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Will the Debt Ceiling Vote Take Social Security Hostage?

In a few short months, Congress will have to vote to raise the federal debt ceiling limit. This is a critical measure that must pass so the U.S. can borrow money to pay interest on what it already owes investors or to fund new spending. Treasury Secretary Timothy Geithner said in a letter to Congress Thursday that even a short-term default could be "catastrophic." It would drive up interest rates and cause stock market and housing prices to plummet making future government borrowing more expensive.
“Failure to increase the limit would be deeply irresponsible,” Mr. Geithner wrote, and added: “It is important to emphasize that changing the debt limit does not alter or increase the obligations we have as a nation; it simply permits the Treasury to fund those obligations Congress has already established” — under presidents and Congresses of both parties.
Although this vote should be a no-brainer, some Republicans in the House of Representatives and the Senate, say they will not vote for this increase unless spending cuts are offered. To be specific, they want cuts in Social Security. Sen. Lindsey Graham (R-SC) made his intentions clear on NBC’s Meet the Press:
This is an opportunity to make sure the government is changing its spending ways. I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long-term debt obligations starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means-tests for benefits.
Although some will frame their proposed changes to Social Security as necessary “reform” to make Social Security solvent, one has to question why they are pushing for these changes now, when Social Security is $2.6 trillion in surplus. What’s even more concerning is the increasing bipartisan support so cut Social Security. Even Chairman of the Senate Budget Committee, Sen.  Kent Conrad (D-ND), has signaled he would like to see deficit reduction and Social Security changes like the cuts offered in the National Commission on Fiscal Responsibility and Reform co-chair proposal. These cuts include raising the retirement age, reducing COLA and means testing benefits for middle income Americans. Although these are harmful proposals that would undermine Social Security, Conrad recently wrote an OpEd for Politico, praising these “reforms:”
Savings in Social Security were used only for extending the program’s solvency — not for deficit reduction. And critical provisions were added to strengthen the safety net and protect the most vulnerable seniors and the disabled. The commission’s work demonstrates that it is possible to both bolster the Social Security safety net and restore the program’s trust funds to sustainable solvency over the long run, says Conrad.
This bipartisan effort to reduce the deficit with all spending on the table, including Social Security and Medicare, has also been picked up by a group of Senators who meet behind closed doors. Sen. Saxby Chambliss (R-GA) and Sen. Mark Warner (D-VA) have spearheaded this effort, reiterating no program is safe from cuts:
Both Chambliss and Warner say nothing is off-limits as they consider ways to fix the federal budget -- including possible increases in the Social Security retirement age, cuts in Medicare benefits and a complete overhaul of the federal tax code.  
With so much at stake, it’s important we make our voices loud and clear on this issue. Americans of all ages and political parties reject Social Security cuts. We need to remind our representatives in Congress and the Senate that Social Security is a promise to the American people that should not be broken. Send an E-card to leaders in the Senate and House, “Hands off Social Security!” or send a letter “Social Security Did Not Cause Our Budget Mess” through our legislative action center.

Turning Back the Clock on Medicare Improvements

The 112th Congress brought a lot of new faces to the Capitol along with some not- so-new ideas about taxes, spending and health care. House Speaker John Boehner intends to repeal the Affordable Care Act as his “number one priority,” which would be a terrible blow for seniors on Medicare. Although House Republicans like Boehner claim our deficit is unsustainable, they have no problem supporting a repeal that would add $230 billion to the deficit over the next 10 years. Not only is a repeal fiscally irresponsible, it takes away crucial Medicare improvements for seniors in the new law. These changes include:
  • Improving Medicare’s fiscal health and extending the solvency of the Medicare Trust Fund.
  • Closing Medicare’s “doughnut hole” drug coverage gap for all beneficiaries.
  • Eliminating wasteful subsidies to private insurers
  • Eliminating cost-sharing for preventive services and adding coverage for a new annual wellness visit.
  • Establishing new service delivery systems that focus on coordination of care, which studies show can reduce health care expenditures, improve quality of care and enhance health outcomes.
  • Strengthening the fight against fraud, waste and abuse.
  • Providing new Medicaid options to allow older people with chronic conditions to live at home rather than in institutions.
  • Allowing all Americans to remain in their homes as they age by establishing the CLASS program to help pay for long-term services and supports.
The Leadership Council of Aging Organizations (LCAO), chaired by NCPSSM President and CEO Barbara Kennelly, sent a letter to Congress on Wednesday urging Representatives to reject a repeal of health care reform:
 Millions of Americans have already benefited from provisions of the Affordable Care Act, including millions of seniors who received $250 towards the cost of their prescription drugs when they entered the Part D doughnut hole. The economic and physical health of seniors and their families will continue to benefit as the law is implemented further. We urge you not to deprive them of the protections created by the Affordable Care Act, and to vote against repeal.
Learn more about the Affordable Care Act’s Medicare improvements in our video: Health Reform and Seniors

