Aging Groups Consider Obama’s Fiscal 2014 Budget Proposal a “Mixed Bag”

Published in Woonsocket Call, April 21, 2013

President Barack Obama, missing the federal mandated budget submission deadline by over two month, finally unveils his fiscal blueprint on April 10, giving Capitol Hill a peek as to how he would fund the nation’s federal agencies, programs and services.

The President proposed a $3.8 trillion budget plan for fiscal 2014, that seeks to slash the huge federal deficit by a net $600 billion over 10 years, raises taxes on the wealthy, and puts the breaks to rising costs of two very popular senior programs, Social Security and Medicare.

Senior groups call President Obama’s the first budget proposal of his second presidential term, a “mixed bag.” His fiscal blueprint would eliminate the draconian cuts of the sequester, that is the arbitrary, across the board cuts Congress imposed this year. However, Obama seeks to reduce the federal deficit by calling for another $200 billion in cuts to discretionary programs – half from defense programs and half from domestic programs.

Braking the Rising Costs of Social Security Despite the Social Security Trustee’s 2012 Annual Report that the entitlement program has the financial resources to pay all benefits through 2033 (see my June 1, 2012 Commentary in Pawtucket Times), Social Security benefits are targeted in the recently released budget plan for substantial cuts by adopting the “chained” consumer price index (CPI) for the purpose of calculating Social Security cost-of-living adjustments, or COLAs.

According to the Washington, D.C.-based, National Committee to Preserve Social Security and Medicare (NCPSSM), the Obama Administration sees this switch as “a technical adjustment.” Aging group warn that using the “chained” CPI will substantially reduce the Social Security benefits of current and future beneficiaries. “If it is adopted, a typical 65 year-old would see an immediate decrease of about $130 per year in Social Security benefits. At age 95, the same senior would face a 9.2 percent reduction—almost $1,400 per year,” notes NCPSSM.

While all beneficiaries will feel the impact of this change, its effect will be greatest on those who draw benefits at earlier ages (e.g., military retirees, disabled veterans and workers) and those who live the longest, says NCPSSM, especially “women who have outlived their other sources of income, have depleted their assets, and rely on Social Security as their only lifeline to financial stability.”.

With Republican Congressional lawmakers generally supportive of Obama’s push to rein in Social Security costs, through the use of the “chained” CPI, liberal Democratic lawmakers, including Rep. David Cicilline, representing Rhode Island’s 2nd Congressional District, strongly oppose the President or any Congressional efforts to cut Social Security to lower the nation’s federal deficit.

Rep. Cicilline calls for reforming the nation’s tax code by ending subsidies for “Big Oil,” along with “making responsible target spending cuts,” to slash the nation’s huge federal deficit .

AARP Poll Says, Keep Your Hands Off Social Security
In a statement, AARP Executive Vice President Nancy A. LeaMond, quickly reacted to the Democratic President’s efforts to use the “chained” CPI to control rising Social Security program costs.

While AARP recognizes the need for the President and Congress to confront budget challenges facing the nation, the nation’s largest aging advocacy group calls for “responsible solutions, not harmful proposals” that would hurt older beneficiaries or threaten the retirement security of the generations that follow, says LeaMond.

LeaMond said, “AARP is deeply dismayed that President Obama would propose cutting the benefits of current and future Social Security recipients, including children, widows, veterans and people with disabilities, to reduce the deficit. Social Security is a self-financed program that doesn’t contribute to the deficit, so it shouldn’t be cut to reduce it.”

AARP’s polls indicated that older Americans, across the political spectrum, agree with nonprofit group’s opposition to the “chained” CPI. LeaMond, notes. The recently released national survey found that “fully 84% of voters age 50 and over oppose cutting Social Security benefits to reduce the deficit.”

“Instead of making harmful cuts to Medicare or shifting additional costs onto beneficiaries, we need to look for savings throughout the health care system, including Medicare,” suggests LeaMond. She says that also “lowering the costs of prescription drugs, innovations that promote better care, reward improved outcomes and make health care programs more efficient and less wasteful have the potential to hold down systemic high health care costs, including costs in Medicare.”

Finally, LeaMond adds, “We know that prescription drugs are one of the key drivers of escalating health care costs, so we appreciate the President’s inclusion of proposals to find savings in lower drug costs. And we applaud his plan to accelerate closure of the ‘donut hole’ in Medicare Part D by 2015, which would reduce seniors’ often burdensome out-of-pocket health care expenses.”

