From the category archives: Budget
Congress is proposing a freeze on funding for the already strapped Social Security Administration at last year’s levels. The SSA administrative budget has already fallen by over 10 percent since 2010 after adjusting for inflation. The GOP’s 2016 SSA Appropriation ignores inflation and the fact that ten thousand Americans are turning 65 each day.
The Center on Budget and Policy Priorities details what these budget cuts mean for a program that touches the lives of virtually every American family:
Since 2010, SSA has lost over 6,000 employees, nearly 10 percent of its staff. As a result, SSA's service is suffering:
- Reduced field office hours.
- Increased wait times for appointments.
- Longer hold times.
- Cutbacks in Social Security Statements.
- Backlogged Disability Insurance claims.
- Delays in processing earnings reports.
Logically, you’re probably wondering how is an agency serving a growing number of Americans (and it’s not like the baby boomer generation is a surprise) be expected to do its job with no resources? The answer lies in the long-held “starve the beast” and “drown-the-government” conservative strategy still being practiced, decades later, by GOP leaders in Congress.
“I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” Grover Norquist
Social Security is well-managed with small administrative costs. However, underfunding popular programs that conservatives can’t outright abolish or dismantle (if they hope to keep their seats in Congress, anyway) continues to be used as a political strategy to weaken Social Security. This underfunding has now been going on long enough that Social Security services provided to average Americans have been cut to the bone.
Who ultimately pays the price for this political strategy? Average American families who have contributed their entire working lives to Social Security and have a reasonable expectation that the SSA would be funded by Congress to successfully fulfill its mission...as it has done for 80 years.
Seniors advocates with the Alliance for Retired Americans and the National Committee joined Reps. Keith Ellison (D-MN) and Jan Schakowsky (D-IL) in a press event today to express their opposition to legislation that would cut $700 million from Medicare to pay for a slice of the Trade Deal now being debated in Congress.
“Medicare is not the piggy bank for other programs. We’ve already seen what sequester has meant for the program. We’ve written to Congress because there’s just not enough awareness on this issue. Across the board cuts affects the integrity of the Medicare program.” Rich Fiesta, Alliance for Retired Americans Executive Director
“The use of Medicare cuts, 700 million dollars of Medicare cuts, to finance a program totally unrelated to Medicare sets a terrible precedent. It’s not death by a thousand cuts but that’s where we seem to be headed. I think it’s interesting that many of the same members of Congress who condemned Obamacare and decried savings in the Medicare program as cuts--savings which were, by the way, plowed right back into the program to provide preventive screenings, close the Part D donut hole and extend the program’s solvency--are now some of the same legislators who want to really cut money from Medicare to pay for an unrelated program.” Max Richtman, National Committee President/CEO
Members of the Congressional Progressive Caucus and the Congressional Task Force on Seniors are leading the charge against this proposal:
“10,000 people a day turn 65. We should be investing and expanding Medicare not stealing from it. People have paid into this program and expect it to be there...not to use that to fund anytime we need money to pay for another program...Medicare is not the ATM for everything Congress wants to pay for. Cutting this social insurance program isn’t the direction we should be going in. Medicare should not be the pay-for for trade deal. The best way to help workers is to stop trade deals that take their jobs...not cut Medicare to fund fixes.” Rep. Jan Shakowsky (D-IL)
“There’s going to be untold riches earned if TPP is enacted into law. There’s no doubt about that. Great profits will be derived for large international corporations...it seems only logical that the multinationals should fund the costs of the Trade Adjustment Assistance. I can not abide this. We’ll fight it with everything we have.” Keith Ellison (D-MN)
Reps. Ellison and Schakowsky say many of their colleagues don’t even realize this Medicare cut was slipped into the Trade Assistance provision. They’re raising the alarm but hope seniors and their families will also call and email their Members of Congress now since the debate is underway.
You can do that easily from our Leg Action Center.
Chances are if you’re a regular reader of this blog, the last issue you’d expect to see us write about is the hotly-debated and barely understood TPP (Trans-Pacific Partnership) trade deal. After all, keeping up with and explaining policy issues impacting Social Security, Medicare and Medicaid is complicated enough, so yes, we really didn’t plan on wading too deep into the trade deal. (Although you can read NCPSSM’s take on TPP and drug prices here.)
