Dodging the Incoming Economic Roundhouse w/ Robert Moffit

Summary

Podcast Summary: The Tony Kinnett Cast - "Dodging the Incoming Economic Roundhouse w/ Robert Moffit"

Episode Overview

In the July 27, 2025 episode of The Tony Kinnett Cast, host Tony Kinnett engages in a pivotal discussion with Robert Moffit, Senior Research Fellow at the Heritage Foundation and Editor of Modernizing Medicare. The conversation delves deep into the pressing issues surrounding federal entitlements, particularly Medicare and Social Security, and the looming economic challenges they present. Moffit provides insightful analysis on the unsustainable trajectory of these programs and offers potential pathways for reform to prevent a fiscal catastrophe.

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1. The Scale of Federal Entitlements

Tony Kinnett (B):
"Congress actually doesn't vote on Medicare spending every year. It's automatic. It is what is called mandatory spending or automatic spending... it's about 50% of the entire federal budget is on automatic pilot." ([01:25])

Robert Moffit (A):
Highlights that Medicare and Social Security, along with other entitlements, constitute nearly half of the federal budget. This significant portion operates without annual Congressional oversight, making substantial reforms challenging.

Key Points:

• Mandatory Spending: Medicare and Social Security are classified as mandatory or automatic spending, meaning their funding isn't subject to the annual appropriations process.
• Budget Impact: Approximately 50% of the federal budget is allocated to these entitlements, overshadowing other areas like defense or foreign aid, which together comprise about 15%.

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2. The Imminent Fiscal Crisis

Robert Moffit (A):
"If we do not get a control on this, we're looking at a fiscal crisis. Now, what that means is a catastrophe... Interest rates skyrocket... massive unemployment." ([02:57])

Tony Kinnett (B):
Uses the analogy of a "massive hurtling train" heading towards a cliff to illustrate the uncontrollable growth of entitlement spending and its potential consequences. ([02:34])

Key Points:

• Debt and Deficits: Unchecked entitlement spending is driving national debt and annual deficits to dangerous levels.
• Economic Catastrophe: Without intervention, the U.S. could face skyrocketing interest rates, hindered business growth, unaffordable housing and automobiles, and significant unemployment.

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3. Political Barriers to Reform

Robert Moffit (A):
"President Trump saying, no matter what happens, I'm not going to touch Medicare, I'm not going to touch Social Security." ([02:57])

Key Points:

• Political Sensitivity: Medicare and Social Security are often referred to as the "third rail" of American politics, meaning touching them is politically perilous.
• Public Perception: Senior citizens, primary beneficiaries of these programs, resist discussions on reforms, fearing loss of benefits.
• Legislative Inaction: Despite warnings from authoritative bodies like the Congressional Budget Office (CBO) and General Accounting Office (GAO), Congress remains stagnant due to political fears and public pushback.

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4. Historical Attempts at Entitlement Reform

Tony Kinnett (B):
Discusses President George W. Bush's efforts to privatize Social Security, aiming to involve the private sector in sustaining the program. ([04:52])

Robert Moffit (A):
"For example, what George Bush wanted to do... was not... privatizing all Social Security. His proposal was to allow people to invest in personal accounts." ([06:41])

Key Points:

• Privatization Efforts: Bush's approach sought to gradually introduce personal investment accounts into Social Security, promoting private sector involvement without entirely dismantling the existing system.
• Success Stories: Federal Employee Retirement Program's Thrift Savings Plan serves as a model, allowing federal employees to invest their retirement funds privately, demonstrating the feasibility and benefits of such reforms.
• Resistance and Misconceptions: Current political narratives, particularly from figures like Bernie Sanders, mischaracterize privatization efforts as schemes to benefit the wealthy, hindering bipartisan support.

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5. The Urgency of Addressing Medicare and Social Security

Robert Moffit (A):
"The Medicare trustees tell us that in a few years... in the year 2033 it will not... no longer be solvent." ([10:01])

Tony Kinnett (B):
Expresses concern over the advancing timelines for insolvency, emphasizing that each revision pushes the crisis closer. ([11:11])

Key Points:

• Solvency Concerns: Medicare alone consumes 16% of federal income taxes as of last year, projected to rise to 28% by 2033. Such growth threatens the program's sustainability.
• Generational Impact: The financial burden isn't isolated to current retirees; Generation X and younger cohorts will inherit the fiscal challenges, making reforms imperative across generations.
• No Impact on Current Beneficiaries: Proposed reforms aim to adjust future payouts and funding mechanisms without reducing existing benefits, ensuring that current retirees remain unaffected.

