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Posts Tagged 'entitlement reform'

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Mulvaney Actively Subverting Trump’s Promises on Social Security and Medicare

We have been skeptical since last fall about President Trump’s promises not to touch Social Security and Medicare, partly because of the privatizers and cutters he appointed to high office.  Now, according to an article in today’s Washington Post by reporter Dave Weigel, Trump’s budget director, Mick Mulvaney, is actively agitating for the Trump administration to “work around” those promises:

"I’ve already started to socialize the discussion around here in the West Wing about how important the mandatory spending is to the drivers of our debt.  I think people are starting to grab it.”  - Mick Mulvaney on Hugh Hewitt radio program

Mulvaney claims that he is not really advocating that the President break his promises.  Instead, the budget chief seems to be playing a semantic game by redefining what Trump really meant.  

"Mulvaney… has said that any Republican reform would be consistent with Trump’s promise, by defining the act of ‘saving’ Social Security and Medicare as anything that allows them to meet obligations — even and especially if those obligations are reduced.” – Washington Post 3/6/17

That is a dubious bending of the President’s words on the campaign trail.  Mulvaney is, in effect saying, we have to cut Social Security and Medicare in order to save them, which is patently wrong.  The two programs could be kept solvent deep into the 21st century through modest and manageable measures that we have detailed many times since last Fall, with no benefit cuts.  In fact, Senator Bernie Sanders’ new bill in Congress would increase benefits and extend Social Security’s solvency until 2078.  

Mulvaney is being even more disingenuous, though, because candidate Trump explicitly promised not to cut either program.  Trump told a post-election rally in Des Moines in December:

"You’ve been paying into Social Security and Medicare… We’re not gonna cut your Social Security and we’re not cutting your Medicare.”  - President-elect Trump, December, 2016

It’s hard to see how Trump could have been any clearer, or how Mulvaney could claim the President could be convinced to cut Social Security and Medicare without violating his campaign promises.  Yet, Mulvaney’s proposals on earned benefits programs would undeniably lead to benefit cuts.   The Post points out that at his January confirmation hearing, he advocated raising the Social Security retirement age to 70, and supported means-testing to reduce Medicare spending, two unpopular measures with voters in the National Committee’s recent public poll.

Of course, Mulvaney is not the only Trump administration official gung ho to cut and privatize our retirement security programs.  HHS Secretary Tom Price played a similar word game to Mulvaney’s last week, affirming that Medicare is a “guarantee” to seniors while implying that it has to be modified in order to uphold the guarantee.   

We wrote last week about the potential bait-and-switch that the administration and Congressional leaders may use, by promising that current retirees won’t be affected by any changes, but that younger Americans might be by the time they are seniors. 

None of this lends much comfort to current or future retirees – nor offers much reassurance that the President’s promises on Social Security and Medicare won’t be eroded, if not now, then in the near future.


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What the GOP’s Sleight of Hand Budgeting and Deflection Politics Means for Social Security & Medicare



First pulished on Huffington Post by Max Richtman, NCPSSM President/CEO

Any good magician will tell you, the best tricks depend on misdirection. So while all eyes are on the spectacle of the House GOP’s in-fighting, its search for a new Speaker and the never-ending “who-insulted-who” shenanigans of the GOP Presidential primary, it’s easy to forget that Congress is now also quietly working on legislation that could impact virtually every American family, especially those that depend on Social Security, Medicare and Medicaid. The American people must not be distracted by the ongoing political show to the point that they miss the real action occurring behind the scenes.

Before leaving for recess in December, Congress faces legislative deadlines to avoid a government shutdown, a default, an extension for transportation funding and tax breaks. While the shutdown has been narrowly averted, the annual appropriations process continues as the President and Congressional Democrats push GOP leaders for a deal to mitigate automatic across-the-board cuts to defense and non-defense programs – also known as the “sequester.” 

No amount of political magic can hide the fact that three years of sequester caps have had serious consequences for important seniors programs, including the Older Americans Act and the Low Income Home Energy Assistance Program, along with service reductions at Social Security Administration field offices. That’s why the National Committee supports the President’s plan to increase spending caps. However, some conservatives in Congress insist that relief for programs like the Older Americans Act be paid for by cutting Medicare and Medicaid. This budgetary sleight-of-hand could trade partial relief for some seniors’ programs by cutting other essential health security programs like Medicare and Medicaid, thus further eroding the tenuous economic situation many older Americans face.

