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From the category archives: Budget

National Committee President, House Dems Decry GOP Tax Plan’s "Dire" Impact on Seniors

As Republicans remain indifferent – or in denial – about the impact of the Trump/GOP tax scam on older Americans, seniors’ defenders are sounding the alarm.  National Committee president and CEO Max Richtman joined House Minority Leader Nancy Pelosi and other Democratic representatives in front of the U.S. Capitol today to warn of the dangers the tax plan poses to seniors’ retirement and health security. Richtman called the tax bill a “con game that should be called the ‘Washington two-step.’”

“Step one is cutting taxes for top-earning households and profitable corporations. Step two:  use the higher deficits the tax bill will create to cut critical programs, like Medicare, Medicaid and Social Security.” – Max Richtman, NCPSSM president and CEO, 12/6/17

Senator Marco Rubio (R-FL) let the cat out of the bag when he acknowledged that Republicans will come after seniors’ earned benefit programs as soon as the tax cut passes.  In fact, the tax bill will trigger an immediate $25 billion cut to Medicare unless Congress quickly waives the PAYGO provision of federal budget law. (Both Medicare and Medicaid – which helps seniors afford long-term care – are targeted for deep cuts in the GOP budget plan.) The tax scam also hurts older Americans by zeroing out the Obamacare coverage mandate penalty (which could result in higher premiums for 50-64 year-olds).  It also imposes the paltry “Chained CPI” as an inflation index for taxes, which could later bleed over into Social Security cost-of-living adjustments and shrink badly needed increases in retirees’ checks. 

Speaking on this chilly December afternoon in the nation’s capital, Leader Pelosi said, “It’s a cold day for seniors because of this GOP tax scam. It is an assault on the older Americans who built this country.  Seniors are among the biggest losers in this legislation.”

Congresswoman Jan Schakowsky (D-IL) called the tax bill “the first step in the Republican plan to undermine the financial and health security of older Americans.”

Rep. Doris Matsui (D-CA) observed that the threat to seniors from the GOP tax legislation “keeps getting worse and worse” and said the bill would have “cruel and dire” consequences.  She slammed the House bill’s repeal of the medical expense deduction, which millions of seniors use to mitigate high out-of-pocket medical and long-term care costs.

Republican members of a House-Senate conference committee are currently meeting behind closed doors to work out the differences between each chamber’s version of the tax bill.  Leadership hopes to pass a final bill and send it to President Trump for signature before Christmas – perhaps the worst holiday gift Congress could possibly give to the American people.  Seniors and their advocates are right to be concerned about this legislation, which is deeply unpopular with the public (only 29% of Americans support it in the most recent polling).  But after years of dreaming about slashing Social Security, Medicare, and Medicaid, Republicans are now in a position to carry out their craven plans - without apparent regard for public opinion, fairness, or decency. 

National Committee President Warns Senators About GOP Tax & Budget Scheme

Seniors and other vulnerable Americans will be hurt if the just-released GOP tax scheme is enacted.  National Committee president Max Richtman told a hearing room full of Senators - including Sen. Ron Wyden (D-WA), Sen. Elizabeth Warren (D-MA), Sen. Debbie Stabenow (D-MI), Sen. Mazie Hirono (D-HI), Sen. Amy Klobuchar (D-MN), Sen. Bill Nelson (D-FL), and Sen. Chris Van Hollen (D-MD) - that the Republicans' budget and tax legislation must be defeated.

“The Republican budget and tax plans allow [Congress] to slash programs critical to older Americans and people with disabilities – all to pay for massive tax cuts for the very wealthy and profitable corporations.” – Max Richtman, 11/1/17

We analyzed the harm that the GOP proposals would wreak on older Americans in a post last week, entitled GOP Budget Resolution a "Lump of Coal" for Seniors, Middle Class.  Among the more heinous measures, Republicans seek to cut nearly $500 billion from Medicare, $1.3 trillion from Medicaid, more than $600 billion from Social Security Disability Insurance (SSDI), and will likely slash billions from other programs that seniors rely on for financial and health security.  

Richtman told the Senators that Medicare beneficiaries “cannot afford to pay more for less coverage” – particularly when half of them have incomes of less than $26,200 a year and spend 25 percent of their Social Security check to pay for Medicare premiums and cost-sharing. “And they cannot afford cuts to Medicare such as those assumed in the House budget – turning Medicare into a voucher program and raising the eligibility age from 65 to 67,” he explained.

What’s more, the tax plan will increase the national debt and compel Republicans to cut seniors’ earned benefits more aggressively in the future – even though Social Security and Medicare Part A are self-financed and do not contribute to federal budget deficits.

