But sometimes “cuts” hide in the form of other changes to earned benefits. Silvers gave the example of “Chained CPI,” which cuts Social Security by changing how benefits are calculated. “Chained CPI is the vampire of American politics,” Silvers told the Washington Post. “It keep being shot through the heart and it keeps reviving.”
Here’s another vampire idea that needs to die: raising the Medicare eligibility age to 67.
The argument typically goes like this: with modern medicine, people are living longer than they did when Medicare set the retirement age at 65, so why not raise the eligibility age to keep up with the times? After all, we need to save money!
This argument conveniently ignores what happens to the millions of 65 and 66 year olds who would no longer be able to access coverage through Medicare, which they have paid into throughout their entire lives.
Many of these seniors with low enough incomes will be pushed into Medicaid, shifting costs onto that other program. Some will have incomes high enough to be ineligible for Medicaid but low enough to qualify for subsidies to purchase insurance on the health exchanges on the Affordable Care Act.
But many more seniors will lose coverage altogether, according to the Center for Budget and Policy Priorities, because while their incomes make them ineligible for Medicaid or subsidies, health insurance companies will consider them to be extremely expensive. “Because exchange plans could charge the oldest workers three times as much as the youngest, unsubsidized premiums could reach $10,000 to $12,000 (in 2014 terms) for 65- and 66-year-old individuals and twice that for couples.” Even if every state implemented ACA completely, that’s about 200,000 more uninsured seniors, according to Matt Stoller of the Roosevelt Institute.
So for increased pressure on Medicaid and more seniors unable to buy coverage at all, how much money do we save? The Congressional Budget Office has updated numbers on that front: the net savings would amount to less than $3 billion a year, a paltry sum in the context of the federal budget.
Thursday, the CBO said the overall savings wouldn’t amount to as much as it had previously estimated. Instead of saving the federal government about $113 billion over a decade, CBO now figures it’s more like $19 billion over eight years starting in 2016.
It will keep people working longer, and that means it will cost their employers—and everyone with private insurance—more in insurance premiums to cover this older, sicker population. The thing is, people still need health care when they’re 65. There isn’t a magic two years between 65 and 67 when everyone is healthy and doesn’t need to go to the doctor.
If we are serious about raising revenue and dealing with our fiscal health, we ought to stop looking at seniors – who have earned Social Security and Medicare by paying into it through a lifetime of paychecks – and start looking at the complex web of tax avoidance schemes of the very billionaires and large corporations that are pushing these cuts to begin with.
“Chained CPI is like the vampire of American politics,” Silvers said. “It keeps being shot through the heart and it keeps reviving. The reason it keeps coming back is because it has billionaires behind it.”
Naturally, the network’s anchors didn’t much like the sound of that. CNBC is one of Wall Street’s main TV mouthpieces, and it is in Wall Street’s interest that Social Security and Medicare are perceived as “entitlements” instead of the earned benefits of workers. After all, they want our politicians to balance the budget and “fix the debt” on our backs, not by raising taxes on their large incomes and investments.
The exchange Silvers had with CNBC anchor Simon Hobbs crystallized this clearly.
Damon Silvers: We’re being really clear. We’re not going to give cover to Democrats who think it’s a good idea to take away economic security from our most vulnerable citizens. We’re extremely clear about that and not embarrassed about it whatsoever. We want a really clear message out there. If you cut social security benefits or medicare benefits to our seniors, to our most vulnerable people in the country, you are going to get no support on it. It only treating them fairly there will be any progress going forward.
Simon Hobbs: Are you as clear on the reality that if you have don’t cut entitlement benefits this country may well go bankrupt?
Damon Silvers: That’s frankly not true. That’s a lie put forward by billionaires who don’t want to pay higher taxes. Social Security is the best funded aspect of our retirement system today and Medicare’s long-term issues are integrated with the long-term issues of our health care system. Neither program is overgenerous. In fact both programs are undergenerous. The only people who believe what you said are people not counting on those programs and who are worried their very large incomes will be taxed.
The letter, signed by 51 Republican lawmakers, says that “Social Security provides us the best opportunity to begin solving our nation’s significant budget imbalances” and that “the ongoing fiscal discussions in Congress provide an opportunity to address entitlement program deficits…with our limited time frame to take action before we run up against fiscal deadlines.”
