On The Money — Medicare, Social Security take midterm spotlight

Democrats see Republican plans to pare down Social Security and Medicare as a potential boon to their midterm election hopes. We’ll also look at President Biden’s threat to oil companies and if any relief to supply chains is coming.

But first, we’ve got the latest on the criminal tax fraud trial facing the Trump organization.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom.

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Why Medicare, Social Security is a midterm issue

The fate of Social Security and Medicare is back in the spotlight less than two weeks before the midterms.

The White House and Democrats have made both entitlements central to their closing pitch to voters, sounding the alarm that a Republican majority in the House would look to cut programs that millions of Americans rely on in a bid to reduce spending.

  • While some GOP lawmakers have not shied away from talk of altering those programs, many in the party have dismissed the Democratic attacks as a ploy designed to shift attention away from persistent inflation and broader concerns about the economy. 

  • Strategists and Democratic officials view tying Republicans to attacks on Medicare and Social Security as a salient message. Those programs benefit older voters who reliably cast ballots, even in midterm or off-year elections. 

  • Multiple lawmakers, including those in the running to chair the House Budget and House Ways and Means committees, have spoken about the possibility of entitlement reform to rein in spending.

The context: Republicans have long advocated for reduced spending, and some in the party have argued entitlement programs like Social Security and Medicare have gotten too big or should be restructured or privatized to ensure they remain solvent.

Much of the focus during this election cycle has been on a proposal from Sen. Rick Scott (R-Fla.), the head of the Senate GOP campaign arm, released in February. The 11-point plan to “Rescue America” included a proposal to sunset government programs every five years, meaning lawmakers would need to vote to extend Medicare and Social Security.

The Hill’s Brett Samuels digs into this here.

START DRILLING 

Biden threatens oil companies with ‘higher tax’ if they don’t increase production

President Biden on Monday warned that oil companies would face a “higher tax” on their excess profits if they don’t reinvest in increasing production to bring down prices at the pump.

“They have a responsibility to act in the interest of their consumers, their community and their country, to invest in America by increasing production and refining capacity,” Biden said of the companies during a speech on Monday afternoon.

  • His comments come after ExxonMobil, Chevron and Shell reported massive third-quarter earnings in what has been a record-breaking year for their profits.

  • Biden can’t unilaterally impose a tax on companies; he would need a new law to pass Congress. 

  • Legislation would face a tough path even in a Congress held by Democrats since at least 10 GOP votes would now be needed to break a GOP filibuster in the Senate.

Rachel Frazin has the story here.

FOR SALE OR FORSAKEN? 

Is the US headed toward a housing crash? Experts say it’s not 2008

Sharply rising mortgage rates, a steep decline in home sales and a record price slowdown have raised concerns that the housing market could crash.

  • The average rate for a 30-year fixed rate mortgage reached over 7 percent last week, the first time in almost two decades that rates climbed that high.  

  • U.S. home prices saw a record slowdown in August, falling by 2.6 percent, and new home sales fell 11 percent in September, according to data released by the Census Bureau.

But experts argue these market trends are a symptom of a correction after two years of massive growth and several key elements present during the 2008 housing crash are missing in today’s current economic climate.

“Until this month, the pullback in the housing market could be described as something of a return to pre-pandemic conditions before sub-3% mortgage rates ignited a homebuying frenzy in 2020 and 2021,” Redfin Deputy Chief Economist Taylor Marr said in an analysis.

The Hill’s Adam Barnes has more here.

OFF THE CHAIN 

Are US supply chain problems over?

Snarled supply chains that helped fuel red-hot inflation are slowly disentangling, offering hope for relief for cash-strapped consumers.

  • The New York Federal Reserve’s global supply chain pressure index is sitting at its lowest level in nearly two years after spiking late last year.  

  • But the U.S. faces geopolitical tensions, a shortage of truck drivers and a potential railroad strike that all endanger recent progress.

“There’s been a positive recovery. But we are never going to go back to the levels of stability that we used to have before COVID,” said Sergio Gutierrez, CEO of freight logistics firm RPM.

Karl explains the situation here.

Good to Know

Elon Musk has been named sole director of Twitter, dissolving the board in place before he completed his $44 billion acquisition of the company, the social media platform said in a securities filing on Monday.

Musk became the sole director of the company “in accordance with the terms of the Merger Agreement,” the company told the Securities and Exchange Commission.

Other items we’re keeping an eye on:

  • The conservative-majority Supreme Court on Monday appeared skeptical of affirmative action in higher education during arguments over race-conscious admissions policies at two prestigious universities. 

  • Millions of Americans will be able to start signing up for health insurance on Tuesday when Obamacare’s 10th open enrollment period kicks off, as the Biden administration seeks to sustain record low uninsured numbers. 

  • The Supreme Court on Monday let stand a ruling that allows the Transportation Security Administration (TSA) to require mask-wearing on planes, trains and other forms of transport.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.

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