Obama’s Budget DOA, Thanks to GOP Gridlock

Published in the Woonsocket Call on February 14, 2016

With a GOP-controlled Congress President Obama’s final budget arrives “dead on arrival” on Capitol Hill.  The 182-page 2017 Fiscal Year budget, submitted on February 9, detailing $4.1 trillion in federal spending, which starts October 1, seems to be not worth the paper it’s written on.

Obama, a “lame duck” president in his last term, will not get his day in court.  Since the 1970s, a long-standing political tradition has brought the Office of Management and Budget Director and other senior administration officials, to present the president’s entire budget to Congress.  However, the Chairs of the House and Senate budget committees snubbed the Democratic President by issuing a joint statement saying, there will be no hearings before their panels this year. Sadly, political gridlock, fostered GOP Senate and House leadership, still seems to be alive and well on Capitol Hill.

Crafting the budget proposal now is in the hands of a very conservative Congress. But there a positives in Obama’s budget proposal, provisions that hopefully be placed in an enacted budget.

Obama’s budget proposal makes critical investments to fund domestic and national security priorities while adhering to the bipartisan budget agreement signed into law last fall.  It lifts sequestration in future years.  The budget proposal also attempts to drive down the federal deficit through smart savings from health care, immigration, and tax the wealthy and banks.

The Budget also seeks to tackle a multitude of domestic issues including confronting climate change, finding new clinical treatments for attacking cancer, advancing biomedical research, fighting infectious diseases, protecting the nation’s water supply and fostering clean energy initiatives, ratcheting up military readiness, revitalizing the American manufacturing sector, and funding job training and education initiatives.

Obama’s Final Budget and Seniors

But Obama’s 2017 Fiscal Year Budget has a number of budget provisions that directly impact older Americans, too.

According to  President and CEO Max Richtman, of the Washington, D.C.-based National Committee to Preserve Social Security and Medicare, like last year’s Obama recently released budget proposal proposes no changes in the way Social Security benefits are determined which is “good news for seniors.”

Richtman says that his aging organization worked tirelessly to make sure the FY 2017 budget did not include any Social Security proposals that would negatively impact benefits for current or future beneficiaries.  He notes, “The new budget proposes a substantial increase in the Social Security Administration’s (SSA) budget — $13.067 billion for SSA’s FY 2017 appropriation for administrative funding.  This is a $905 million, or 7.44 percent, increase over the FY 2016 enacted level.”

Finally, Obama’s newly released budget helps SSA to improve customer service for those applying for SSA and/or disability benefits by hiring additional front-line employees for its teleservice centers and local offices as well as additional staff to reduce the backlog of disability applications that have accumulated in SSA’s hearing offices, he says.

NCPSSM also applauded the President’s budget proposal for allowing Medicare to negotiate for lower prescription drug prices.

Richtman observed it has taken Congress a long time to acknowledge that the high cost of prescription drugs has hit older American’s hard in their wallets.  “Medicare spends billions providing Part D drug coverage each year while beneficiaries including seniors, the disabled and their families also face rising out-of-pocket costs and higher premiums, he says, noting that “All the while, drug makers continue to reap the profits of their price gouging.”

In his budget proposal Obama has again proposed lifting the ban preventing Medicare from negotiating prices with the drug companies, notes Richtman, warning that “Big Pharma has lobbied hard to keep the ban in place but seniors expect, this time, Congress will do the right thing and finally allow Medicare to negotiate for fair prices.”

Richtman says there are other budget provisions that benefit the nation’s seniors.  Specifically, the closing the Part D donut hole two years earlier, additional funding for in-home services, and reforms for overpayments going to private insurers in Medicare Advantage.

Meanwhile, the President’s budget was not all good news, adds Richtman, noting that “Once again, the budget proposes shifting even more healthcare costs to seniors by extending Medicare means-testing to the middle class and increasing out-of-pocket costs such as the home health care copayment and the Part B deductible.”

The President’s new funding request also targets vulnerable older Americans, by increasing funding from the 2016 Fiscal year Budget.  The President has increased last year’s budget by more than $10 million in discretionary resources for supportive services, also increasing the Congregate and Home-Delivered Nutrition Programs (like Meals on Wheels) by $14 million.  The Aging and Disability Resource Centers is also given a $2 million increase.

Other programs benefit from Obama’s budget proposal, too.  Elder Justice Initiative and Lifespan Respite Care Programs each would receive $2 increases from last year.  The Commodity Supplemental Food Program would get $14 million more.   The budget proposal also puts $10 million in for a new initiative to improve senior access to the Supplement Nutrition Assistance Program.  Section 202 Housing for the Elderly also gives a bump from last year in the tune of $72 million.

But the budget request slashes funding for programs that serve low-income seniors, specifically the Low-Income Home Energy Assistance Programs and the Community Development Block Grant takes huge fiscal hits.

Views from the Side Line 

             Obama’s budget proposal preserves programs for seniors, funding Social Security and Medicare, says Darrell M. West, Ph.D., Vice President and Director of Governance Studies at the Brookings Institution, “Not many Republicans are taking this budget very seriously as they plan to write their own budget. The GOP alternative likely is going to include changes to programs affecting senior citizens, he warns.

Rhode Island’s Congressional delegation weighs in on the looming heated partisan budget debate where law makers will be toeing the part line.

Congressman David Cicilline, notes that he is disappointed that the House Budget Committee will not ‎holding hearings on President Obama’s budget proposal. “We should be discussing ways to strengthen Social Security, preserve Medicare, and ensure retirement security for every American. Unfortunately, it’s clear that House Republicans don’t want to have this discussion,” he says.

U.S. Senator Sheldon Whitehouse weighed in on the brewing pre-election budget battle.  “I’m pleased to see that the President’s budget protects Social Security and Medicare from the cuts sought by many Republicans.  As the President has proposed, we should reduce the deficit by closing wasteful tax loopholes, not by compromising the programs essential to our seniors, and not after saving Rhode Island seniors $14.4 million in prescription costs thanks to the Affordable Care Act.”

Finally, U.S. Senator Jack Reed notes that the President’s budget proposal reflects a number of his ongoing efforts to support Rhode Island seniors.  “This budget blueprint proposes significant investments in the health and well-being of aging Americans, and I will work hard to champion these proposals as we work through the appropriations process this year, he says.

“I am particularly glad the President heeded my call to propose meaningful steps towards lowering the cost of prescription drugs, which is critical for middle class families,” adds the Senator.

Now the work begins as Congress starts to craft it’s 2017 Fiscal Year Budget.  Democratic Congressional lawmakers can glean and fight for provisions in Obama’s eighth and final budget that positively benefit older Americans. With Senator Reed, sitting on the Senate Appropriations Committee, the Rhode Island’s Senior Senator and the state’s Congressional Delegation will play a major role in shaping the nation’s future aging programs and services.

 

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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.