It’s no mystery where these Medicare and Medicaid cuts are likely to come from. You have to look no further than the GOP Budget plan for a blueprint of the House leadership’s favorite benefit cut proposals, such as:

  • Ending the Medicaid joint federal/state financing partnership and replacing it with fixed dollar amount block grants, giving states less money than they would receive under current law. 
  • Repealing Medicaid expansion. Since 2014, states have had the option to receive federal funding to expand Medicaid coverage. Over half of the states have expanded their Medicaid programs, and others will likely do so in the future.  Repealing this option would result in at least 14 million people losing their Medicaid coverage and state Medicaid programs would lose a total of $900 billion over 10 years. 
  • Cutting Medicare by $431 billion over ten years.  Over half of Medicare beneficiaries had incomes below $23,500 per year in 2013, and they are already paying 23 percent of their average Social Security check for Medicare cost-sharing in addition to out-of-pocket costs.

The National Committee to Preserve Social Security & Medicare has prepared a detailed look at the many policy options in our Fall Budget Outlook brief.

Legislation may need to be enacted by late November or early December to allow the government to continue borrowing and avoid a government default.  Allowing a default would result in an economic catastrophe and jeopardize the payment of Social Security, Medicare and Medicaid benefits. In addition, default would jeopardize Medicare and Medicaid payments to doctors and hospitals and coverage for prescription drugs, which are critical to the health security of millions of Americans.

As if all of this isn’t enough, funding for the nation’s roads and public transit will also expire at the end of October.  Because the Highway Trust Fund no longer takes in enough gasoline tax revenue to cover surface transportation costs, Congress must come up with more funding.  When Congress passed a temporary funding fix this summer, House leaders proposed using Social Security funds to pay for it.  This was the third time in little over a year that Congress has attempted to use Social Security and/or Medicare as an ATM to pay for a completely unrelated priority.  Last year Congress voted to extend the Medicare sequester cuts into 2024 to cover a reversal of cost-of-living cuts to veterans' pension benefits. This summer Medicare was cut again to help pay for the Trade bill.  Rather than consider tax reform for huge corporate tax dodgers sending billions of profits oversee to avoid paying taxes, GOP leaders tried again (unsuccessfully this time) to cut benefits to seniors, people with disabilities and their families who depend on Social Security to pay for highways.  Unfortunately, Congress could pull this outrageous strategy out of its hat once again.  Need money for highways, to relieve sequester cuts, deficit reduction or anything at all? Voila!  Let’s take if from Social Security and Medicare.

There’s no doubt about it -- it will take more than legislative smoke and mirrors and political magic for Congress to get the job done right. But the American people also need to be more than an audience in this process.  We need to pull back the curtain on this benefit cut agenda so the American people can avert any surprises Congressional leaders have up their sleeves for vital programs like Social Security, Medicare and Medicaid.

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The GOP Debate...Slim Pickin’s If You Care About Social Security or Medicare or Virtually Any Other Issue Impacting Average Families

Now that America’s Presidential Debates are designed as entertainment television (as described here by CNN Moderator Jake Tapper) and not an actual debate of the issues voters need to hear about before choosing our next President...it’s probably no surprise that Social Security & Medicare just aren’t considered sexy enough for any serious attention. 

In response to the only question asked last night about the nation’s most successful government programs, Donald Trump told the audience he’ll give up his benefits because he doesn’t need them (Ben Carson made the same suggestion earlier in the week).  So, you have to wonder -- is asking rich people to voluntarily give up their Social Security and Medicare now considered a serious GOP policy plan? Maybe every American millionaire will be asked to email 10 of their country club friends to pledge to give up their benefits, too?  No one is forced to apply for their Social Security now, so how is this even vaguely a solution? 

Meanwhile, since Governor Chris Christie staked his campaign on the idea of being tough on “entitlements” he continued to push his plan to slash benefits by ignoring actuarial reports from every legitimate government entity including the Congressional Budget Office and the Social Security actuary. Christie claimed last night that Social Security will be insolvent in just “7 to 8 years.”

