“We’re cutting taxes, we’re going to grow the economy. It’s going to grow at a record rate,” Trump said.
Wallace pressed him, noting that “that’s not going to help on entitlements.”
“No! It’s going to totally help you,” Trump shot back.
The GOP nominee then pivoted to a promise to “repeal and replace” Obamacare, a law that used Medicare savings to pay for coverage expansion, but otherwise does not affect Social Security or Medicare.
“It’s destroying our country. It’s destroying our businesses ― our small businesses and our big businesses,” Trump said of the landmark health care reform law.
On the campaign trail, Trump has promised he will not cut Social Security benefits, which he claimed he can pay for by cracking down on fraud. (In fact, the program rarely overpays people, so the savings from antifraud measures would likely be sparse.)
Hillary Clinton, for her part, stuck to her promise not to cut benefits, and use additional revenue from raising taxes on wealthier Americans to increase Social Security payments for vulnerable groups.
“I am on record as saying that we need to put more money in the Social Security trust fund,” Clinton said. “That is part of my commitment to raise taxes on the wealthy. My Social Security contribution will go up, as will Donald’s ― assuming he can’t figure out how to get out of it.”
(It was that remark that prompted Trump to interject, “Such a nasty woman.”)
Clinton added that one of the revenue options she’s considering is raising the cap on earnings taxed for Social Security. This year, Americans only have to pay into Social Security on the first $118,500 they earn.
“I will not cut benefits. I want to enhance benefits for low-income workers and for women, who have been disadvantaged by the Social Security system,” she said. “But what Donald is proposing with these massive tax cuts will result in a $20 trillion additional national debt. That will have dire consequences for Social Security and Medicare.”
Of course, Clinton is likely aware that Americans of all political backgrounds and generations oppose cutting Social Security benefits.
Clinton also noted that the Affordable Care Act, known as Obamacare, extended Medicare’s solvency by several years.
“If he repeals it, our Medicare problem gets worse,” Clinton concluded.
Wallace’s question for the candidates ― “Will you consider a grand bargain, a deal, that includes both tax increases and benefit cuts to try to save both programs?” ― suggests he considers it a given that the proverbial “grand bargain” on Social Security and Medicare, which eluded President Barack Obama, remains a desirable policy goal.
Clinton successfully navigated Wallace’s question without disappointing her progressive supporters who pushed her to rule out Social Security cuts in February. But she has not always bucked the elite consensus that a “grand bargain” is necessary to reform major social insurance programs. In a 2013 speech to Morgan Stanley, Clinton called the Bowles-Simpson plan, the archetypal bipartisan “grand bargain,” was the “right framework” for debt reduction.
Considering that Social Security’s shortfall remains 18 years away and can easily be solved through revenue increases alone, many progressives argue that focusing exclusively on the program’s funding gap is a wrongheaded premise.
In fact, from the moment Wallace announced the debate topics last week, progressive supporters of Social Security groaned in disappointment.
Social Security Works, a nonprofit that fights for expanding Social Security, warned in a statement that Wallace would “stack the deck against Social Security.”
Rather than discuss “Social Security” or “retirement income policy,” Wallace revealed that he would be asking about “debt and entitlements.” That framing for a conversation about Social Security and Medicare is firmly on the conservative side of spectrum, because it casts the programs purely as a fiscal challenges rather than deeply important forms of social insurance.
Nobel Prize-winning economist and New York Times columnist Paul Krugman slammed Wallace for his line of questioning, writing in a blog post that the moderator was “pretty bad on fiscal issues.”
“Federal debt simply isn’t a pressing issue; there is no possible reason to make a big deal about it while neglecting climate change, where every year that action is delayed makes the problem harder to solve,” Krugman wrote.
By contrast, fiscal conservatives rejoiced. The Peter G. Peterson Foundation, a private equity billionaire-backed group fighting for austerity policies, applauded the question in a statement, noting that the “national debt is a primary topic ... for good reason.”
This story has been updated with a quote from Paul Krugman.