 “By increasing the federal budget deficit by at least $1.5 trillion, this measure would leave Social Security, Medicare and Medicaid vulnerable to benefit cuts to make up the difference.” – Max Richtman, 11/1/17

Under the tax bill supported by President Trump and congressional Republicans, the nonpartisan Tax Policy Center estimates the top one percent of Americans would receive 80 percent of the tax cuts. For the top one percent, the average annual tax cut would be over $200,000 by 2027. 

The bottom 80 percent of Americans would receive 13 percent of the tax cuts. In fact, 115 million households earning less than $75,000 a year would receive a tax cut of just $190 on average. But ultimately, most Americans would lose much more in program cuts than they would gain from tax cuts. 

Richtman implored Congress to resist this reckless legislation:

“The National Committee urges all Senators and Representatives to oppose legislation to enact these ‘Robin Hood-in-Reverse’ budget and tax proposals and instead work together to protect the retirement and health security commitments made to generations of Americans." - Max Richtman, 11/1/17


GOP Budget Resolution a "Lump of Coal" for Seniors, Middle Class

While the media have been largely consumed by the latest outrages from the White House, Republicans in Congress have been quietly working to radically redesign our tax code and cut trillions in spending that benefits ordinary Americans, including and especially seniors. With little fanfare, the Senate voted 51-49 last week to pass a cynical budget resolution that’s really a Trojan Horse for tax cuts for the wealthy and big corporations. Yesterday, the House followed suit by a vote of 216-212.  

Had a few votes gone the other way, these plans would have been stopped dead in their tracks, as we witnessed with Obamacare repeal.  But the public wasn’t paying much attention, and the pressure on Congress to vote in the public interest was nowhere near as intense.

Even if some of the more heinous budget cuts fall away, the resolution is an unsettling declaration of priorities that can only be described as mean-spirited and immoral.  As Dylan Scott keenly observes in Vox:

The budget stands as a vision of what the Republican majority wants to do, and perhaps would do if it had eight or nine more votes in the Senate. It suggests that basically every Republican in each chamber (the only senator opposed was Rand Paul, who wanted deeper cuts) is comfortable aligning himself or herself with an agenda that radically cuts the social safety net for… retirees and the middle class. – Dylan Scott in Vox, 10/26/17

The GOP budget and tax scheme, which leadership would like to pass before the holidays, has been rightly described as a “lump of coal for the middle class.”  Yes, the tax plan is a big, fat Christmas gift to the wealthy, wrapped in a package of distortions.  Despite President Trump’s disingenuous claim that it helps middle income earners, 80% of the tax savings goes to the wealthiest 1% of the American people.  The rest get only a trickle of tax relief.  

Tax policy that benefits the middle class, including deductions for state and local taxes, goes out the window in this plan.  So might existing exemptions for 401K contributions, currently set at $18,000 per year.  GOP leaders have talked about significantly reducing the amount of pre-tax contributions people can make, reportedly to $2,400 per year.  (The exact details are secret, of course, until the plan is unveiled on November 1st.)  The party of personal responsibility is actually proposing to penalize Americans for saving for retirement – as some 50 million of us now do to the tune of $67 billion in tax savings per year.

The GOP would pay for massive tax breaks for the rich by cutting essential safety net programs for seniors and other vulnerable Americans.  These are among the Scrooge-like proposals in the  budget plan:

*Cuts nearly $500 billion from Medicare by privatizing the program and raising the eligibility age.

*Cuts $1.3 trillion from Medicaid over ten years, jeopardizing long term care services and supports for the elderly.

*Cuts $653 in Supplemental Security Income (SSI) for some 8 million low-income seniors and people with disabilities.

*Will likely require cuts in in Older Americans Act programs (e.g., Meals on Wheels), home heating assistance for seniors, and research into diseases affecting the elderly, including Alzheimer’s and cancer.

Meanwhile, the supposedly budget-conscious GOP has voted to allow itself to deficit-fund $1.5 trillion of the tax cut package. As the hole in the deficit grows, Republicans will then be able to come after Americans’ earned benefits – Social Security and Medicare – to try to close the gap, even though Social Security and Medicare Part A are self-funded and don’t affect general revenues.  

Of course, the long-planned assault on Medicare has already begun – with new viability now that Republicans control all branches of government. The budget resolution contains oft-told prevarications about the program:

"Medicare spending is on an unsustainable course… Given this untenable situation, the budget resolution supports work by the authorizing committees to recommend legislative solutions extending Medicare's solvency in the near term, while pursuing policies that place the program on a sustainable long-term path." – GOP 2018 Budget Resolution

The way to strengthen Medicare now and for the future is to keep the Affordable Care Act in place (which is already saving Medicare hundreds of billions) and allow the government to negotiate prescription drug prices with drug companies, for starters. 