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6. Proposed Solutions and Pathways to Reform

Robert Moffit (A):
"We could do the same thing with Social Security. We're not talking about entirely, but giving young people an opportunity to take that money, to invest it, you know, in an index fund." ([08:56])

Key Points:

• Gradual Adjustments: Emphasizes the need for phased reforms, such as gradually increasing the retirement age and introducing investment options for younger workers.
• Private Investment Opportunities: Advocates for allowing a portion of Social Security contributions to be invested in private, safe index funds, fostering personal wealth growth without jeopardizing current benefits.
• Building on Successes: Leveraging successful models like the Thrift Savings Plan to expand private investment options within entitlement programs.

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7. The Consequences of Inaction

Robert Moffit (A):
"This is not sustainable. This is crazy. And again, it's the Medicare trustees, it's not the Heritage Foundation that's selling you this. We got to get very serious about this." ([12:12])

Key Points:

• Crowding Out Other Priorities: With Medicare projected to consume an increasing share of federal revenues, funding for other essential government functions could be severely restricted.
• Economic Downturn: Failure to reform entitlements could lead to diminished economic opportunities, higher unemployment rates, and overall economic instability.

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Conclusion

The episode underscores the critical need for bipartisan action to reform Medicare and Social Security to ensure their long-term sustainability. Robert Moffit stresses that while the task is politically challenging, especially given public resistance and entrenched political stances, the alternative poses a dire economic future. By implementing gradual, thoughtful reforms that maintain current benefits while introducing efficiencies and private investment opportunities, the U.S. can avert the impending fiscal crisis and secure the well-being of future generations.

Notable Quotes:

• Robert Moffit (A):
  -"If we do not get a control on this, we're looking at a fiscal crisis." ([02:57])
  -"Medicare alone... is going to pay for 28% of all federal income tax revenues by 2033." ([12:12])

• Tony Kinnett (B):
  -"There is no more time in the FCC clock for us either." ([13:27])

Timestamp Highlights:

• [01:25] - Discussion on the magnitude of mandatory spending in the federal budget.
• [02:34] - Analogy of entitlement spending as a train heading towards a cliff.
• [04:52] - Introduction of George W. Bush's Social Security privatization efforts.
• [06:41] - Comparison with federal retirement programs and successful investment plans.
• [10:01] - Medicare's projected insolvency and its implications.
• [12:12] - Urgent call to address the unsustainable growth of Medicare funding.

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This comprehensive discussion between Tony Kinnett and Robert Moffit provides listeners with a clear understanding of the fiscal challenges posed by entitlements and the urgent need for prudent reforms. By highlighting historical efforts, current projections, and viable solutions, the episode serves as a crucial call to action for policymakers and the public alike.

Transcript

[A]

An official message from Medicare. I'm saving money on my Medicare prescriptions. Maybe you can save, too. See if you qualify for Medicare's extra help. It pays. To find out, go to ssa.gov extrahelp.

[B]

Paid for by the US Department of.

[A]

Health and Human Services.

[B]

With Tony kenned cast on 93 WIBC. Hey, hey, welcome back to the Tony Kennedcast here on the Daily Signal, nationally syndicated, first on 93 WIBC. When you're going to talk out of your rear end, they give you a job in broadcasting. However, if you're really good at it, you get promoted to the halls of Congress and you're put in charge of federal spending. And you know, that sends the entire country through entitlement spending into, well, perhaps insolvency, bankruptcy, defaulting and a lot of other very joyous and pleasant things. So we brought on c senior research fellow over from Heritage, editor of Modernizing Medicare, Bob Moffett, the one and only on to talk about it. Bob, how's it going, man?

[A]

Oh, it's great, Tony. Great to be with you.

[B]

Well, it's great to be with you. I wish that it was as great as perhaps the weather is outside, but some of these spending packages and entitlements really have got the economy looking a bit nervous over the next decade.

[A]

Well, the most important thing for your listeners to recognize is that Congress actually doesn't vote on Medicare spending every year. It's automatic. It is what is called mandatory spending or automatic spending. So and it's about almost if you look at Social Security, Medicare, a lot of the other entitlements, it's what they call it's an automatic spending program. It's now about almost 50% of the entire federal budget is on automatic pilot. So they don't sit down every year and decide how much we're going to spend on Medicare or Social Security. It is set automatically according to formulas, and now it's about 50% of the spending. When they talk about cutting things like doge programs or foreign aid or getting rid of waste, fraud and abuse or even, you know, cutting back on defense spending, you're only talking about a universe of total spending that is about 15%. So all the big stuff is actually off. Off of the Congressional debate Forum, it's really quite remarkable.

