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From the category archives: entitlement reform

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.


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. 

House GOP Recklessly Pursues Privatization of Medicare in Budget Process

Congress is targeting the health and financial well-being of America’s seniors by making yet another attempt to privatize Medicare.   Yesterday the House Budget Committee passed the GOP’s FY 2018 budget resolution, which includes Speaker Paul Ryan’s “Medicare premium support” scheme – an innocuous name for turning time-tested senior health care coverage into “Coupon-Care.”  

The House budget blueprint slashes nearly $500 billion from Medicare over ten years and raises the eligibility age from 65 to 67 – along with gutting Medicaid and other social safety net programs for needy seniors.  

The Associated Press had a pithy summary of the painful cuts that the GOP proposes in its new budget:

“The plan, in theory at least, promises to balance the budget through unprecedented and unworkable cuts across the budget. It calls for turning this year's projected $700 billion or so deficit into a tiny $9 billion surplus by 2027. It would do so by slashing $5.4 trillion over the coming decade, including almost $500 billion from Medicare, $1.5 trillion from Medicaid and the Obama health law, along with enormous cuts to benefits such as federal employee pensions, food stamps, and tax credits for the working poor.” – Associated Press, 7/18/17

 National Committee President Max Richtman says that converting Medicare into a voucher program is an existential threat to the program itself. 

 “Over time, giving seniors vouchers to purchase health insurance would dramatically increase their out of pocket costs since the fixed amount of the voucher is unlikely to keep up with the rising costs of health care. And, as healthier seniors choose less costly private plans, the sicker and poorer seniors would remain in traditional Medicare, leading to untenable costs, diminished coverage, and an eventual demise of traditional Medicare, plain and simple.” – Max Richtman, NCPSSM President

Of course, raising the Medicare eligibility age from 65 to 67 as the House spending plan also proposes, is in itself a drastic benefit cut.

Undermining Medicare has been a long-held dream of fiscal conservatives. Their “premium support” proposal is a thinly veiled scheme to allow traditional Medicare to “wither on the vine,” as former House Speaker Newt Gingrich once put it.

Privatization is being sold as “improving customer choice,” but based on the way current Medicare Advantage plans work, private insurance will continue to offer fewer choices of doctors than traditional Medicare does.  If traditional Medicare is allowed to shrink and collapse, choice will disappear, too.

“Weakening Medicare is a politically perilous path for Republicans.  Recent polling indicates that large majorities of Americans across party lines prefer that Medicare be kept the way it is, not to mention that President Trump repeatedly promised to protect the program during the 2016 campaign.” – Max Richtman, NCPSSM President

Meanwhile, the National Committee strongly condemns other priorities of the House Republican budget resolution, as well.  The GOP budget resolution will mean: 

*Hundreds of billions in painful cuts to Medicaid, which seniors depend on for long-term care services and supports.

*Reaffirmation of a House rule that puts 11 million Social Security Disability Insurance (SSDI) beneficiaries at risk of a 7% benefit cut in 2028.

*Reductions to SSI (Supplemental Security Insurance), which provides cash assistance to low-income seniors and people with disabilities.

 *Caps on non-defense spending that will likely lead to devastating cuts to Older Americans Act programs and the Social Security Administration (SSA) operating budget.

 *Slashing of programs that benefit our nation’s veterans and deep cuts to spending on medical research (including cancer, diabetes, heart disease, and other conditions afflicting the elderly).

The savings from these devastating cuts will likely go to tax breaks for the wealthy.  Last year’s House Republican tax plan gave 99.6% of its benefits to the top one-percent of earners, with virtually nothing for middle and low income Americans.

 

 

Massachusetts Congressman is an Unassuming, Unrelenting Champion of Social Security

This morning National Committee President Max Richtman interviewed a real fighter for Social Security and Medicare on Facebook Live from Capitol Hill – Congressman Richard Neal (D-MA-1). 

The Congressman, who the Boston Globe called “an unassuming everyday guy from Western Massachusetts,” has a unique vantage point on seniors’ issues.  He is the ranking member of the powerful House Ways and Means Committee, which oversees (among other things) Social Security, Medicare, Medicaid, and taxes.  He assumed the post just before President Trump arrived in Washington, and has become a key point person against a Republican assault on these programs.

Neal is a true believer in Social Security, partly because he grew up with it.  He and his sisters were raised by an aunt in Springfield, MA after their parents died, and relied on Social Security survivors’ benefits to make ends meet and remain under one roof.  “Social Security allowed us to live as a family, and I’ve never forgotten that,” Neal told Max Richtman.