In other words, let’s use Social Security to reduce the deficit, and let’s use this manufactured budget crisis to get our way.
How do these 51 Republicans want to “change” Social Security to solve our budget imbalances? Their letter is not specific, but they point out that there are a “relatively few, well-known options” to do so.
Indeed there are. We have seen these well-known options trotted out by Republican members of Congress over and over again.
For example, the cover letter from Rep. Reid Ribble (R-Wis.) specifically identifies three “well-known options” to cut Social Security benefits:
Cutting Social Security benefits with a chained CPI cost-of-living formula;
Ribble spells out exactly how the upcoming “fiscal deadlines” can be used to get these Social Security proposals through Congress. First, you increase the debt ceiling for six weeks, then in the intervening six weeks you attach Social Security legislation to a longer-term increase in the debt ceiling.
Perhaps the most “well-known option” to reduce the deficit by “changing” Social Security is the “chained” CPI, which would cut Social Security benefits by reducing Social Security cost-of-living adjustments (COLAs).
In Ribble’s district in Wisconsin, there are more than 140,000 Social Security recipients whose benefits would be cut because of the “chained” CPI. The benefits of Ribble’s constituents would be cut $4 million in 2015 and $57 million in 2023.
It might be safe to assume that many of these constituents who would suffer the most from Republican hostage-taking are tea party Republicans.
Of course, cutting Social Security benefits is just one of the ransom demands made by Republicans in Congress. As AFL-CIO Policy Director Damon Silvers recently wrote:
That’s why people need to tell the president, ‘stand tall, we are with you. No negotiating with hostage-takers. Not about the Affordable Care Act, not about the Grand Bargain and certainly not about cuts to Social Security, Medicare or Medicaid, or more giveaways for big corporations that outsource jobs. You won the election. You must defend democracy and you must stand up for the 99%, and that means no more rewarding hostage-takers.’
While the country remains shut down because of irresponsible House Republican hostage-taking, progressive members of Congress and working families are looking ahead to fight against any proposed grand “bargain” that would include benefit cuts to Social Security, Medicaid or Medicare. Members of the Congressional Progressive Caucus (CPC) spoke Thursday before working families and allies, specifically rejecting any such cuts.
While some politicians and pundits are proposing the use of the so-called “chained” CPI to determine Social Security cost-of-living adjustments over time, progressives and working families realize that the “chained” CPI would actually cut the income of retirees and people with disabilities. Hostage-taking House Republicans keep changing their random demands to end the government shutdown, and their latest demand is for Democrats to agree to cut Social Security benefits or Republicans will keep hurting people through refusing to pass a clean continuing resolution.
Rep. Elijah Cummings (D-Md.) noted the problems with “chained” CPI: “The ‘chained’ CPI would result in very real and harmful cuts for seniors, the most vulnerable in our society. These cuts would only deepen over time while the cost of living goes up.”
Pointing out a better policy option, Rep. Mike Honda (D-Calif.) said: “Instead of talking about the ‘chained’ CPI or cutting benefits, my mom would say you just need to make the pie bigger, we’re just going to talk about one cut—and that’s cut the crap….Cut the crap, scrap the cap.” Currently, wealthy Americans don’t pay into Social Security on any income above $113,700. Scrapping that arbitrary cap would go a long way to shoring up Social Security’s future.
Rep. Alan Grayson (D-Fla.) made it clear where the CPC stands on these issues: “We will vote against any and every cut to Social Security, Medicare and Medicaid,” he said. “If it ain’t broke, don’t break it.”
On Sunday, House Majority Leader Eric Cantor (R-VA) said that Republicans would be open to restoring some of the funding lost in the job-killing sequester if new cuts to social safety net lifelines were put in place. In effect, Cantor is suggesting replacing one policy that hurts the economy and suppresses job growth with another policy that does the exact same thing.
“What we need to have happen is leadership on the part of this president and the White House to come to the table finally and say we’re going to fix the underlying problem that’s driving our deficit,” Cantor told Fox News’ Chris Wallace. “We know that is the entitlement programs and the unfunded liability that they are leaving on this generation and the next.”