[B]

If there is this massive hurtling train that, oh, by the way, there's no engineer for that, that route was programmed in automatically and you're stuck on the express train right off the cliff. What on God's green earth do we do as we Head towards the cliff itself. Because I'm not seeing anything about this in a lot of, you know, campaigns right now. I'm just see the train picking up speed.

[A]

Part of the problem is that because these programs are so big and because they affect so many people, even discussing improving it in some way frightens especially senior citizens on Social Security or Medicare. They don't want to hear it. And then you have, you know, President Trump saying, no matter what happens, I'm not going to touch Medicare, I'm not going to touch Social Security. Members of Congress are terrified of it. And going all the way back to the, to the 80s. You know, they used to call it the third rail of American politics. You touch it and you're dead. Well, that's the problem. It's a political problem. It's a perception problem. What the public doesn't understand is that if you do not get these programs on a more sustainable path, the consequences are really going to be quite terrible. And that is not something that is a product of, you know, propaganda from the Heritage foundation or the American Enterprise Institute. If you read the studies of the Congressional Budget Office, the General Accounting Office, and you listen to adults in the room, they are saying, we have got to get a handle on this because it's driving debt and it's driving very dangerous debt. It's driving annual deficits. And if CBO said it over and over again that if we do not get a control on this, we're looking at a fiscal crisis. Now, what that means is a catastrophe. Interest rates skyright, sky skyrocket. Businesses can't borrow. You can't buy a house, you can't buy a car because the interest rates are so crazy. And you see massive unemployment. And God knows we're talking about a catastrophe. So we got to get a handle on this. There are ways to do it, but we've got to start early rather than later. It's always got to be done gradually and effectively over time.

[B]

Well, and this is one of the things that of all of the historical political footnotes to bring out, this is something that President George W. Bush actually tried to bring forward here with his, his privatization of Social Security. Now, when you say George W. Bush today, a lot of people on the right immediately think Iraq war, and they, they, their hand goes immediately to either their chest or the smelling salts. And I hear you, I do. But just because I say the name George Bush doesn't mean you need to call an exorcist. Relax. This privatization scheme was not a Ponzi scheme like Social Security currently is, but it was more effectively a way to start getting out of this hole because the American economy was now actually helping grow Social Security. And then you could create a similar series of plans for Medicare and Medicaid so that the private economy was able to assist in these massive spending programs. And it also encouraged economic growth, because that's how these things are hinged. But if you say that today, then Bernie Sanders is going to be on television claiming that you want to give the billionaires all of the money. And that's going to be.

[A]

Yeah, I mean, it's. That's boob bait for the masses. I mean, it's absolute nonsense for the masses.

[B]

I love it.

[A]

And, you know, and the fact of the matter is, adults in Washington, including the guys on the left, really understand this. That's the thing that is so, so maddening about this, Tony, is that the folks on the other side of the aisle behind closed doors, in their cups after three or four drinks, will admit, you know, we got a problem here, guys. There's water in the mailroom of the Titanic. We got to think about what to do. And, you know, you're driving on the.

[B]

Wrong side of the road and it's rush hour. Come on.

[A]

Right? Let me give you an example, for example. And it's, it's, you know, you mentioned Social Security, by the way. What George Bush wanted to do is it was not, you know, privatizing all Social Security. His proposal was to allow people to invest in personal accounts. By the way, back in 1983, Ronald Reagan, one of our greatest presidents, my former boss, got together with Tip o' Neill and struck a deal. And the deal was we're going to give, you know, we're going to gradually raise the age of retirement for Social Security from 65 to 67. And just this past year, that is what happened. So it was a very gradual, painless change. They did something else. The federal employee health benefits, or, pardon me, the Federal Employee Retirement Program. What they agreed to was to give federal retirees an opportunity to. To take their, you know, retirement money or invest their retirement money in the private market. They call it the Thrift Savings Plan. It's a huge success. You can't talk to federal employees today about taking away their private, you know, Thrift Savings Plan without creating basically a war. These were tremendously successful entitlement reform. We could do the same thing with Social Security. We don't. We're not talking about entirely, but giving young people an opportunity to take that money, to invest it, you know, in a index fund, a safe index fund which would enable them to, you know, generate wealth over time. That's a huge benefit. That's not to touch. One thing that is dealing with retirees today. Not no benefit with at all, just new people coming in and giving them an opportunity to invest in a private retirement program with some of their Social Security tax money. That's not crazy.