The Congressman is determined that Social Security be preserved for future generations – without benefit cuts – as a singular form of retirement insurance.  “You can outlive an annuity.  You cannot outlive Social Security,” he said on Facebook Live.  “That’s the guarantee.  That’s the genius of Mr. Roosevelt’s program.”  (Social Security was signed into law in 1935 by President Franklin D. Roosevelt, father of National Committee founder James Roosevelt, Sr.)

Social Security, Neal says, gives American families a modicum of financial predictability for their senior years.  He told the Globe that Social Security “is the reason Mom and Dad aren’t living in your attic.”

Neal is co-sponsoring Connecticut Rep. John Larson’s Social Security 2100 Act – one of the Democrats’ resounding replies to Republican schemes to shrink the program.  Larson’s bill keeps Social Security solvent for decades without cutting benefits.  In fact, The Social Security 2100 Act modestly increases benefits.  Rep. Neal admits that the bill probably won’t go very far while Republicans control Congress.  But he says the legislation “invites fresh thinking about how to encourage growth in Social Security.”

Meanwhile, the Congressman vehemently opposes a bill from House Social Security Subcommittee Chairman Sam Johnson (R-TX) that would do the opposite of Larson’s – reducing cost-of-living adjustments, raising the retirement age to 69 and cutting the benefit-computation formula. All of this, Neal says, would amount to a 30% cut in benefits for middle-class retirees.

Neal shoots down conservative arguments that Americans’ increasing longevity justifies raising the retirement age.  Without Social Security, nearly half of our nation’s seniors would live in poverty – all the more reason, Neal says, not to pull the rug from under retirees by delaying eligibility for benefits.  “We applaud each other regularly for increases in life expectancy in America,” says Neal.  “But all that means is that we have to reinforce the guarantees that Social Security provides.”

Paul Ryan's Medicare Privatization Scheme Edging Closer to Reality

Paul Ryan’s dystopian dream of privatizing Medicare may soon come true.  At least he seems to think so.  In an interview with right-wing Wisconsin radio host Vicki McKenna, the House Speaker said that Medicare “reform” is coming to the Capitol this Spring.  “I’m pretty sure the budget committee in the House will pass that on in the House Republican budget,” Ryan said.  In fact, House Budget Committee Chair Diane Black (R-TN) has already promised to include Medicare privatization in the budget resolution next month.  This is scary news for millions of current and future retirees.

To justify his Scrooge-like assault on Medicare, Ryan continues to perpetuate the myth that Medicare is an “entitlement.”  In fact, it is a remarkably efficient social insurance program.  Having paid into it their entire working lives, Americans are counting on having affordable health care coverage to protect them upon retirement.  Why does Paul Ryan want to take that away, effectively reneging on the nation's commitment to current and future retirees? 

In the past, President Obama stood as an impenetrable barrier between Ryan and his privatization scheme.  Though candidate Trump promised “not to touch” Medicare, the President has already broken that pledge by supporting the GOP healthcare plan, which shortens the solvency of the program.   Despite Trump’s campaign promises, his budget director refused to publicly discourage Congress from privatizing Medicare.  In fact, Speaker Ryan said in his radio interview that he and the Trump administration are having “an ongoing conversation” about it. Current and future retirees clearly cannot trust this White House to protect their Medicare benefits, which they have paid for during their entire working lives.

As we discussed on our "Behind the Headlines" Facebook Live broadcast Thursday, here is what Ryan’s insidious “reform” would do:  Instead of receiving guaranteed benefits, all Medicare participants would be given vouchers to help pay premiums for traditional Medicare or private health insurance.   In either case, the vouchers would not be able to keep up with rising health care costs, leaving seniors to cover the difference out of their own pockets.  That’s why we call the voucher program “coupon care.” 

Ryan's plan would likely drive healthier, younger and wealthier seniors toward private insurance. Poorer and sicker seniors would remain in traditional Medicare, driving up costs until the program collapsed under its own weight.  But that’s not all.  Ryan also wants to hike the Medicare eligibility age from 65 to 67.  This in itself is a massive benefit cut, as 65 and 66 year olds would have to buy private insurance on their own dime. Those who couldn’t afford it might go without health insurance entirely. In a recent National Committee poll, 65% of likely voters opposed raising the eligibility age.  Among younger voters, the opposition was even stronger.

As Ryan predicts, Medicare privatization will likely pass the House as part of the Republican budget resolution.  Its future in the Senate is less certain, but too close for comfort.  Senate Republican leaders need only 50 votes to wreck Medicare.  The National Committee is building a “firewall” of moderate GOP Senators who we believe can be convinced to protect Medicare.  With an unpredictable President in the White House, that is the best way – along with vocal grassroots activism – to defend current and future retirees against the destruction of a program that has worked effectively for more than 50 years, and enjoys enduring public support.

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