Actually, Cantor is completely wrong about Social Security and Medicare causing the deficit. The current deficit is caused primarily by the Great Recession, but also by the Bush tax cuts and two wars that were never paid for. From the Economic Policy Institute:
The deficit is already more or less stabilized for the next decade. In future decades, projected deficits are driven almost entirely by health care costs, but this is a problem of both the private and public sectors. Medicare and Medicaid have lower costs than private insurance and have done a better jobs of controlling costs over the past 40 years.
Cantor offers a false choice that would do little to cut the deficit or boost the economy or job growth and would harm our most vulnerable citizens. Republicans are still focused on the wrong “crisis.” While the evidence is quite clear that what the U.S. needs most is more jobs and investment in infrastructure, Cantor and his fellow Republican “leaders” are focused on deficit reduction that economists have said isn’t necessary, and, in fact, is a drag on the economy and job creation.
While many Republicans and conservatives have minimized the impact of the sequester and its effects on America’s working families, nearly 40% of people say it has hurt them personally. Here are 25 ways the sequester is affecting people’s lives, not just right now, but more and more over time.
25. Fewer Services at National Parks: As the sequester goes on, national parks will have fewer and fewer employees and will have to cut hours, maintenance and visitor center services.
24. Customs Wait Times: Long wait times at customs have exceeded four hours at some airports and passengers have missed flights because of the delays.
22. Loss of Weather Satellites: In order to save on-the-ground jobs, the National Oceanic and Atmospheric Administration is delaying the replacement of satellites that collect and transmit data that enhance weather forecasts and climate models.
21. Increasing the Deficit: With $50 billion being cut from enforcement activities by the Internal Revenue Service, less tax revenue will be recovered, with as much as $4.5 billion being lost and added to the deficit.
20. Loss of Work-Study Jobs: More than 33,000 college students will be dropped from the work-study program and will lose funding for school. Some of them won’t be able to afford to continue their education.
19. Weaker Public Safety: Massachusetts is cutting back on inspections of food plants, hospitals and air quality. This is after the state’s 2012 deadly outbreak of meningitis, which could have been prevented with improved inspections.
18. Failure to Make School Repairs: Districts like Heart Butte in Montana are forgoing necessary repairs, leaving students without hot water, with holes in building roofs and buses and playgrounds that are falling below regulations.
16. Loss of Unemployment Benefits: Already modest unemployment insurance payments will be cut or eliminated for millions of workers at a time when jobs are still scarce.
15. Teachers and Staff Laid Off: School districts like Window Rock in Arizona are laying of staff and teachers and may have to close schools if the sequestration continues.
14. Less Scientific Research: Funds for the National Institutes of Health are being cut, which will delay research that is critical for developing new treatments for diseases.
13. Loss of Counselors: Schools like those in the Hays/Lodge Pole District in Montana are unable to fill counseling jobs as youth suicides are on the rise.
12. Less Job Search Assistance: Workforce training and support programs are expected to see cuts up to 25% of their budget, and organizations like SuperJobs Center in Cincinnati will suspend all training for the thousands of job seekers it serves.
11. Elderly Adults Not Being Able to Eat: Cuts to the Meals on Wheels program mean that local deliveries are dropping by hundreds of meals a day in places like Contra Costa County in California and Lamar County in Texas. The programs are being frozen or reduced and some of those who have lost the meals have no other means of getting daily meals.
10. Decreased Law Enforcement Capability: The only crime gun tracing facility in the country has laid off 90 workers, hampering their ability to track down weapons like those used by suspected Boston Marathon bombers Tamerlan and Dzhokhar Tsarnaev.
8. Declining GDP Growth: The rate of economic growth in the United States declined in the first quarter of the year because of budget cuts.
7. Increasing Children’s Exposure to Lead: Programs designed to lower children’s risk of lead poisoning have faced cuts and could see more. Meanwhile lead poisoning is described by Think Progress as “one of the most important and overlooked national public health problems.”
6. Kids Kicked Out of Head Start: As many as 70,000 children will lose their chance of participating in Head Start this year because of the cuts.
5. Increased Homelessness: According to the Department of Housing and Urban Development, as many as 100,000 homeless and formerly homeless people will be removed from programs that have been proven to reduce homelessness.
4. More Air Pollution: Cuts have forced the Environmental Protection Agency to delay the implementation of new monitoring sites for dangerous air pollutants.
