What a Republican Senate Candidate Just Said About Spending Cuts Could Worry Retirees

Cuts to Social Security or Medicare are the last thing retirees want to worry about, especially when they're already trying to stretch their monthly checks.

But Texas Republican Senate candidate Ken Paxton has stirred up concerns after a leaked recording revealed him telling donors that Congress needs to cut federal benefit spending to reduce the national deficit.

With Social Security and Medicare accounting for a large share of that spending, his comments have left retirees wondering whether their senior benefits could be affected. Paxton didn't specify which programs he would target, leaving some important questions unanswered for Americans counting on those monthly payments.

What Ken Paxton said about cutting federal spending

At a private fundraiser on September 24, Texas Attorney General and Republican Senate candidate Ken Paxton told donors that cutting federal spending was necessary to reduce the deficit.

"Making some reasonable cuts to mandatory spending, you're gonna have to do it," Paxton said in a recording that later became public. "Or there is no solution." He also added, "We have to suck it up."

Mandatory spending covers programs such as Social Security, Medicare, and Medicaid, which are funded under existing laws. Paxton didn't name any specific programs he wanted to cut or say how much spending should be reduced.

After the recording became public, his campaign said he wouldn't cut Social Security, although it made no similar commitment regarding Medicare or Medicaid.

Most mandatory spending goes toward programs Americans rely on

Nearly three out of every four dollars in mandatory federal spending go toward Social Security, Medicare, and Medicaid, according to the Congressional Budget Office (CBO). With roughly $4.2 trillion spent on mandatory programs each year, these benefits make up a large part of the government's budget.

The federal deficit is also approaching $2 trillion a year, while Congress spends about $1.9 trillion annually on other priorities, including defense and federal agencies.

With such a large gap to close, it's easy to understand why lawmakers might look toward mandatory spending for savings. However, any changes to Social Security or Medicare benefits would still need congressional approval.

Higher Medicare costs could leave retirees with less money

If you're on Medicare, one possible concern is having to pay more for your healthcare. The Congressional Budget Office has outlined a proposal that would increase the share of Medicare Part B costs paid by enrollees from 25% to 35%, which could mean higher monthly premiums and less money left from your Social Security check.

Other options the CBO has outlined include reducing payments to Medicare Advantage plans, potentially affecting the extra benefits they offer.

Cuts to Medicaid funding could also make it harder for some older Americans to get affordable nursing home care. Paxton hasn't proposed these specific changes, but they give you an idea of how federal spending reductions could affect retirees.

Social Security has its own financial challenges, with trustees projecting that incoming taxes will cover only 78% of scheduled retirement benefits once its trust fund reserves run out in 2032. That's another concern for retirees, although Congress still has time to address the shortfall.

Could cracking down on fraud help reduce federal spending?

The Government Accountability Office estimates that the federal government loses between $233 billion and $521 billion a year to fraud, so there's certainly money to recover. However, with the annual deficit approaching $2 trillion, recovering those losses wouldn't be enough to close the gap.

It's also important to understand that not every improper government payment involves fraud. For example, the agency that oversees Medicaid has reported that about 77% of the program's improper payments involve missing or incomplete paperwork, rather than confirmed cases of people receiving benefits they shouldn't.

Better oversight could help reduce waste and save money, although it would still leave Congress with some difficult decisions about federal spending.

Cutting federal spending doesn't guarantee a smaller deficit

Cutting federal spending might sound like an obvious way to reduce the deficit, but the government also needs enough tax revenue coming in to pay its bills. When taxes are reduced, some of the savings from spending cuts can be wiped out.

Take the federal budget law passed in 2025, for instance. It included about $1.1 trillion in spending cuts, which sounds like a lot of savings. However, the law also reduced taxes by roughly $4.5 trillion, leaving the government with an estimated $3.4 trillion more in deficits over 10 years.

For retirees, the concern is that cuts to programs they rely on could come with little improvement to the government's overall finances. After all, saving money on one side of the budget only goes so far when much more is being given up on the other.

Bottom line

Talk of cutting federal benefits is bound to make retirees uneasy, especially when Social Security and Medicare are such important parts of their monthly budget. Paxton's comments have brought those concerns into focus, although there's still a long way to go before any proposed cuts could become law.

For now, it's a good opportunity to think about how well you've prepared for retirement and look for ways to protect your monthly budget from rising healthcare costs. Keep an eye on proposals as they develop, particularly those that could affect what you pay out of pocket. The more prepared you are financially, the less a potential change to your benefits has to disrupt your retirement plans.

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