Unfortunately, that changed this week with news that Congress (with the White House running silent) intends to cut $700 million from the Medicare program to pay for a slice of the trade package. We talked to Michael Hiltzik the Los Angeles Times about this back-door attack on Medicare:
“The plan on Capitol Hill is to move the Trade Assistance Program expansion in tandem with fast-track approval of the Trans-Pacific Partnership trade deal, possibly as early as this week. We explained earlier the dangers of the fast-track approval of this immense and largely secret trade deal. But the linkage with the assistance program adds a new layer of political connivance: Congressional Democrats demanded the expansion of the Trade Assistance Program, Congressional Republicans apparently found the money in Medicare, and the Obama White House, which should be howling in protest, has remained silent.
Medicare advocates have taken up the slack by raising the alarm. "To take this cut and apply it to something completely unrelated sets a terrible precedent," Max Richtman, head of the National Committee to Preserve Social Security and Medicare, told me.
The Medicare raid was so stealthy that critics in Congress, including members of the Congressional Progressive Caucus, are just now gearing up to oppose it. "It was sort of buried" in the bill, Rep. Keith Ellison (D-Minn.), the caucus co-chair, told me Monday.”
Funding the Trade Assistance Program is necessary to help Americans workers expected to lose their jobs because of this trade deal receive job training and assistance. However, telling American workers they have to trade away health care benefits in their retirement in order to get job training when they lose their job now is incredibly mercenary, even by Washington standards.
This isn’t the first time Medicare has been Congress’ piggy bank. This move follows last year’s vote to extend the Medicare sequester cuts into 2024 to cover a reversal of cost-of-living cuts to veterans' pension benefits. Shifting Medicare funds to other programs seems to be Congress’ new go-to budget approach. That’s pretty ironic given that the GOP has spent millions of campaign dollars claiming Obamacare cut Medicare benefits (which is didn’t):
“This is different from the $700-billion cost reduction in Medicare enacted via the Affordable Care Act. That includes efforts to make the program more efficient by improving the incentives governing how doctors and hospitals deliver care to their patients, along with reductions in payments to Medicare Advantage plans. Richtman points out that much of this amounts to a reallocation within Medicare -- "it's piled back into the program by paying for improvements in preventive care, closing the 'doughnut' hole in Medicare Part D (the prescription drug benefit)" and other measures. In the broadest sense, the cost reductions in Medicare are netted against other healthcare costs within the Affordable Care Act.
By contrast, the new proposal would take $700 million out of Medicare, period. Nothing in the TAA will help Medicare function better, augment its services to members, or cover healthcare costs. Slicing into physician and hospital reimbursements may have the opposite effect, by reducing members' access to care. "I'd characterize this as money stolen from Medicare," Richtman says.”
We recommend you read Michael Hiltzik’s entire story at the Los Angeles Times
In keeping with every GOP budget passed over many years, benefit cuts for average Americans and tax cuts for the wealthy rule the day. The Senate this week will pass the Budget Conference Report (it only needs a majority, which the GOP now has) including massive benefit cuts for seniors in Medicare.
National Committee policy staff has laid out what this Budget bill means for seniors in our letter to the Senate:
The conference agreement would be devastating to today's seniors and future retirees, people with disabilities and children due to the proposed changes it makes to Medicare, Medicaid and the Affordable Care Act. While it proposes huge cuts to our social insurance safety net, the conference report would give massive tax cuts to the very wealthy.
The conference agreement assumes the privatization of Medicare and achieves savings by shifting costs to Medicare beneficiaries. Beginning in 2024, when people become eligible for Medicare they would not enroll in the current traditional Medicare program which provides guaranteed benefits. Rather they would receive a voucher, also referred to as a premium support payment, to be used to purchase private health insurance or traditional Medicare through a Medicare Exchange. The amount of the voucher would be determined each year when private health insurance plans and traditional Medicare participate in a competitive bidding process. Seniors choosing a plan costing more than the average amount determined through competitive bidding would be required to pay the difference between the voucher and the plan's premium. In some geographic areas, traditional Medicare could be more expensive. This would make it harder for seniors, particularly lower-income beneficiaries, to choose their own doctors if their only affordable options are private plans that have limited provider networks. Wealthier Medicare beneficiaries would be required to pay a greater share of their premiums than lower-income seniors.