Robbing the Poor to Feed the Rich

It’s curious how quickly some in Washington have amnesia when it comes to discussing our nation’s deficit. Fiscal hawks in the House and Senate, who were adamant about extending Bush’s tax cuts for the rich (which would increase the deficit by more than $700 billion over the next two years) now insist they want to “get serious” about the deficit by cutting Social Security. Very curious, indeed. Ignoring the fact that Social Security has a $2.6 trillion surplus and does not contribute to the deficit, fiscal hawks like Sen. Lindsey Graham (R-SC) are already on record saying they refuse to vote on raising the debt ceiling in March, without significant cuts to Social Security. Raising the debt ceiling is necessary to avoid economic disaster and default on U.S. debt obligations. Despite this, Graham still wants to take Social Security hostage:
The U.S. will likely need to increase its debt ceiling this spring, and Congress blocking that would be very bad for the country, Graham said. “To not raise the debt ceiling could be a default of the United States’ bond and Treasury obligations,” he said. “But this is an opportunity to make sure the government is changing its spending ways. I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long-term debt obligations, starting with Social Security.” Making Social Security solvent will likely require raising the age when benefits can be taken and testing individuals for whether they financially need to tap the system, he said. That test should also apply for Medicare Part D, the prescription drug program.
As the new Republican majority House of Representatives readies for 2011, all reports say the focus will be on austerity and spending cuts. Brian Reidl, of the conservative Heritage Foundation, has outlined a deficit reduction plan for House Republicans to consider, that would cut Social Security.
“The difficulty for Republicans is that they’re concentrating their cuts in a small sliver of the budget,” Mr. Riedl said. “They should also be addressing large entitlement programs, such as Medicare and Social Security, which are the main source of our budget problems. Cutting $100 billion from these other programs isn’t just a matter of eliminating waste, fraud and abuse. It will involve real cuts in real programs.”
The threats to Social Security are real. Despite the fact most Americans have not recovered from the recession and suffered serious losses in their 401(k)s and savings, some in Washington still would take away what little economic cushion lower and middle income workers have left for their future. This is why the National Committee to Preserve Social Security and Medicare will start a new radio ad campaign tomorrow, when the 112th Congress convenes, reminding our representatives “Hands Off Social Security!” If you want to send a reminder of your own, use the National Committee’s E-Card, which can be sent to Senate Majority Leader Harry Reid, Speaker of the House John Boehner, Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi.

Happy Holidays…Will 2011 be a Brighter New Year?

