*a copy of this letter was also sent to the House of Representatives

December 18, 2017

United States Senate
Washington, DC  20510

Dear Senator:

On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am writing to urge you to vote against the conference agreement on tax legislation because it would result in cuts to Medicare, and inevitably Medicaid and Social Security.

The Conference Agreement Results in an Immediate $25 Billion Cut in Medicare Spending

The Fiscal Year 2018 Budget Resolution allows $1.5 trillion of the nearly $6 trillion tax bill not to be offset. Since this legislation would increase the budget deficit by over $1.5 trillion, the Congressional Budget Office has written that the conference agreement would trigger $136 billion in automatic spending cuts to mandatory programs in the current fiscal year, including a $25 billion reduction to Medicare, as required by the Statutory Pay-As-You-Go Act of 2010 (PAYGO).  At a minimum, the National Committee urges Congress to waive the tax bill’s impact on the PAYGO scorecard.  Without including a waiver in this legislation, a vote for the conference agreement is a vote for an immediate $25 billon cut in Medicare spending.

Exploding the Budget Deficit Will Lead to Middle-Class Benefit Cuts

However, even if PAYGO is waived, this legislation would leave Medicare, Medicaid and Social Security vulnerable to benefit cuts because of its dramatic increase in the public debt – an increase that will have to be offset in the future.  Inevitably, older Americans and people with disabilities will be forced to pay a heavy price for this irresponsible legislation.

The day after the Senate tax bill was approved, Senator Marco Rubio said that the legislation was just the first step before “…instituting structural changes to Social Security and Medicare…” benefits to reduce the federal deficit.  Similarly, House Speaker Paul Ryan recently said that “we’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit.”  In other words, the majority leadership will seek cuts to Medicare, Medicaid and Social Security benefits as the next step to pay for the deficits this tax bill will create.

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 Parts B and D out-of-pocket costs for premiums and cost-sharing amounts.

Making Seniors Pay More for Health Care and Reducing Access to Long-Term Care

Regarding Medicaid, middle-class Americans often rely on the program for long-term services and supports when they exhaust their savings.  Nearly two-thirds of all nursing home residents’ care is financed in whole or in part by Medicaid.  In addition, Medicaid provides home and community-based services that allow seniors to stay in their homes.  The fiscal crisis created by the tax bill is likely to result in a trillion-dollar cut to Medicaid that will limit seniors’ access to long-term care services.

Repealing the Individual Mandate Undermines Health Security, Particularly for Older Adults

In addition, the conference agreement would undermine the health security of seniors not yet eligible for Medicare by repealing the Affordable Care Act’s (ACA) individual mandate.  That would raise ACA marketplace plan premiums for older adults age 50-64 by an average of $1,500 in 2019, destabilize the individual health insurance market – prompting some insurance carriers to stop offering coverage – and, according to the CBO, increase the number of uninsured by 13 million people.

Chained CPI Hikes Taxes and Makes Social Security Vulnerable to COLA Cuts

The National Committee also opposes a provision in the conference agreement that would move to a slower growth “chained” Consumer Price Index (CPI) to calculate increases in tax brackets and the standard deduction.  Replacing the current Consumer Price Index (CPI-U) with the chained CPI would result in higher taxes for all Americans, including seniors.

What’s more, if tax legislation requires that the chained CPI be used to index increases in tax brackets and deductions, supporters of cutting Social Security are likely to use this precedent to demand that the chained CPI is also used to determine Social Security and Military and Federal Civilian Retirement cost-of-living adjustments (COLA).  As a result, the COLAs of current and future beneficiaries would be cut.

According to the Chief Actuary of the Social Security Administration, three years after becoming law, calculating the COLA based on the chained CPI would decrease Social Security benefits by about $130 per year (0.9 percent) for a typical 65-year-old.  By the time that senior reaches 95, the annual benefit cut would be almost $1,400, a 9.2 percent reduction from currently scheduled benefits.

Oppose Tax Bill

The conference agreement on the tax bill will trigger an immediate $25 billion cut in Medicare spending and will inevitably lead to the unraveling of working and middle-class programs to pay for massive tax cuts for the very wealthy and profitable corporations.  That’s why the National Committee urges all Senators to oppose this “Robin Hood-in-Reverse” tax bill and instead work together to protect the retirement and health security commitments made to generations of Americans.


Max Richtman
President and CEO