Wisconsin Senator Ron Johnson shared with listeners of "The Regular Joe Show" podcast recently that Social Security and Medicare benefits should be considered "discretionary funds."
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A spokesperson for Johnson's office quickly clarified that the senator was not suggesting "putting Medicare and Social Security on the chopping block," according to a report by The Hill. Instead, it would mean the programs are up for re-evaluation annually.
"The Senator's point was that without fiscal discipline and oversight typically found with discretionary spending, Congress has allowed the guaranteed benefits for programs like Social Security and Medicare to be threatened," the spokesperson said.
Medicare and Social Security are supposed to be guaranteed benefits for Americans who have reached a certain age and paid into their programs during their working lives via payroll taxes.
It's important to understand what "discretionary funds" means to determine what could happen to your benefits now or in the future if Senator Johnson gets his way.
What Is Discretionary Spending?
Discretionary funds are funds that are subject to review under annual appropriation acts, according to the Congressional Budget Office, a non-partisan group that analyzes the costs of such programs.
On the other hand, mandatory funds are governed by law and do not change based on annual federal budgets. Mandatory or direct spending includes Social Security, Medicare, Medicare, the Supplemental Nutrition Assistance Program (SNAP), unemployment, student loans and other programs.
Mandatory spending made up roughly 65% of the 2022 federal budget, up from 60% in 2012.
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Are Your Benefits 'On the Chopping Block?'
It's highly unlikely that Medicare and Social Security would be eliminated, even if they were relegated to the status of discretionary funds. Because Democrats rarely argue in favor of cutting these programs, it would mean Republicans would first have to take the majority in the House and Senate. Then, all Republicans - not just some - would have to be in favor of the cuts.
However, classifying Medicare and Social Security as discretionary spending would mean that these programs could be in danger of cuts, or possible elimination, annually. They would be another item up for debate - and possible sacrifice - during budget negotiations.
This would create additional financial insecurity for an already struggling population of older Americans. Anywhere from 12% to 40% of retired persons rely on Social Security as their sole means of retirement income, according to a report from CNBC.
The Bottom Line
Right now, Social Security and Medicare both look to be safe, which means you can likely expect to receive these benefits when you reach the appropriate age to file.
But it's smart not to put your financial future in anyone else's hands - including the government. Speak to a financial advisor to discuss investment strategies than can help provide you with income beyond Social Security in your later years. Ideally, Social Security should supplement individual retirement funds - not replace them.
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This article originally appeared on GOBankingRates.com: Sen. Ron Johnson Suggests Making Social Security & Medicare Discretionary Funds - How Would That Impact Your Benefits?