During a House Budget Committee hearing last week, Rep. Brendan Boyle (D-PA) questioned witnesses about Medicare & Social Security solvency and immigration.
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NewsTranscript
00:00a ranking member for his Q&A. Thank you. And Mr. Chairman, before I start my questions,
00:08I ask unanimous consent to submit a statement from Max Richtman, the President and CEO of the
00:14National Committee to Preserve Social Security and Medicare, that the statement be submitted
00:20into the record. Without objection, so ordered. Thank you. So just a few different points that
00:26I want to kind of drill down on first with this conversation about 2033 versus 2035.
00:34Some of the confusion might be that the projections from CBO just a couple years ago
00:39were that we had until 2033. We've gotten good news of late, both when it comes to Social Security
00:46and Medicare, that actually we have a couple more years of full solvency, 2035 Social Security,
00:542036 when it comes to Medicare. That is because of stronger economic growth than was projected
01:03just a couple years ago. So did you want to speak about that and draw the link between the two and
01:09why it is that now we do have until 2035 and 2036 respectively instead of a date that is closer?
01:18I think over that time period, the improvement we've had is largely because of the economy.
01:25There's been improvements in productivity and the labor force that has brought in more revenue
01:29and it has resulted in an increase in cost and also employment rates have been very strong. And
01:35one of the things that's been really good is, as mentioned already, with the retirement of the
01:40baby boom generation upon us, elders are working to higher ages now, which is a very, very positive
01:49effect. So it's not just in Congress. I don't know if you have anything you wanted to add to that.
01:56There's a very similar story on the Medicare H.I. Trust Fund as well. Just four years ago,
02:03the trustees were projecting that the H.I. Trust Fund would become depleted in 2026.
02:10And as you noted in the 2024 report, the depletion date is now 10 years later, 2036.
02:17That is a dramatic change and there has been a dramatic change in the underlying finances of
02:22the program, both on the income and on the expenditure side. On the expenditure side,
02:29the projections from 2020 to 2036, the point of where we're now projecting H.I. depletion date,
02:37expenditures are now projected to be 3.2 percent lower than what they were just four years ago in
02:43the 2020 trustees report. At the same time, the income projections are up 11.6 percent.
02:50And so there's just a dramatic change in the income projections coming into the H.I. Trust Fund.
02:55Yes, quickly, because I want to get to my next topic.
02:59If I could just add, actually, the Social Security Combined Trust Fund reserve depletion date has
03:04been projected within the range of 2033 and 2035 for the last 13 years. We're at the top end of
03:10that now, so it is more positive, but it's been a very stable projection.
03:14Well, whether it's Medicare or Social Security, obviously, the good news of this strong economy,
03:21obviously, helping us and giving us more time to grapple with this issue here in Congress.
03:26Now, let me transition to immigration. Very simply, does immigration help or hurt
03:35the financing of Social Security and Medicare?
03:42Well, let me start, at least. Immigration, typically, is for people who are in their
03:4720s to maybe late 30s. So generally speaking, when people enter the country as immigrants,
03:53along, in many cases, with children, but people of working age tend to be of younger age.
03:58Therefore, when they come to the country, they tend to come here for economic opportunity
04:04and enter the labor force, and that's very much a positive. That actually helps
04:09with having more revenue coming in. Eventually, they will develop insured status and be able to
04:14get benefits. Although not necessarily all of them. We will have some people who are actually
04:18paying, literally paying into the system, but will actually never receive benefits decades later.
04:24Absolutely, and another positive is that people enter in their 20s, 30s, etc. as immigrants.
04:30They may have children along the way, and that adds to the burst that we have in our country
04:34that helps solve some of our problem of the low birth rates.
04:36Especially given that every country in the Western world is challenged from a birth rate
04:42perspective, and will increasingly be challenged over the next 40 to 50 years.
04:48We discussed this separately, it turns out. I mentioned this in my opening remarks,
04:53and you also touched on it as well. I just want to make it again crystal clear for everyone.
04:59Social Security does not add one dime to our national debt. Can you just briefly
05:06again explain why that is?
05:08Well, that's exactly right. Social Security does not have any authority in the law to have any
05:14borrowing. Again, the money that goes into the trust funds is dedicated just to go in the trust
05:20funds, and it can be used only for one purpose, for paying expenses of Social Security. It can't
05:25be used for any other reason. This is because of the laws that you all have passed. So, again,
05:32any money that comes into the trust funds and builds up reserves that we have now, the $2.8
05:37trillion, actually helps cover some of the roughly $35 trillion of overall debt we have.
05:42If we spend on the trust funds, that doesn't increase the total debt subject to limit.
05:47It just simply means that it gets shifted from a little bit less of it, or over time,
05:51less of it being covered by the monies that are owed by the general fund of the treasury
05:57to future beneficiaries, to more of it being covered by borrowing directly from the public.
06:04Both of those borrowings are both in the public interest, obviously.
06:09Thank you, and I'll yield back.
06:11You still have three more minutes, I think.
06:13No, that's a joke. Okay, all right. The gentleman yields. The gentleman from Wisconsin,
06:17Mr. Grothman, is recognized. I thought you were not sitting in the chair.