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Don’t Forget Social Security and Medicare

bbk-headshot_captionWe’re at a very important legislative crossroads on Capitol Hill.  Congress is about to make another attempt at health care reform, a Presidential Commission has been appointed which will target Social Security and Medicare for cuts while at the same time Americans are still struggling in this difficult economy.  I went to the Senate today and talked to the Democratic Steering Committee about the challenges ahead and about how important it is to remember the vital role Social Security and Medicare continue to play for millions of Americans...especially during this recession.  I’ve posted my remarks here: 
"First, health care reform.  We are at a crossroads – a moment when history can be made.  You have an opportunity to provide health insurance to millions without it and to help millions to be able to afford the health care they already have.  I represent seniors across these United States.   I spent the last year talking to seniors & will continue to educate seniors about the importance of health care reform and especially how important it is to the future of Medicare.    Medicare is not sustainable over the long run unless the cost of health care is slowed.  If you don’t pass this bill again the individual beneficiaries and government will not be able to sustain the Medicare program.  The other issue I would like to mention briefly is the Commission President Obama has created by executive order.  The National Committee fought hard against a commission.  I strongly believe in 'regular order' and had real problems with the fast-track process in the original commission. But we have this comission now and we're going to live with it.   I urge you as leaders of the Senate not to put the Commission on autopilot and forget it.  Past Congresses have worked hard to keep SS out of deficit discussions.  They recognized SS is an insurance program workers earned by their hard work & payroll deductions. I just sat through hours of focus groups with people of all ages.  They understand SS is something they paid for and earned.  And they’re counting on it as the basis for their retirement.  The ones that are in their 50s know they need SS as a basic part of their retirement, especially in these economic times.  I was in Congress during the 1983 Commission.  At the time I had a daughter who was still in college.  Today she’s 50 and retirement isn’t so far away any more.  Any changes that are made to SS will need to be phased-in slowly so today’s workers can plan for them.   I strongly urge you to stay in close touch with Commission members.   Urge them to tread very carefully where SS is concerned.   The recommendations they make will affect our nation for generations." 

Debt, Deficits, Social Security and More...

healthcare chartIf you generally skip by budget or economic headlines in favor of something more easily comprehendible, we suggest today you make an exception. Here are excerpts from three articles which together provide must-read perspectives on our debt/deficits,  Social Security and Medicare.   Saul Friedman, Grey Matters columnist, takes former Senator and Debt Commission co-chairman, Alan Simpson, to task for perpetuating the myth that Social Security has anything to do with current budget deficits.
“Social Security’s long term fiscal problem has nothing, absolutely nothing, to do with Social Security's role in the deficit. For, as I have emphasized in my column for years, Social Security costs the budget not one cent-aside from the one percent it spends on its thousands of employees and field offices. Indeed, Social Security helps finance the deficit by loaning the treasury money, for which it earns interest (about $700 million a year.) If what's owed to Social Security must be cut as part of deficit reduction, will that help Social Security? Nevertheless, Simpson's statements help perpetuate the myth among right-wingers that Social Security contributes to the deficit.”
 CEPR economist, Mark Weisbrot, offers this analysis of what’s truly driving our deficit and debt:
 “For the long term, as the CBO has emphasized, the vast majority of the deficit and debt problem is just rapidly-rising health care costs. Of course, we could be like other developed countries and have universal health care, and pay about half of what we are now paying per person. That is the average for the other high-income countries. This would take care of our long-term federal debt problems. Another significant contributor to our long-term debt is the military. On an annual basis, we spent 5.0 percent of GDP on just the Defense Department budget last year. Before 9/11, the CBO had projected just 2.4 percent for 2009. The difference is more than twice the long-term shortfall in our Social Security system, and it is based on an understatement of military spending. Maybe we need to focus on protecting our airports from already existing terrorists rather than recruiting more by occupying foreign countries. Maybe we don't need hundreds of military bases all over the world. But thanks to the power of what President Eisenhower famously named the "military industrial complex," President Obama has exempted the military from any spending freeze. Thanks to the two most powerful lobbies in Congress -- insurance and pharmaceutical -- getting health care costs under control is still a distant dream. And then there's the people who make the nation's major economic decisions and actually brought us this mess - Goldman Sachs and their Wall Street friends: they want to put Social Security on the chopping block to pay for their crimes (and bonuses). Anybody see a pattern here? It's not the debt that threatens our future.” 
So, ultimately this brings us back around to health care reform.  The New York Times details the “Cost of Doing Nothing in Health Care”:
 “Hands off my health care,” goes one strain of populist sentiment. But what if?   Suppose Congress and President Obama fail to overhaul the system now, or just tinker around the edges, or start over, as the Republicans propose — despite the Democrats’ latest and possibly last big push that began last week at a marathon televised forum in Washington. Then “my health care” stays the same, right? Far from it, health policy analysts and economists of nearly every ideological persuasion agree. The unrelenting rise in medical costs is likely to wreak havoc within the system and beyond it, and pretty much everyone will be affected, directly or indirectly. “People think if we do nothing, we will have what we have now,” said Karen Davis, the president of the Commonwealth Fund, a nonprofit health care research group in New York. “In fact, what we will have is a substantial deterioration in what we have.” Nearly every mainstream analysis calls for medical costs to continue to climb over the next decade, outpacing the growth in the overall economy and certainly increasing faster than the average paycheck. Those higher costs will translate into higher premiums, which will mean fewer individuals and businesses will be able to afford insurance coverage. More of everyone’s dollar will go to health care, and government programs like Medicare and Medicaid will struggle to find the money to operate.
So when someone tells you health care reform is bad for Medicare remember that without it, Medicare will face devastating reforms as budget cutters look for savings in federal spending even though system wide costs will continue to skyrocket unchecked.  And when someone tells you Social Security is to blame for our deficits, remind them its American workers who fund Social Security NOT the federal government.  In fact, the $2.5 trillion dollar surplus improved our federal debt picture throughout the past decade of borrow and spend policies.