The plan to end traditional Medicare requires private plans participating in the Medicare Exchange to offer insurance to all Medicare beneficiaries. However, it is likely that plans could tailor their benefits to attract the youngest and healthiest seniors and still be at least actuarially equivalent to the benefit package provided by fee-for-service Medicare. This would leave traditional Medicare with older and sicker beneficiaries. Their higher health costs would lead to higher premiums that people would be unable or unwilling to pay, resulting in a death spiral for traditional Medicare. This would adversely impact people age 55 and older, including people currently enrolled in traditional Medicare, despite the conference agreement’s assertion that nothing will change for them.
The conference report threatens to shift costs to Medicare beneficiaries. S. Con. Res. 11 contains $431 billion over ten years in unnamed Medicare cuts. Over half of Medicare beneficiaries had incomes below $23,500 per year in 2013, and they are already paying 23 percent of their average Social Security check for Parts B and D cost-sharing in addition to paying for health services not covered by Medicare. When coupled with requirements to shift costs to beneficiaries in the Medicare Access and CHIP Reauthorization Act of 2015 (P.L. 114-10), the unspecified Medicare benefit cuts included in the conference agreement would be burdensome to millions of seniors and people with disabilities.
In addition, the conference agreement calls for repealing provisions in the Affordable Care Act (ACA), which would make health insurance inaccessible for seniors age 64 and younger. Without the guarantees in the ACA, such as requiring insurance companies to cover people with pre-existing medical conditions and to limit age rating, younger seniors may not be able to purchase or afford private health insurance.
Repealing the ACA would also take away improvements already in place for Medicare beneficiaries – closing the Medicare Part D coverage gap, known as the "donut hole"; providing preventive screenings and services without out-of-pocket costs; and providing annual wellness exams. The Centers for Medicare and Medicaid Services recently reported that since the passage of the ACA, over 9.4 million Medicare beneficiaries in the Medicare Part D donut hole have saved $15 billion on their prescription drugs, an average of $1,595 per person. An estimated 39 million people with Medicare took advantage of at least one preventive service with no cost sharing in 2014.
The agreement includes reductions to Medicaid funding that would affect low-income seniors. Medicaid provides funding for health care to help the most vulnerable Americans, including low-income seniors, people with disabilities, children and some families. The conference report would end the current joint federal/state financing partnership and replace it with fixed dollar amount block grants, giving states less money than they would receive under current law. In exchange, states would have additional flexibility to design and manage their Medicaid programs. The proposed block grants would cut federal Medicaid spending by $500 billion over the next 10 years. Giving states greater flexibility in managing and designing their programs in no way compensates for the significant reductions that beneficiaries, including nursing home residents and their families, could face by turning Medicaid into block grants.
The conference report also would repeal the Medicaid expansion in the ACA. Beginning in 2014, states have had the option to receive federal funding to expand Medicaid coverage to uninsured adults with incomes up to 138 percent of the federal poverty level ($16,242 for an individual in 2015). Over half of the states have expanded their Medicaid programs, and some others will likely participate in the future. The conference agreement would hurt states and low-income individuals by repealing Medicaid expansion, taking away $900 billion from the program over 10 years. Altogether, S. Con. Res. 11 cuts the Medicaid program by more than $1.4 trillion over 10 years, compared to current law.
Moreover, the conference agreement puts 11 million severely disabled Social Security Disability Insurance (SSDI) beneficiaries at risk of a 20 percent benefit cut next year by reaffirming a House rule requiring legislation to address the financing of the SSDI program be accompanied by revenue increases or much more likely benefit cuts. That’s why the National Committee urges the Senate to reject the House’s SSDI recommendations in the conference report and instead make a modest reallocation of Social Security payroll taxes from the retirement trust fund to the Disability Insurance Trust Fund as has been done 11 times in the past on a bipartisan basis.
The National Committee urges you to oppose the Conference Report on the FY 2016 Budget Resolution, which would be harmful to seniors, people with disabilities and children."
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