Biden’s Budget Is an Assault on Social Security

High taxes and crushing regulations will starve entitlement programs into insolvency

By Casey B. Mulligan. Excerpts:

"It’s no coincidence that real wages have fallen during his administration while real investment returns have turned negative. Retirement savings plans have lost $4 trillion in value since Mr. Biden’s inauguration"

"degrowth policies since 2020 will cumulatively reduce Medicare and Social Security tax revenue by at least $400 billion—and perhaps as much as $900 billion. The tax base will shrink even more if Mr. Biden succeeds in levying higher wealth and business taxes."

"Mr. Biden’s insurance, regulatory and tax policies as implemented will eventually combine to reduce the nation’s labor income by 5% to 6.5%, with an additional reduction in the long term due to education policies in blue states. In two years under the Biden administration, the labor market is already falling short. Real employee compensation per adult—which reflects the fraction of adults working, the number of hours they work, and the inflation-adjusted cash and fringe benefits they receive per hour of work—is 3.3% below the pre-pandemic trend."

"even if the Biden economy had attained 2% annualized growth per adult from the first quarter of 2021—a tepid rate for a normal recovery—real compensation per adult would be 2.5% above where it is now."

"remote-learning policies will reduce labor income nationally by almost 0.6% during the working lives of all students enrolled in K-12 education during the 2020-21 school year. For context, 0.6% of current Medicare and Social Security tax revenue would be $10 billion a year. Because those earnings losses—47 years’ worth for each student after reaching normal working age—are in the distant future, I discount them to the present using a 6% real annual rate. By this measure, remote-learning policies reduced prospective Medicare and Social Security tax revenue by $118 billion in present value."