The truth is the Social Security Trust fund will be depleted in two decades and only pay 79% at that point, if Congress does absolutely nothing.  But that’s not the same as Social Security is “broke” and Social Security is “insolvent.”  At the bare minimum, a President of the United States needs to understand the difference. 

Finally, while this didn’t happen in last night’s debate, Carly Fiorina recently offered a truly unique approach to her plans for Social Security and Medicare as President...it’s a secret until I’m in the White House. 

"I am not prepared to go to the American people and talk to them about how we're going to reform Social Security and Medicare,’ Fiorina told CNBC's John Harwood in an interview published Wednesday, ‘until I can demonstrate to them that the government can execute with excellence, perform its responsibilities with excellence, serve the people who pay for it with excellence.’

Harwood was impressed. ‘That is a dodge worthy of a very good politician,’ he told the former Hewlett-Packard CEO. 

Fiorina denied that she had just dodged. ‘I am deadly serious,’ she said.” 

No doubt she’s deadly serious about not addressing the issue now or talking about her already expressed plans to cut Social Security offered during the California Senate campaign in 2010:

"I'm prepared to look at any and all ideas without stating at this point which I would favor and which I would not. We have to have a comprehensive look at entitlement reform, including Social Security reform."  Carly Fiorina, 2010

“... I believe that to deal with entitlement reform, which we must deal with, we ought to put every possible solution up on the table...”  Carly Fiorina, Fox News 2010

So basically, once President Fiorina is confident she’s an excellent President then she’ll tell you about her plans to cut Social Security and Medicare benefits. 

But only then...



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The GOP Debate Watchers Guide on Social Security & Medicare


Busting Tonight’s Top 5 GOP Myths – In Advance

You don’t have to be much of a political sooth-sayer to predict that, given the GOP rush to attack what the party calls “entitlements” (and what everyone else knows are actually earned benefits), tonight’s debate will likely touch on the GOP Presidential candidates’ plans for Social Security and Medicare. 

Unfortunately, since this debate is being moderated by Fox News that discussion will start from the flawed premise that these programs are “bankrupt,” destroying America’s economy and simply too expensive.  It’s likely to go downhill from there as the GOP Presidential contenders have already tried to prove their conservative bona-fides by out tough-talking each other in a rush to cut benefits more than the guys standing next to them.  (So far, Mike Huckabee has been the exception to that rule so it will be interesting to see what tonight brings from him.)

As you watch tonight, remember these basic truths:   

1.  Social Security and Medicare Are NOT Bankrupt and not in Crisis

Medicare solvency remains greatly improved since passage of health care reform with the Hospital Trust Fund paying full benefits until 2030 which is the same as was projected last year. In 2030, payroll taxes alone are estimated to be sufficient to cover 86 percent of HI costs. Solvency has improved by 13 years from the date that was projected before enactment of the Affordable Care Act. In fact, Medicare's actuarial shortfall actually decreased from last year. 

Social Security remains well-funded. With the economy in recovery, Social Security's total income will exceed its expenses by over $9.2 billion and annual income will exceed obligations through 2019. There is nearly $2.79 trillion in the Social Security Trust Fund, which is $25 billion more than last year and it will continue to grow by payroll contributions, income taxes paid on benefits, and interest on the Trust Fund's assets.

Even if Congress does nothing, and no one believes that will happen, Social Security and Medicare are still not “bankrupt.” The programs will pay reduced benefits once their Trust Fund reserves are depleted.  However, a 14% Medicare benefit cut in 2030 and a 21% Social Security cut in 2034 are not options. That’s why we urge Congress to set aside the crisis rhetoric and focus its attention on benefit adequacy and long-term solvency as proposed in the Social Security 2100 Act

2.  Disability “Crisis” Can be Easily Avoided

Congress has known since 1994 that the Disability Trust Fund would be depleted in 2016, meaning only 81 percent of scheduled benefits will be payable after that point. Rather than make a routine administrative reallocation of income across the Social Security Trust Funds, as Congress has done 11 times before (including 4 times during the Reagan administration), the GOP House has blocked that move.  Conservatives say they will wait until the 11th hour to force broader changes in the Social Security program, rather than simply fix the issue easily today. So if you hear any hand-wringing tonight about the disability “crisis” from Presidential candidates tonight, understand this is a “crisis” of the GOP Congressional leadership’s making.  Also, a subset of this discussion is the myth that the disability program’s solvency issues are due to lazy Americans who are scamming the system.  The truth is disability expenditures have increased primarily due to anticipated demographic trends - as the large number of baby boomers age into the disability-prone years (they turned ages 50 to 68 in 2014), more people become disabled and thus receive benefits.  The increase in full retirement age from 65 to 66 (and to 67 for those born after 1959) has also contributed to the increase in disability expenditures, as people remain on the disability rolls longer before shifting to retirement. Also, it’s not easy to get disability.  80% of initial disability claims are denied.