A Snap Shot of Other Aging Budget Issues
Howard Bedlin, Vice President for Public Policy and Advocacy at the National Council on Aging (NCOA), in a written statement calls Obama’s budget proposal a “mixed-bag” when it comes to seniors.”

Bedlin acknowledges that the recently released Obama budget eliminates the sequester cuts to critical programs like Meals on Wheels and other Older Americans Act services, elderly housing, and other vital senior services. “It is unfortunate that cuts are proposed for low-income energy assistance and senior job training and placement programs,” he says.
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According to Bedlin, the President’s budget also protects SNAP (Food Stamps) and Medicaid, in sharp contrast to the drastic cuts approved in the Republican-controlled House budget proposal. “Cuts in Medicaid would be devastating to the millions of vulnerable seniors who rely on the program for long-term care and Medicare low-income protections,” he says.
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Meanwhile, a major concern for NCOA with the President’s budget surrounds Medicare and Social Security. While the organization supports some of the Medicare reductions, the proposed $370 billion in additional cuts are “excessive and several will harm” beneficiaries (more than half having incomes below 200 percent of the poverty line), says Bedlin, these cuts in addition to the $716 billion in Medicare cuts under health reform and significant reductions in spending growth over the past three years.

Also, the proposed new home health co-payment will fall primarily on lower-income older women with multiple chronic health conditions, and lead to premature nursing home placement, predicts Bedlin. “The proposed increase in the Medicare Part B deductible would be especially harmful and unaffordable to millions of seniors with incomes just above the federal poverty line ($958 per month),” he says.

Finally, Bedlin notes that the proposed Medigap surcharge would penalize seniors for decisions made by their doctors, cause major market disruption, and seriously confuse many current policy holders. The proposal to further increase Medicare premiums based on income could result in those with incomes of about $47,000 being forced to pay more.

NCOA joined AARP and NCPSSM and virtually every other national aging organization in opposing the President’s proposal to cut the Social Security Cost of Living Adjustment (COLA) through the use of a “chained” CPI.

A Final Note… With Obama’s proposed budget now thrown in the ring with the House and Senate budgets already drafted and voted on, will Congressional gridlock keep the Democratic President, the GOP-Controlled House and Democratic Senate from working together to hammer out a consensus, bipartisan compromise? Only time will tell if elected lawmakers clearly get the message from the American people, “put the people first and not your political party.”

Herb Weiss, LRI ’12, is a Pawtucket-based freelance writer covering aging, health care and medical issues. He can be reached at hweissri@aol.com.

Older Voters Talk Turkey to Congress

Printed October 26, 2012, Pawtucket Times 

            Even the Presidential election less than two weeks away, registered voters across the nation should exercise their Democratic right to vote.  Since the beginning of July local and state political candidates attended hundreds of public events scattered throughout the OceanState, passing out campaign literature, putting up signs throughout their legislative districts, along with distributing bumper stickers to promote their candidacy on their supporter’s vehicles. .

             During this current election cycle AARP moved to push Congress to address the major issues surrounding Social Security and Medicare, gathering opinions from millions of Americans in thousands of communities across the nation. 

            “People of all ages and across party lines believe Medicare and Social Security are critical to the health and retirement security of older Americans and yet all voters are hearing from the candidates about these programs are attack ads and 30-second sound bites,” says AARP Rhode Island State Director Kathleen S. Connell. “The next President and Congress could determine the future of Social Security and Medicare. Voters want and deserve to know where the candidates stand.”

Setting the Record Straight

            Last March, AARP, the nation’s largest aging advocacy group and its state groups, unrolled a new initiative to educate voters about the nation’s two largest domestic programs, Social Security and Medicare and to gather their thoughts to forward to decision makers inside the Washington Beltway.  

            Following its national headquarters’ lead, AARP Rhode Island geared up its final phase of its “You’ve Earned a Say,” initiative, an effort to gather grassroots feedback from “Outside the Beltway” to bring to Congressional lawmakers as they continue their heated debates as to how to bolster the solvency of the nation’s Social Security and Medicare programs.  The educational initiative was created to fuel conversations at the state and national levels to ensure that workers in every state, who have faithfully contributed into Medicare and Social Security Programs, had a direct say in the future reforms of these programs.

            AARP Rhode Island reached out to 130,000 Rhode Island members and its Washington, DC headquarters, to nearly 40 million members to raise awareness of the “You’ve Earned a Say” initiative.  It’s website, www.earnedasay.org, provided both factual and straightforward information as to policies that are being considered and enabled a person to share their ideas with Congress and those running against Congressional incumbents, as how to strengthen these programs. 

