United States Senate
Washington, D.C. 20510
Dear Senator:
The National Committee to Preserve Social Security and Medicare, representing millions of older adults, writes in strong opposition to the House approved H.R. 1, the Fiscal Year (FY) 2025 Budget Reconciliation bill because it would result in massive cuts to programs critical to older Americans and their families.
The Budget Reconciliation bill passed by the House by a single-vote margin represents the worst of all worlds: unprecedented cuts to fundamental programs that provide health care and essential services to lower- and moderate-income Americans, all to partially offset the cost of massive tax cuts that primarily benefit the wealthy and large, profitable corporations. It represents an unprecedented transfer of wealth from hard-working, everyday Americans to the uber-wealthy. In addition, while this bill is utilizing a reconciliation process that was designed to make it easier for Congress to reduce budget deficits, it will have the perverse effect of raising deficits by trillions of dollars.
The Congressional Budget Office’s most recent estimate predicts H.R. 1 will add $2.4 trillion to the debt, or nearly $3 trillion once increased interest costs are included. The Committee for a Responsible Federal Budget (CRFB) has estimated H.R. 1 would add about $5 trillion to the debt in the next decade alone if all of the temporary tax cuts are made permanent. Interest costs would double to $1.8 trillion over the next decade. CRFB also predicts the debt would increase by 29 percent by 2034 if the tax cuts are made permanent. Afterall three of the credit agencies have downgraded America’s credit rating, surely this is not a time to make our deficits worse by enacting this bill.
While H.R. 1 does not directly cut Medicare, adding $2.4 trillion to the debt will result in automatic reductions in Medicare spending. That’s because enactment of this bill will trigger Pay-As-You-Go (PAYGO) requirements in federal law which will result in a 4 percent sequestration of Medicare spending starting in 2026.
Many Americans are rightfully concerned that the ultimate goal underlying such a dramatic increase in debt is to starve the nation of revenue as a means of justifying later legislation to cut the earned benefits Americans have paid for throughout their working lives: Social Security and Medicare. Some uber-wealthy individuals, including Elon Musk, have falsely called Social Security a “Ponzi scheme.” Cutting and privatizing this critical program, along with Medicare, has long been a goal of many fiscal conservatives, meaning that if an artificial economic crisis caused by massive tax cuts becomes a reality, it will allow them to wrongly assert that the nation can no longer afford these critical programs.
This is why it is important to emphasize that the decision about whether to enact tax cuts need not be a binary choice. Proponents have claimed that if the full range of Trump tax cuts are not made permanent, lower- and middle-income taxpayers will suffer increases in their tax liability. This is simply not true: Congress could choose to allow the tax cuts for high-income taxpayers and large corporations to expire, while making the remainder permanent. In fact, President Trump himself has suggested raising tax rates for the highest-income Americans – a provision the House leadership opted not to include in this bill.
According to a January 10, 2025 analysis by the Department of Treasury, a full extension of all of the individual and estate tax provisions in the Tax Cuts and Jobs Act of 2017 (TCJA) alone will result in families in the top 0.1 percent – those with cash income of at least $3.5 million for a family of two – receiving benefits that account for 40 percent of the total cost of full extension relative to partial extension.
By comparison, partial extension would simply reverse the TCJA tax cuts for those with incomes above $400,000, or some alternative threshold, and allow the business and estate tax cuts to expire as scheduled under current law. All families below the income thresholds would receive identical tax cuts under either scenario – only high-income and high wealth families would not benefit by the partial extension. Limiting the extension in this manner also reduces the overall revenue loss to less than one-half the cost of extending all of the individual and estate tax cuts and about one-third of the total cost if the business provisions are included.
On the opposite side of the ledger, the spending cuts enshrined in this bill are unprecedented and would result in millions of Americans losing important health care coverage and nutrition services. According to CBO, 16 million Americans will lose their health insurance if H.R. 1 is enacted. Of these 16 million people, nearly 11 million would lose Medicaid coverage (primarily due to new work requirements and eligibility checks), and about 5 million would lose access to Affordable Care Act (ACA) marketplace plans. It is clear, if enacted, H.R. 1 will increase illness, suffering, hunger and personal bankruptcy, while doing nothing to address waste, fraud and abuse.
Medicaid is the nation’s largest health care coverage program, comprising 18 percent of National Health Expenditures (NHE) in 2023. As such, it is a central pillar of the nation’s health care delivery system, providing vital reimbursement for millions of jobs, and essential resources for hospitals, clinics, outpatient surgery centers and much more. In the long-term care sector – crucial for older adults – Medicaid paid more than one-half (61 percent) of total spending in 2022 ($415 billion as calculated by the Kaiser Family Foundation based on NHE data). In the nursing home sector, the impact of severe funding reductions – along with the repeal of the minimum nursing home staffing standards rule – will mean that facilities will further cut nursing staff – in turn leading to 13,000 excess deaths every year.
