With the U.S. national debt totalling over $33 trillion and the White House calling for billions of dollars more in spending packages, billionaire investor Stanley Druckenmiller is calling for action to offset to the costs.

“We are spending like drunken sailors,” he said on CNBC’s Squawk Box.

Don’t miss

• Commercial real estate has outperformed the S&P 500 over 25 years. Here's how to diversify your portfolio without the headache of being a landlord

• Rich young Americans have lost confidence in the stock market — and are betting on these 3 assets instead. Get in now for strong long-term tailwinds

• Save big on your holiday shopping with an app that’s already saved users $800 million

Druckenmiller went on to explain that the federal government was spending 20% of the country’s GDP prior to the COVID-19 pandemic — but this proportion has since climbed to 25%.

“My father told me ‘if you’re in a hole, stop digging Stan.’”

While Biden recently passed measures on Nov. 17 to temporarily stave off a government shutdown over the holiday season, Druckenmiller has previously proposed the government slash funding to a source of income for millions of U.S. seniors — Social Security. Here’s why and by how much.

America has a spending problem

The U.S. has been running a deficit for years — with the federal government spending $1.7 trillion more than it collected in the 2023 fiscal year alone.

And under a deficit, in order to pay for government programs, such as Social Security and emergency relief, the government borrows money, in part, by selling Treasury bonds, bills and other securities. This, of course, adds to the national debt.

In October, President Biden requested nearly $106 billion in funding from Congress, with $61.4 billion going toward Ukraine and $14.3 billion in military aid for Israel, including air and missile defense support.

“I was actually happy to see the announcement — the support for Ukraine and Israel,” Druckenmiller said during the CNBC interview. “I was waiting to see what the offset was going to be.”

Read more: Thanks to Jeff Bezos, you can now use $100 to cash in on prime real estate — without the headache of being a landlord. Here's how

The former hedge fund manager goes on to say that he was surprised to see the White House announce another $56 billion in emergency spending that includes money for child care, disaster relief and aid for lower-income Americans.

“Child care is not emergency spending,” he says.

But some experts would disagree.

The country is currently on the edge of a “child care cliff”, after the expiration of the Child Care Stabilization Program, which was introduced in 2021.

Think tank The Century Foundation reported that millions of children are at risk of losing their daycare spots and families could lose billions of dollars each year due to reduced hours or leaving the workforce entirely.

Earlier in November, Biden staved off a government shutdown by signing a temporary spending bill that ensured the government will stay open over the holiday season. The bill did not include the $106 billion request that included foreign aid for Ukraine, Israel and Palestine, so those efforts have been stalled until the new year and Congress continues to butt heads over the larger federal budget.

Druckenmiller wants cuts to “entitlements”

When asked whether he agreed with the House Republicans’ proposal to fund Israel with $14.3 billion by cutting funding to the IRS, Druckenmiller sidestepped the question.

“I want to go after entitlements. It’s where the money is,” he said.

Druckenmiller believes future seniors will have to face a cut to their Social Security benefits “no matter what.”

“This generation has got to take a cut,” he says. “Right now, current seniors, you’re going to get 100 cents on the dollar. Future seniors looking at five or 10 cents on the dollar, is it not unreasonable for us to go to 85 or 90 cents on the dollar?”

As of 2024, more than 71 million Americans will be collecting Social Security benefits. Of the almost 67 million people who collected benefits in 2023, nearly 9 out of 10 were over the age of 65.

With inflation prices keeping prices high, Social Security benefits are already insufficient, especially for low-income seniors already hurt by the expiration of extra food stamp aid in March.

In fact, older adults are now the fastest-growing segment of America’s homeless population, according to the Wall Street Journal.

Overall, the benefits make up about a third of a middle-income earner’s average wages, even though Mary Johnson, a Social Security and Medicare policy analyst at The Senior Citizens League, previously told Moneywise over half of older households have no savings to fall back on and rely mainly on their Social Security income in retirement.

To make matters worse, the reserves of the program’s main fund are projected to run out by 2033, meaning retirees would only receive 77% of their full benefits.

What to read next

• Worried about the economy? Here are the best shock-proof assets for your portfolio. (They’re all outside of the stock market.)

• Finish 2023 stronger than you started: 5 money moves you should make before the end of the year

• The US dollar has lost 87% of its purchasing power since 1971 — invest in this stable asset before you lose your retirement fund

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.