            So far, AARP’s educational initiative brought over 3 million people into this conversation on Medicare and Social Security and held over 3,000 events.  At the local level, AARP Rhode Island staff met over 4,000 aging baby boomers and seniors who shared their concerns about the future of these programs. 

            According to Connell, AARP’s “You’ve Earned a Say” initiative was created to bring balanced information to voters — both the pros and the cons — about the policy options being debated during the upcoming Presidential and Congressional elections for both programs. 

            Earlier in this summer, AARP released a series of national surveys on the opinions of voters ages 50 and over, which found that these voters overwhelmingly think the candidates have not done a good job of explaining their plans on Social Security (67%) and Medicare (63%). Voters 50-plus – across party lines – say that getting more information on the candidates’ plans on Social Security (72%) and Medicare (70%) will help them determine their vote on Election Day on Tuesday, November 6, 2012.

            Through the reports and ongoing You’ve Earned a Say events, AARP worked hard to elevate the voices of Rhode Island voters and provide them with nonpartisan information about candidates’ positions on issues important to aging baby boomers and seniors.  In August, AARP launched the “You’ve Earned a Say: Vote for Retirement Security” 2012 Voters’ Guides featuring information from presidential, senatorial and congressional candidates – in their own words – on their own specific plans to strengthen Social Security, Medicare and financial security.

            This week, AARP Rhode Island volunteers delivered a 10 page report entitled “Rhode Islanders Have Their Say about Medicare and Social Security” to Rhode Island Members of Congress and congressional candidates.  The state-specific report conveys the opinions of over 2,100 Rhode Islanders who have participated in the AARP initiative.  National and state-specific versions of the report were also delivered to both presidential and congressional candidates in every state, as well as sitting lawmakers, so they could hear directly from their constituents about their views of how to strengthen these vital domestic programs. 

A Rhode Island Snap Shot

            Out of  2,182 respondents, 32 percent believe Social Security is “okay as is,” followed by 26 percent who only saw a need for minor fixes.    Twenty three percent of those responding believed that Congress must make major changes to the program with 19 percent seeing this domestic program in “a state of crisis.”

            As to Medicare, 26 percent of the respondents say that Medicare “is ok as is” followed by 28 believing that only minor policy fixes are need to keep it solvent.  However, a whopping 31 percent believes major changes are needed to fix Medicare, followed by 15 percent saying Medicare is in “a state of crisis.”

            Twenty eight percent say that they expect the benefits from participating in Social Security and Medicare will equal the contributions they paid while 28 percent will get less benefits.  Forty four percent believe that they might get more back from these two programs the same that they contributed.

            Thirty six percent of the respondents say that more funding is needed to maintain the same benefits while 13 percent fear that benefits will be slashed.  Forty percent expect more funding is needed to shore up the program, but expecting a cut in benefits.  Twelve percent have no opinion.

            Finally, ninety one percent of the respondents want their voice heard by Washington policy makers but 47 percent do not expect it will make a difference.  Nine percent are not interested in getting involved.

            The majority of respondents (51 percent)  called for some changes to be made now, but suggested that Congress should wait before making major changes.  They (35 percent) also believed that higher paid workers aren’t paying enough into the Social Security program and that the program should become solvent before bettered benefit are paid out (68 percent).

            Additionally, the majority (70 percent) also called for a balanced approach when making revenue and benefit changes to ensure there is retirement benefits to future retirees. Fifty five percent also supported upper income workers get higher benefits because they contributed more into the system.

            Most of the respondents (48 percent) also suggested that Congress move slow in making major changes to Medicare, only making small fixes now.   Thirty six percent  believe that the biggest challenge facing Medicare is rising health care costs.  Seventy five percent agreed that all future retirees continue to get guaranteed coverage and care as those get now.  As with Social Security, a majority (62 percent) also called for a balanced approach when making revenue and benefit changes to ensure Medicare is available to future retirees.  Forty four percent say that premiums and funding from the genera federal revenues should not be used to cover increased health care costs.

            Voting may be more difficult in this heated partisan political campaign where voters must learn to separate political rhetoric and negative innuendoes from the substance of issues.  AARP’s “You’ve Earned a Say” initiative is a successful attempt to give back power to voters, helping them become more knowledgeable about Social Security and Medicare in order to rise above negative campaigning.  Your vote must be made by understanding the facts and not be influenced by the fiction of negative attack ads.

            Herb Weiss is a Pawtucket-based freelance writer who covers aging, health care and medical issues.  He can be reached at hweissri@aol.com.