In a long-lived society, the promise and potential of home care and aging in place — which are priorities for Republicans and Democrats alike — simply cannot be fulfilled without Medicaid. This is illustrated by the fact that Medicaid LTSS accounted for 32 percent of all Medicaid personal health care spending in 2021. LTSS spending that pays for home and community-based services (HCBS) reimbursed by Medicaid has increased from only 10 percent in 1988 to 62 percent in 2020. By comparison, Medicare’s LTSS coverage is sharply limited, paying for some home health services (up to 90 days, but typically for much shorter periods), and up to 90 days of care in a skilled nursing facility (generally following a hospitalization, and with copayments of $210 per day for stays that exceed 20 days).
Expecting states to maintain Medicaid as a reliable source of health care and LTSS coverage if federal funding is slashed is not credible. Significant cuts to federal Medicaid funding would amount to a massive cost-shift to states, forcing them to consider dramatically raising taxes or severely cutting other parts of their budgets — particularly education. Many states would likely make draconian cuts to their Medicaid programs in the areas of eligibility, benefits, and provider and plan payment rates (the latter area already low in many cases). In turn, this will result in large numbers of people with disabilities — who have fought for decades for the opportunity to lead independent lives — without a secure source of health care coverage. This would also harm millions of older adults, many of whom need occasional or daily assistance in the form of home care as they age – and who, without access to HCBS, are more likely to end up in nursing homes, where costs are higher.
The toll on the nation’s 12.5 million dually eligible beneficiaries, who count on Medicaid to pay for (or partially subsidize) their Medicare copayments, deductibles and premiums — and which therefore allow them to access Medicare — could be catastrophic.
Finally, the impact on hospitals and other medical care providers from untreated or undertreated
chronic conditions in medically vulnerable populations would likely fuel higher health care costs, defeating the goal of the Health and Human Services Secretary’s recently announced initiative to shift attention and resources to cost-effective upstream wellness-focused approaches.
Those who claim the cuts to Medicaid are simply efforts to prioritize vulnerable populations by eliminating benefits for able-bodied adults who are simply ‘too lazy’ to work base their claims on the premise that there are tens of millions of healthy working-age adults enrolled in Medicaid who could work but chose not to work. This completely disregards the actual composition of beneficiaries who will have their benefits cut as a result of the expanded work requirements in the Medicaid program.
According to a recent analysis by the Milbank Memorial Fund, Medicaid enrollees classified as able-bodied represent only 15.8 percent of the total nonworking Medicaid population ages 18-64. Four in five of these enrollees (79.2 percent) are women, with an average age of 41. One in four (26 percent) is over age 50. Their median income is zero, and they live in families with annual incomes averaging under $45,000. In other words, the vast majority of these able-bodied enrollees are exceptionally poor women on the older end of the working-age spectrum, who have no income of their own and live in poor families. Most of them worked at one time but left the workforce to care for their families – they are certainly not the healthy young adults ‘just hanging out’ rather than working as the narrative has described.
The work requirements in the bill – to be implemented in December 2026 – would penalize states that are unable to either force these women back into the workforce or prove that their working-age population is either exempt or working. The cost to the states of creating the infrastructure to support these requirements is extremely high, and enrollees often lose their health care not because they could be working but because the red tape required to prove they are either exempt or working is so overwhelming. Sadly, the real goal of this provision is to kick people off Medicaid. Finally, increasing the threshold of the work requirement to age 65 completely ignores the difficulty older Americans have in finding employment if they lose their jobs, even if the loss is through no fault of their own.
In addition to the cuts envisioned for the Medicaid program, H.R. 1 cuts nearly $300 billion from the Supplemental Nutrition Assistance Program (SNAP) through 2034. This represents by far the largest cut to SNAP in history, and would cause millions of Americans to lose some or all of the food assistance they need to afford groceries, when many low-income households are already struggling to afford the high cost of food and other basic needs. In addition to facilitating healthy eating for children and families, SNAP provides monthly financial aid to an estimated 7.2 million older adults according to the National Council on Aging.
SNAP benefits help older adults maintain their independence and for some, can mean the difference between going hungry and enjoying nourishing meals without worry. Regular access to healthy food helps older adults prevent and manage chronic conditions, improve their resistance to illness, maintain strong bones, and lower their falls risk. Having SNAP benefits also frees up extra money for prescriptions, health care costs, and other expenses that improve one’s health. Cutting these benefits for seniors could easily result in higher costs for health care services rather than the budget savings envisioned by proponents.
The bottom line on this budget bill is this: millions of older adults will be harmed in order to help finance more tax cuts for the wealthiest among us and huge corporations, and the resulting increase in the nation’s debt will hurt everyone through higher inflation and a slowing economy. The magnitude of the debt will also provide more ammunition to those who falsely claim our country can no longer afford to meet its obligations to hard working Americans who are counting on their earned benefits through Social Security and Medicare to help support them in retirement and if they become disabled or a survivor.
H.R. 1 is bad for America, and especially bad for older adults and their families. The National Committee to Preserve Social Security and Medicare urges you to oppose taking up the House-passed version of the bill for the sake of your constituents.
Sincerely,
Max Richtman
President and CEO