Because Congressional leadership is forcing reckless tax cuts through the reconciliation process (where measures can pass the Senate with a simple majority), Democrats will be unable to impede this cruel juggernaut.  As we saw in the Obamacare repeal battle, it will once again fall to a handful of Republicans of conscience to put the brakes on unfair tax and budget cuts.  But they will do so only if they hear loudly and clearly from all of us.


GOP Tax Cuts Could Cost Seniors in the Long Run

The GOP had scarcely emerged from the defeat of their latest Obamacare repeal legislation when they pivoted lightning-quick from healthcare to taxes.  The tax reform plan the party unveiled last week may ultimately endanger the well-being of older Americans more than the vanquished healthcare bill.  Here’s why:  The nonprofit Tax Policy Center estimates that the GOP tax plan will reduce federal revenues by a net $2.4 trillion in the next 10 years.  As the deficit grows, Congress will look to cut spending.  Republicans have already called for deep cuts to Social Security and Medicare, and would no doubt come after those programs looking for massive savings. Seniors’ earned benefits could be used as piggy banks to pay for reckless tax cuts that largely benefit the wealthy.

Americans for Tax Fairness put it his way:

"[The tax plan’s] eye-popping cost will lead to deep cuts in Social Security, Medicaid, Medicare, and public education that will leave working families in the cold."- Americans for Tax Fairness

… while House Democratic leader Nancy Pelosi predicted:

“Make no mistake: after Republicans’ tax plan blows a multi-trillion dollar hole in the deficit, they will sharpen their knives for Social Security, Medicare, Medicaid.” – House Minority Leader Nancy Pelosi 

Budget hawks (including President Trump’s budget director Mick Mulvaney and House Speaker Paul Ryan) have long dreamed of cutting Social Security and Medicare.  Once their tax plan balloons the deficit, they will have the perfect excuse for gutting those programs – even though Social Security and Medicare Part A are completely self-funded by workers’ payroll contributions; they contribute not a penny to the deficit.

In fact, the budget cutters’ knives are already sharpened. The 2018 House Budget resolution calls for nearly $500 billion in cuts to Medicaid over the next decade.  That would be devastating for the 1.4 million seniors who rely on Medicaid for long-term care, and millions of others who are dually eligible for Medicaid and Medicare.  The House budget resolution also includes nearly $500 billion in cuts to Medicare over the next ten years.  Under the House budget plan, Medicare would be privatized and the eligibility age raised from 65 to 67 (an effective benefit cut). If these changes are enacted, seniors will be left to fend for themselves in the private insurance market with vouchers that may not keep up with rising costs. 

Despite President Trump’s protestations that the GOP tax plan won’t benefit the rich, that’s precisely who would reap the biggest gains.  (Trump himself could save an estimated $1 billion in taxes!)  According to the Tax Policy Center’s analysis:

"Taxpayers in the top 1 percent would receive about 50 percent of the total tax benefit from the tax overhaul, with their after-tax income forecast to increase an average of 8.5 percent." – Tax Policy Center 

On the other hand, some in the middle class would see their taxes go up.  One in seven households earning between $48,000 and $86,000 per year would pay more in taxes next year; the proportion would double during the next decade.  For households earning $150,000-217,000 a year, one third would immediately pay more in taxes. 

Republicans claim that the tax cuts will pay for themselves through intense economic growth.  They have tried this before (Most recently, with the Bush tax cuts in the early 2000s), and it didn’t work out.  Instead, deficits swelled, reinforcing budget hawks’ instincts to cut programs for the most vulnerable members of our society, including and especially seniors.  One of the (repentant) architects of the failed trickle-down economics of the 1980s, Bruce Bartlett, put it best in a recent column for USA Today: 

"Tax cuts and tax rate reductions will not pay for themselves; they never have. Republicans don’t even believe they will, they are just excuses to slash spending for the poor when revenues collapse and deficits rise." – Bruce Bartlett, former Congressional economist

 

 

Rep. Brat at His Worst: Spreading Myths about Social Security and Medicare

In a contentious interview with CNN’s Kate Bolduan this week, Rep. Dave Brat (R-VA) perpetuated some dangerous myths about Social Security and Medicare.  Brat, a Tea Partier and fiscal bomb thrower, has been campaigning to cut seniors’ earned benefits since first running for Congress in 2014.

