Nikki Haley wants to reform Social Security and Medicare. Donors are paying attention

(CNN) — As she woos her party’s wealthy donors, former South Carolina Gov. Nikki Haley is promoting a policy that sets her apart from her closest competitors for the 2024 Republican presidential nomination: A willingness to stake out positions on the politically fraught issue of overhauling the nation’s entitlement programs.

In a recent Haley endorsement, Emily Seidel – a top official in the influential political network associated with billionaire Charles Koch – praised the former UN ambassador’s “courage” for advocating changes to “an entitlement system that makes promises it can’t keep.”

Other establishment figures who have backed Haley – or are taking a second look at her candidacy – cite shoring up the nation’s ailing Social Security system as a key priority and view her stance as an advantage over her rivals.

“We need a complete reevaluation of entitlements,” Ken Langone, the billionaire co-founder of Home Depot who is weighing backing Haley, told CNN recently.

“What the hell is a guy like me (doing) getting $3,500 a month from the government?” Langone, whose net worth Forbes pegs at more than $7 billion, said of his monthly Social Security benefits. “That’s outrageous. I shouldn’t get a nickel.”

Haley has called for several changes to the nation’s safety net programs, including increasing the age at which today’s younger workers would become eligible for Social Security retirement benefits and limiting the growth of benefits the wealthy receive.

“I recognize that Social Security and Medicare are the last thing the political class wants to talk about,” she said during a September speech unveiling her economic proposals.

But, Haley said, “any candidate who refuses to address them should be disqualified. They’ll take your vote and leave you broke.”

Her positions on entitlement reform – and those of her rivals – will face greater scrutiny as the January 15 Iowa caucuses draw closer. Haley has risen in the polls and is competing with Florida Gov. Ron DeSantis to be seen as the main alternative to the current front-runner for the Republican nomination, former President Donald Trump.

Haley and DeSantis are among the candidates slated to face off Wednesday at the fourth GOP presidential debate sponsored by the Republican National Committee. Trump plans to continue his pattern of skipping the debates.

Financial risk

There’s no debating that Social Security and Medicare, the government’s health insurance program for older and disabled Americans, face long-term financial issues.

The combined Social Security trust fund reserves are on pace to be depleted in 2034, according to the most recent estimates from the program’s trustees. Without those reserves, Social Security will be able to pay only about 80% of benefits from the income that continues to flow into the program.

Medicare, meanwhile, will have only enough money in its hospital insurance trust fund to pay all scheduled benefits until 2031, after which it will be able to cover only 89% of costs, according to the most recent Medicare trustees report.

Nearly 67 million Americans have received monthly Social Security benefits this year, and more than 66 million people are enrolled in Medicare. Polling shows little support for major changes to the programs themselves to help shore up their finances.

A March CNN/SSRS poll of Republicans and Republican-leaning independents, for instance, found that 59% said it was “essential” that the GOP nominee for president “pledges to maintain Social Security and Medicare as they are.”

And just 7% of Republicans surveyed in October in an AP/NORC poll said that the government was spending too much on Social Security.

It’s little wonder then that Trump has steadfastly advocated keeping the programs as they are – despite his past support for major changes, including raising the retirement age to 70 and privatizing Social Security.

DeSantis has distanced himself from his votes as a congressman for nonbinding resolutions that would have increased the threshold for seniors to collect Social Security benefits to age 70.

In his presidential campaign, DeSantis has maintained that promises made to current beneficiaries will be kept, telling Fox News earlier this year that Republicans are “not going to mess with Social Security.”

More recently, in an interview on CNBC, DeSantis discussed the need to find bipartisan accord on the future of Social Security, saying, “Looking forward, in terms of future generations, people of our generation … you’ve got to work in a bipartisan way with the other party. You cannot do this with one party.”

A super PAC aligned with Trump spent millions earlier this year on ads that sought to pummel DeSantis for his past support for changes to Social Security, data collected by AdImpact shows. A response ad from a DeSantis-affiliated super PAC accused the Trump camp of “repeating lies” about Social Security and reiterated the governor’s pledge that Republicans won’t “mess” with the program.

Political peril

Some Republican candidates are reluctant to tackle Social Security reforms because they “don’t want to have ads run against them” and risk alienating older voters, said Whit Ayres, a veteran GOP pollster.

“There are a lot of people who are scared to touch the third rail of American politics,” he said. “On the other hand, the reality is stark: It’s really troubling to think about Medicare and Social Security running out of money and having to slash benefits by dramatic amounts.”

Many Democrats, including President Joe Biden, support proposals that would raise new taxes on the wealthy to help make up funding shortfalls.

Andrew Biggs, a senior fellow at the American Enterprise Institute, said the political spectrum has shifted when it comes to entitlement reform.

“It used to be that any anybody running for president had to have some sort of pretty detailed plan for Social Security,” said Biggs, who served as principal deputy commissioner of the Social Security Administration under President George W. Bush. “It’s interesting that, today, the atmosphere and environment has changed so much that the litmus test for seriousness is if you’re willing to acknowledge that: ‘Yes, we have to do something.’”

Last month’s third GOP presidential debate underscored the intraparty divide. Only two of the five candidates onstage in Miami during the November 8 face-off – Haley and former New Jersey Gov. Chris Christie – said they backed raising the retirement age for younger workers.

Haley said those changes would not affect current beneficiaries or those nearing retirement.

“Those that have been promised, should keep it,” she said during the debate. “But for like my kids in their 20s, you go and you say, ‘We are going to change the rules.’ You change the retirement age for them. ”

But she has not said, when pressed for details, what that new retirement age should be.

Haley’s proposals include changing how Social Security’s annual cost-of-living adjustments, which are currently tied to the Consumer Price Index (CPI), are calculated. She instead would link those increases to another measure, chained CPI, which is lower because it reflects that consumers often switch to cheaper options of similar goods when prices jump.

Additionally, according to her campaign, she wants to expand Medicare Advantage plans, which are run by private insurers, to increase competition.

For North Carolina businessman Art Pope, Haley’s position on entitlement reform is one of several factors that persuaded him to endorse the former governor last week after closely comparing her economic plans with those of DeSantis, which he cast as “too populist.”

Pope, who oversees a multistate retail chain, had previously backed the presidential campaign of former Vice President Mike Pence, who had said that cuts to the programs should be on the table. Pence dropped out in late October after failing to gain traction in the polls.

“Part of populism is appealing to the people with short-term solutions that may sound good or even feel good in the short term but, long term, are not responsible,” Pope said. “We need leadership to make the hard decisions, not to cut Social Security but to save Social Security.”

“You can’t put your head in the sand.”

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CNN’s Ariel Edwards-Levy and David Wright contributed to this report.