[B]

It's just, it's essential. It's not crazy.

[A]

Done it.

[B]

Case in point. Case in point, mate. I think that I don't even want to touch. If you are in the process of taking Social Security, you want to take that, by all means, you go right ahead and do so. I am at the point in my life where I would genuinely rather, even though I have paid into Social Security, I would rather see something else done with my money from this point than have to rely on that system for me. You keep using it. You keep using Medicare the way you want. You keep using Medicaid the way if you're already taken on special, if you're a retiree right now, you're an older American, you go ahead, keep using it. But the younger generations of America need alternatives because they're needed from problem. Exactly. My money is already going into current withdrawals of Social Security. My goodness gracious, my kids and grandkids money is currently going into today's Medicare Medicaid funding. I can't, it's. We're not even at a point where I'm willing to hear some of the complaints at this point and the worries and the fear mongering, the pearl clutching as though we're going to leave 80 million elderly sitting outside in the cornfields to starve. I just, I just.

[A]

There is not one proposal, Tony. There is not one proposal that I know of that would affect current retirees, you know, that would basically deprive them of either their Social Security or Medicare benefits. Most of the changes are basically payment changes to make things more efficient and to give the younger people options that they do not have today, which is only fair. The most important thing for people to realize is that the adults, the General Accounting Office, the trustees of the Social Security Trust Fund and the trustees of the Medicare Trust Fund are telling us that in a few years these programs will not be able to pay their full benefits for Medicare if the year 2033 it will not no longer be solvent. And that means that senior citizens are going to get an 11% automatic cut in their hospital benefits right away. And year by year those cuts deepen. And so that's, that's a reality I have heard.

[B]

So it was again a couple years, 2037, then 2035, earlier this year, 2034. Now it's 2033 again. Not. Is it because people are making up these numbers? No, because the beast is growing. It is picking up speed. It has not reached terminal velocity. It is continuing to accelerate. And so by all means, look, if you want to be one of the crash test dummies who find out how fun it is to, to go from 60 to 0 in a Hyundai Sonata against a brick wall, by all means, you're free to do that. But you're going to be doing that alone. I do not want to go through that with my finances, with my family's finances, you know, with my parents, because those in Generation X are going to have to deal with this. This isn't just some discarded boomer issue that they can skate by. And Generation X can skate by. Nope. Generation X is also going to feel the pain of this. Boomers are going to feel the pain of this. Oh, I mean, this is, oh, it's, it is something that cannot, can not be ignored.

[A]

Well, I'll just give you an example. For example, for Medicare, just Medicare alone, right? Last year, 16%, listen to me, 16% of all federal income taxes, 16% went strictly to the Medicare program, all right? 16% of every federal income tax dollar just from Medicare, not talking about Medicaid, not talking about Social Security, just Medicare, all right? The Medicare trustees tell us that in the next 15 years that 28% of all federal dollars, all federal income tax revenues are going to go to pay for just Medicare. So Gen Z is not going to know what hit them. That's the freight train now that, you know, 28% of all federal income tax revenues going to one program, I mean, can you imagine the crowd out for all the other priorities that the federal government has? I mean, this is not sustainable. I mean, this is crazy. And again, it's the Medicare trustees, it's not the Heritage foundation that's selling you this. You know, we got to get very serious about this.

[B]

And there, again, this is not the kind of thing that you can again, just sweep under the rug. We, look, I love sweeping things under the rug. We all do. I mean, there are some of us who, if you can put it off, you know, you cannot go do the thing. It's a great, you know, it'll be someone else's issue later. It's something that since the end of the Cold War, we've become especially good at. And there's just no more, no more time anymore. And unfortunately, there's no more time in the FCC clock for us either. I'm also getting told by my producer that he calls us too, too much. We're too crotchety. And I love it. I give it a 10 out of 10. Bob Moffett, thank you so much for joining us. Really appreciate it. Editor of Modernizing Medicare, along with your senior research over at Heritage.

[A]

Love it.

[B]

Thank you so much.

[A]

It was a great, it's great being with you, Tony. Let's get together again.