Paul Krugman: House Republicans will risk a 'financial crisis' to 'slash Social Security and Medicare'

Filmmaker/activist Michael Moore is fond of saying: If you like Social Security and Medicare, thank a liberal. It’s a sentiment that liberal economist and veteran New York Times opinion columnist Paul Krugman shares, as he has long been a passionate defender of Social Security (a product of President Franklin Delano Roosevelt’s New Deal of the 1930s) as well as Medicare and Medicaid (two products of President Lyndon B. Johnson’s Great Society, which was a 1960s expansion of the New Deal).

In a scathing column published on January 12, Krugman warns that the GOP’s new majority in the U.S. House of Representatives is determined to “slash” Social Security and Medicare and is willing to risk a “financial crisis” in order to do it.

“The Republicans who now control the House will soon try to slash Social Security and Medicare,” Krugman writes. “They plan to achieve this by holding the economy hostage, threatening to create a financial crisis by refusing to raise the federal debt ceiling. The interesting questions are why they want to do this, given that it appears politically suicidal, and how Democrats will respond.”

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CNN, Krugman notes, has “obtained a screenshot of a slide presented at a closed-door Republican meeting” held on Tuesday, January 10. And the slide outlines some things that Republicans have in mind economically.

“The first bullet point calls for balancing the budget within 10 years, which is mathematically impossible without deep cuts to Social Security, Medicare and Medicaid,” Krugman explains. “The second calls for reforms to ‘mandatory spending’ — which is budget-speak for those same programs. And the final point calls for refusing to raise the debt limit unless these demands are met. So, the plan isn’t a mystery. I would add only that if Republicans try to assure currently retired Americans that their benefits wouldn’t be affected, this promise isn’t feasible — not if they’re serious about balancing the budget within a decade.”

If House Republicans vote to butcher Social Security, Medicare and Medicaid, there are two potential obstacles: (1) the U.S. Senate — where Democrats still have a majority — and (2) President Joe Biden, who has the power to veto bills he doesn’t like. But Krugman fears that House Republicans would be willing to use the debt ceiling to “blackmail” Biden. Many economists are warning that if the United States fails to raise the debt ceiling and defaults on its debt obligations, it would trigger a major financial crisis.

“All indications are that at some point this year, the Biden Administration will have to deal with a full-scale effort at economic blackmail, a threat to blow up the economy unless the safety net is shredded,” Krugman writes. “And I worry that Democrats still aren’t taking that threat seriously enough.”

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