3. No One Suggests “Doing Nothing”

Claims that supporters of Social Security & Medicare want to “do nothing” is an absurd straw-man argument designed to hide the real truth that conservatives have long supported a cuts-only approach to addressing long-term solvency with little regard to what those cuts actually mean to American families.  From President Bush’s failed privatization campaign to the GOP Budget and many other harmful proposals in between, ensuring that Social Security and Medicare benefits remain adequate for millions of Americans is not the primary goal.  The #1 goal is to cut benefits.  Rather than address the many solvency proposals which don’t rely solely on benefit cuts, GOP candidates have chosen to pretend these plans simply don’t exist, thus the “do nothing” straw-man argument.

4.   Slashing Benefits Isn’t the Only Way to “Save” Social Security and Medicare

When a candidate promises to “save these programs for future generations” by raising the retirement age, raising the Medicare eligibility age, privatizing Social Security, changing the COLA formula and means-testing Social Security while exempting near retirees what they’re actually saying is:  “We know seniors vote so we’ll protect them now and slash future benefits for their children and grandchildren instead.”  This cynical GOP messaging strategy isn’t new.  But it ignores the fact that seniors understand the recession generation will need Social Security and Medicare, particularly as they face high unemployment, wage stagnation and historically high student loan rates.

What You Won't Hear Tonight

Here are a few examples of proposals you won’t hear about tonight: lift the Social Security payroll tax cap so that the wealthy pay their share, allow Medicare to negotiate for prescription drugs in Part D, reinstitute Part D drug rebates from pharmaceutical manufacturers and allow billions in Medicare Advantage overpayments to private insurers to be fully phased out as provided in the ACA.  You can be sure none of these proposals will be offered by GOP Presidential candidates tonight, even though they would save billions and spare current and future retirees, survivors and the disabled from devastating benefit cuts. Poll after poll shows the American people of all ages and political parties oppose cutting benefits in Social Security and Medicare.  They’re also willing to pay more to strengthen the program for future generations.  But you won’t hear that tonight either.

America is the wealthiest nation in the world at the wealthiest point in our history, yet rather than focus on growing income inequality, wage stagnation and the death of the middle-class, conservatives hope to shift voters’ attention away from the true causes of our economic malaise in favor of cutting benefits for “greedy geezers” and “takers” who receive Social Security and Medicare, all the while promising to strengthen the programs by slashing them.

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Congress Targets Social Security with Fast-Track Commission Plan

"Reps. Tom Cole (R-OK) and John Delaney (D-MD) plan to introduce a bill this Congress that would create a Social Security commission to propose changes to the program, Cole's office confirmed to TPM on Monday." - Talking Points Memo.

“The commission would probably gradually raise retirement age, it would probably look at chained CPI, would probably look at means-testing and probably look at some sort of revenue, or reduce benefits for upper-income people,” Cole said. “Then you have to vote.”  - The Hill.

 “We are troubled that H.R. 1578 takes several steps to circumvent a deliberative public process, limiting the participation of Social Security stakeholders and advocates. For example, the Committees of jurisdiction over the Social Security program — the Senate Committee on Finance and the House Committee on Ways and Means — would have limited input in the development of the Commission’s recommendations. Under “fast track” procedural rules in your bill, the legislation embodying the Commission’s recommendations would be considered by Congress on an expedited, “take-it-or-leave-it” basis.  No amendments to the Commission’s bill could be offered and it could be passed in both the House and Senate by a simple majority vote. Normally, Section 310(g) of the Budget Act and the Senate’s “Byrd rule” require 60 votes in the Senate to approve legislation which changes Social Security." - Max Richtman.

 

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