“No” is NOT an Option for Seniors in Medicare

NOWhile “just say no” is a popular political slogan and now even a Congressional strategy for some in Washington, the effects of saying no to health care reform will be felt much sooner than later for millions of American seniors.  Starting Monday, doctors serving patients in Medicare will face a 21% pay cut because the so-called “doc fix” was just one of many reforms lost when healthcare reform was shelved.    Current law says reimbursement rates for doctors must be based on a formula tied to the economy’s health.  A “doc fix” was included in health care reform legislation to provide a longer-term solution rather than the annual rite of temporary fixes. However, no health care reform has meant no doc fix of any kind.  Now physicians have to decide, take the 21% pay cut or close their practices to Medicare patients.  CNN reports on the American Medical Association’s response to what this “just say no” approach in health care reform will mean for seniors:  
 "To our physicians, we are providing information on their Medicare participation options, including how to remove themselves from the Medicare program," said James Rohack, president of the American Medical Association.
and according to Dr. Edward Kornel, a New York neurosurgeon: 
Kornel said consumers should prepare for some difficult days ahead. "If doctors drop Medicare patients, these people will be forced to go to clinics where it's hard to get appointments, the waits are long and you get far less attention than you would otherwise get," said Kornel. "I think this situation is headed for disaster."
Democratic leaders in the Senate attached a temporary doc fix to the unemployment legislation due for a vote yesterday.  However, Republican lame-duck Senator Jim Bunning, is blocking that vote from happening.   Modern Healthcare  described it this way: 
Senate Majority Leader Harry Reid (D-Nev.) had fast-tracked legislation meant to temporarily extend a number of expiring provisions, part of which includes the so-called “doc fix,” as well as an extension to COBRA subsidies, unemployment insurance and a host of smaller Medicare items.  Most of those provisions are set to expire at the end of the month. The Democrat-backed bill would allow those provisions to carry on for at least one month at a cost of $9.2 billion. But according to several sources, Republican leaders want to see that the package is fully paid for first. An attempt late last year to pass a longer-term bill that would have effectively scrapped the sustainable growth-rate formula, or SGR, also failed to pass the Senate.
“Just Say No”, “Starve the Beast”, “Keep the government out of my Medicare”... catchy slogans with serious repercussions for America’s seniors.    Pay cuts for doctors and reduced physician access, a growing doughnut hole in Medicare Part D, escalating premiums and cost sharing and ultimately insolvency for a program burdened with the same skyrocketing health care costs seen system wide.  These are the real-world implications of this “just say no” approach and America’s seniors may pay the biggest price for inaction...and soon.

