave, universal pre-K and preschool, increased funding for Head Start and expanding the CTC and the Earned Income Tax Credit (EITC). She also backed an expansion of SNAP that would have increased benefits to children by 27%.

While in the Senate, Harris introduced several social welfare bills, including the Mental Health Professionals Workforce Shortage Loan Repayment Act, which would have repaid some educational loan debt for mental health professionals who agreed to work in areas with few practicing professionals. She also co-sponsored a bill to raise the federal minimum wage to $15 per hour and the LIFT the Middle Class Act, which proposed a tax credit of up to $3,000 for low and middle-income workers.

The Biden-Harris ticket’s 2020 platform backed a “public option” for health care that would function similarly to Medicare but compete with private insurance, along with an expansion of Medicare and Medicaid.

The Biden-Harris administration’s Build Back Better plan featured an extensive expansion of the social safety net, including an extension of the expanded CTC and EITC, Medicaid coverage for hearing benefits, universal preschool and Medicaid coverage under the ACA to states that had not expanded coverage.

Although the Build Back Better Act failed in the Senate, the Inflation Reduction Act of 2022 capped out-of-pocket costs for Medicare Part D beneficiaries at $2,000. In North Carolina, the law’s caps are expected to benefit 1.6 million people.

An expanded CTC and EITC has featured prominently in the 2024 Harris-Walz platform. Harris has promised to expand the CTC to up to $3,600, which would benefit up to 100 million Americans, and to expand the EITC the same way it was in the American Rescue Plan.

Harris has also pledged to protect Social Security and Medicare from cuts by increasing taxes on corporations and the ultra-wealthy.

Other notable social welfare provisions in her platform include a $25,000 down payment assistance for first-time homebuyers and paid family and medical leave.

An August analysis by the University of Pennsylvania showed that Harris’ taxation and spending plans, including new social welfare spending, would further increase the national debt by $1.2 trillion over 10 years. The CRFB’s estimate projected that from 2026 to 2035, Harris’ economic plan would add $3.9 trillion to the national debt.

Other candidates

Libertarian nominee Chase Oliver’s platform states that he will “end” Social Security, calling the program “failing” and a “Ponzi scheme” He also promises to end “other social programs” by phasing them out over time, “allow[ing] the market to find better solutions.”

Independent candidate Cornel West is pushing for a massive expansion to the social safety net, promising to “eradicate poverty,” enact universal basic income and raise the minimum wage to $27. Besides promising Medicare for All, his platform does not mention specific programs such as Social Security or CHIP.

Green Party nominee Jill Stein has pledged to “guarantee” free childcare and apply the payroll tax to all income to fund Social Security. She supports Medicare for All and the cancellation of all medical debt.

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