The CNN interview heated up when Bolduan pressed Brat about the recently-passed deal to suspend the debt ceiling and keep the government open, which he opposed.  It’s worth quoting Brat’s answer at length here, because it is only borderline comprehensible and riddled with inaccuracies:

“I was just at my convocations back home with the kids. The kindergarteners are in the class of 2030, they just told me. They will graduate college in 2034. So if you do know the context, the context is that is the year Medicare and Social Security are insolvent. I don’t think people do know the context.  Otherwise there’d be more urgency and they wouldn’t put up with the nonsense we’re doing up here on the fiscal front. Right? If the press would weigh in on what the damage -- it’s a guaranteed fiscal crisis in 2034. Guaranteed.  In law, I’m on the budget committee, we can’t touch it.  Right--You got to pass in law.  So that’s – that’s the context and so with that; if you ask the average voter how you should vote on a clean debt ceiling increase with no fiscal discipline whatsoever, it’s the whole country 90%.”

Where to begin dissecting this statement?  The relevance of kindergarteners graduating college in 2034 notwithstanding, Social Security and Medicare will not be insolvent that year.  If Congress takes no corrective action whatsoever, the Medicare Part A Trust Fund and the Social Security Trust Funds will be depleted in 2029 and 2034, respectively.  But that does not mean the programs will be insolvent.  Revenue from workers’ payroll taxes still will be flowing in, allowing Medicare to pay 88% of full benefits and Social Security 77% --- with no further action from Washington.  In fact, the 2017 Social Security Trustees Report says there is now $2.847 trillion in the Social Security Trust Fund, which is $35.2 billion more than last year --- and that it will continue to grow with payroll contributions and interest on the Trust Fund's assets.)  

Does this mean we sit by and do nothing?  Of course not.  But Rep. Brat’s prescriptions are as draconian as his statements are inaccurate.  The Congressman has championed cutting Social Security and Medicare and raising eligibility ages as the only solution.  When running for office in 2014, he told a Tea Party crowd:

“It’s not just little marginal changes, right?  In order to avoid those insolvency issues with Medicare and Social Security, you’re going to have to do some major cuts."

According to PolitiFact, Brat went on to say that people will ‘have to work longer before receiving benefits’ – meaning raising the retirement age.  This favorite proposal of fiscal hardliners is actually a benefit cut.  And it is based on the misconception that just because average life expectancy is rising, everyone can work well past 65 – even though working class Americans (especially those doing physical labor on the job) may not be physically able to continue working into their late 60s like their wealthier counterparts.

Hardliners don’t like to talk about this, but there are other ways to keep our earned benefits fiscally sound without punishing the people who depend on them. The National Committee supports legislation by Senator Bernie Sanders (I-VT), Rep. John Larson (D-CT), and others in Congress to keep Social Security solvent without cutting benefits or raising the retirement age – mainly by lifting the payroll tax income cap so that the wealthy pay their fair share.  In fact, the Sanders and Larson bills actually boost benefits and cost-of-living increases while ensuring the fiscal health of Social Security well past those kindergartners’ 2034 graduation date. That way, those kids can count on their benefits when they retire around 2077.

But some members of Congress – and Rep. Brat in particular - ignore or dismiss these modest and manageable solutions, proposing instead that seniors shoulder the burden through benefit cuts and a higher retirement age.

Now we come to the second myth that Brat likes to propagate:  that Social Security and Medicare are major drivers of the federal budget deficit.  At that same 2014 Tea Party campaign event, Brat justified Social Security and Medicare cuts by saying:

“We’re going to have to take some bad medicine… to just balance the budget. If you don’t solve it, then in 11 years nearly all federal revenue will go only to [Social Security and Medicare].”

The fact is that Social Security has no net effect on the federal budget and contributes not one penny to the deficit. It is self-financed through workers’ payroll taxes.  Ditto for Medicare Part A.  Suggesting that these programs must be cut to balance the budget is disingenuous at best, but that doesn’t stop fiscal hardliners and the mainstream media from spreading the myth.  

Notice how Brat conflates the debt crisis with Social Security and Medicare at the end of his CNN rant.  Unfortunately, this claim is made far too often, but is hardly ever challenged by on-air journalists, this time being no exception (though, in truth, Bolduan was struggling just to control the interview).

Why do the on-air rantings of Congressman Brat matter? His arch-conservative philosophy wouldn’t be so dangerous if he were truly on the margins of political debate. But for the first time in more than a decade, fiscal hawks have the power to impose their hardline views on America’s most vulnerable citizens. Brat is a member of the House Budget Committee, which has already voted to privatize Medicare and raise the eligibility age.  That’s a powerful perch for spreading myths about Social Security and Medicare in order to justify cuts that are just plain cruel. 

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