It’s a natural tendency to look back at the end of each year to take stock of what’s been and then look forward to what will be.  For many American seniors, that exercise will inevitably lead to relief (Whew, we made it through 2010) and trepidation (Will next year be just a difficult?). A new survey from the Pew Research Center reports America’s largest generation, Baby Boomers, are pretty downbeat—even more so than other adults—about the future.
Boomers are also more downbeat than other adults about the long-term trajectory of their lives -- and their children's. Some 21% say their own standard of living is lower than their parents' was at the age they are now; among all non-Boomer adults, just 14% feel this way, according to a May 2010 Pew Research survey. The same survey found that 34% of Boomers believe their own children will not enjoy as good a standard of living as they themselves have now; by contrast, just 21% of non-Boomers say the same.2 Economically, Boomers are the most likely among all age groups to say they lost money on investments since the Great Recession began. Baby Boomers also are the most likely (57%) to say their household finances have worsened. And a higher share of Boomers than older Americans (but not younger ones) say they have cut spending in the past year. Among those Baby Boomers ages 50 to 61 who are approaching the end of their working years, six-in-ten say they may have to postpone retirement. According to employment statistics, the older workforce is growing more rapidly than the younger workforce.
And if Washington fiscal hawks have their way in the New Year, future generations of Americans will face even longer work lives and less Social Security benefits in their retirement, meaning even more economic uncertainty than workers and retirees are facing now.  Hard to imagine, right? This is not the kind of future working Americans have dreamed for themselves or their children. That’s why the National Committee will mark the New Year with a new campaign to remind Washington that cutting Social Security benefits is NOT fiscal responsibility.  We’ll mobilize our members and advocates as part of our  National Committee Truth Squad to ensure the White House and Congress understands cutting benefits for millions of middle-class Americans under the guise of deficit reduction is simply not an option. We’ll have more details about our 2011 Social Security campaign the first week of January.  Until then…

Happy Holidays from the National Committee!

A Holiday Only Scrooge Could Enjoy

Charles Dickens' Ebenezer Scrooge feared the Ghost of Christmas Future more than any other he'd met during his long Christmas Eve night. I can relate. After watching congressional passage of the White House-Republican negotiated tax deal, I, too, fear for the future. I fear this tax package is the first step toward radical changes to Social Security that will impact generations of working Americans. While some elements in the tax package provide desperately needed stimulus for millions of Americans - including far too many who are suffering near-Dickensian levels of poverty and fear - this deal also diverts $112 billion in contributions from Social Security. A "tax holiday" may sound like a wonderful gift for workers now, however this one is wrapped in Washington promises that could turn out to be as thin as tissue paper. As we've seen in Congress these days, it's easy to enact tax cuts but virtually impossible to allow them to expire. This payroll tax holiday proposal will be no different. Election year politics in 2012 will likely doom the expiration of this $112 billion tax cut because when this "tax holiday" is ready to expire next Christmas, restoring Social Security's funding will be portrayed by those opposed to the program as an enormous tax increase, rather than the legislated end of the "holiday." Retirees and their families will watch helplessly as Social Security becomes dependent on general fund revenues rather than worker contributions, which have successfully funded the program for 75 years. Proposals like this threaten the program's independence at this time of unprecedented deficits, forcing Social Security to compete for limited federal dollars. If made permanent, this payroll tax cut would then double Social Security's 75-year projected shortfall, a gap denounced by the president's own fiscal commission. Conservatives have long dreamed of a payroll tax holiday because it fulfills two ideological goals: lower taxes and weakening Social Security's finances. Former Bush presidential spokesman Dan Bartlett described the Republicans' tax cut trap this way: "We knew that, politically, once you get (a big tax cut) into law, it becomes almost impossible to remove it. That's not a bad legacy. The fact that we were able to lay the trap does feel pretty good, to tell you the truth." Passage of this tax deal now sets the table for another round of "negotiations" that target Social Security for further cuts. Some fiscal hawks are prepared to oppose raising the debt ceiling next year if they don't get Social Security benefit cuts like those proposed by the fiscal commission. That means the new year will bring another opportunity for Social Security to be held hostage in another "Let's Make a Deal"-style "negotiation" in Washington. The American people have made it clear they do not support trading the long-term prospects of our nation's premier retirement income program for short-term gains. Promises that the diversion of $112 billion in Social Security contributions will be temporary are promises the American people must ensure Congress keeps. Tax cuts for millionaires, reduced contributions to Social Security and benefit cuts for generations of Americans - it's no wonder so many look to Washington and say, "Bah, humbug." Barbara B. Kennelly is the president and CEO of the National Committee to Preserve Social Security and Medicare and a former member of Congress. This article appeared on page A - 18 of the San Francisco Chronicle



   

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