Cutting Social Security Isn't the Answer

The President signed an Executive Order creating a Commission on Fiscal Responsibility and Reform.  There will be 18 members: 6 appointed by the President-2 we already know Co-Chairs former GOP Senator Alan Simpson (Wyoming) and former Clinton chief of staff Erskine Bowles. The Leadership of both parties will also appoint 6 Senators and 6 House members - equally divided between Democrats and Republicans.  Although, the GOP wants taxes taken off the table of any discussion and are threatening to not name anyone. The National Committee has long opposed creation of a commission targeting Social Security and Medicare for cuts to balance the federal books.  Our President/CEO, Barbara Kennelly, issued this statement today:
“President Obama inherited an economic nightmare.  It’s a nightmare America’s seniors are living each and every day thanks to skyrocketing health care costs, no COLA, shrinking home values, decimated savings and a shaky economy.  Seniors and their families want fiscal sanity returned to Washington; however, we should not be considering cuts to the very programs keeping millions afloat during this recovery. Social Security is not to blame for the nation’s fiscal problems and has not contributed one dime to our nation’s bleak debt and deficit picture.  To the contrary, Social Security’s trust fund surplus has been used for years to help balance the federal books.   Our hope is that this Presidential Commission will rise above the political rhetoric, do the right thing, and ensure Social Security does not become a piggy bank to pay for the fiscal failures of the past. The future of generations of Americans depends on it.”

Target: Social Security

Commission targetThere are a number of important blog posts and articles to recommend to anyone who's rightfully concerned about ongoing efforts to reduce our debt & deficits on the back of Social Security.  First, news from Congressional Quarterly on what President Obama's Commission is beginning to look like.  White House staff  "briefed" concerned organizations yesterday but CQ learned more than we did.
"President Obama plans to name former Wyoming Republican Sen. Alan K. Simpson and former Clinton White House Chief of Staff Erskine Bowles as co-chairmen of his deficit commission, according to sources on and off Capitol Hill. The announcement could come as early as Thursday. The White House did not immediately return e-mail messages or phone calls seeking comment.A Democratic congressional aide said the White House has told congressional leaders that Bowles and Simpson have accepted the offer."
Dean Baker offers just one glimpse into Senator Simpson's history with Social Security, namely supporting privatization and COLA cuts:
"It is not good news that President Obama picked former Senator Alan Simpson as one of the co-chairs of his deficit commission. Simpson is not just your run of the mill Republican. He is an extreme foe of Social Security. The plan was to cut the size of the annual COLA to 1 percentage point less than the CPI. This may sound trivial, but it would add up over time. Someone who was retired 5 years would see their benefits cut by roughly 5 percent, 10 years by 10 percent, and 20 years by 20 percent. This is real money."
Over at Daily Kos, New Deal Democrat, offers a lengthy record of candidate Obama and President Obama's comments on Social Security.  While we don't necessarily agree with all of his conclusions, this post does offer a detailed compilation of comments that help provide some context for why we're even having this conversation now. Which is the bottom line question--Why with staggering unemployment facing us for some time to come, investment and savings income still reeling from the market collapse, home values decimated and skyrocketing health care costs eating seniors alive are we looking at cutting the very programs which are keeping millions from poverty?  Especially when, contrary to a billion dollar campaign to persuade us otherwise,  Social Security is not responsible for our debt/deficits. We highly recommend you read the Center for Economic and Policy Research's latest paper, The Budget Deficit Scare Story and the Great Recession , for some perspective on this debate and its potential impact on millions of Americans, young and old alike. **Just in:  please also check out the Center on Budget and Policy Priorities' new deficit analysis, Where Today's Large Deficits Come From.   They say:
"Some critics charge that the new policies pursued by President Obama and the 111th Congress caused the huge federal budget deficits that the nation now faces. In fact, the tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years."



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