3. Fewer Public Defenders and Worse Representation: Offices are being closed in 20 states, cases are being delayed and defendants are being forced to be represented by Criminal Justice Act panel attorneys, which some studies have found to be less effective than public defenders.
2. Less Support for Domestic Violence Victims: Shelters for domestic violence victims like those run by the Rhode Island Coalition Against Domestic Violence are cutting back on beds and services for the first time in their history, increasing the chances that women and children in the state will be victims of violence.
1. Lost Homes: More than $2 billion in cuts to Section 8 and other housing programs to freeze or shrink their programs and people are starting to lose their homes as a result. It is projected that 140,000 fewer households will get assistance this year.
Learn much more about how the job-killing sequester is hurting communities around the country at Mapping the Sequester.
Working families are calling on Congress to protect Social Security, Medicare and Medicaid from benefit cuts (i.e., raising the retirement age and the “chained” CPI), repeal the sequester and close tax loopholes for corporations and the wealthiest 2%.
Our country needs workhorses, not showhorses. We need depth of knowledge, not empty slogans. Most importantly, we need leaders who will fight for working families all of the time, not some of the time.
Let’s get specific. We need leaders who will protect the earned benefits of Medicare and Social Security. We need to stand firm against the relentless attacks on the essential functions of government: the unprecedented filibuster abuse, the man-made paralysis of the National Labor Relations Board, and the dismantling of our hard-fought protections against the Wall Street crimes that plunged American workers into deep recession.
This isn’t abstract. American workers can’t afford anything less. And that’s why we strongly urge Massachusetts voters to support Ed Markey for U.S. Senate on June 25.
Ed Markey has represented Massachusetts in Congress for many years. He’s been in the majority and the minority. He’s served with Democrats and Republicans in the White House. Through it all, he has consistently striven to make our country cleaner, more equal, more technologically savvy, and more transparent.
The camera at the bottom of the ocean that showed the oil leaking out of the BP Deepwater Horizon rig in 2010? That was Ed Markey. The creation of an entire Congressional committee devoted to developing clean energy jobs? That was Ed, too. New requirements for airline cargo screening to keep us safe? Markey.
Democratic Congressman Ed Markey and Republican private equity executive Gabriel Gomez are running to become the next U.S. Senator from Massachusetts.
The special election will be held on Tuesday, June 25, and June 5 is the last day to register to vote.
In local and national news, the coverage of the race has focused on the “horse race” and various things the two candidates have said – not so much on policy. But on issues affecting working families, there’s are huge differences between Markey and Gomez that we wish were making bigger headlines.
1.) Retirement. As a member of Congress, Ed Markey has been a longtime defender of Social Security. When both Republicans and Democrats were considering a plan to change the formula used to determine Social Security benefits to “chained CPI,” Markey opposed it.
“Chained CPI” (CPI stands for “consumer price index”) assumes that when prices go up, consumers will choose a less expensive product. This formula results in a lower “cost of living” estimate because it assumes people need less; using this formula to calculate Social Security is equivalent to a benefit cut.
Republican Gabriel Gomez, on the other hand, supports the “chained CPI” benefit cut, which he announced at an April 10 debate. As the AARP points out, if the government makes this switch for both Social Security and veterans benefits, current and future seniors veterans could lose $146 billion in benefits over 10 years.
2.) Wall Street. Ed Markey voted for the groundbreaking Wall Street reform bill, which ends some of the worst abuses of big banks and corporations (those same banks have since fought tooth and nail to weaken the reform). He also opposes Republican plans that would increase tax incentives for companies that ship jobs overseas.
Gabriel Gomez, who made his fortune as a private equity executive, has relied heavily on the support of Wall Street and the financial services industry in his run for office. Individuals working in finance have given Gomez’s campaign $278,000, 52 percent of his total campaign contributions. Bain Capital employees have given Gomez more than $12,000.
3.) Health Care. The candidates differ starkly on the issue of Medicare. Ed Markey opposes cuts to Medicare, while Gabriel Gomez has said he favors raising the Medicare eligibility age. On his website and in his public statements, Gomez refers to Medicare as an “entitlement,” not as a guaranteed benefit.
Gomez hasn’t said at what age seniors should be eligible for Medicare, but a popular proposal would raise the eligibility age from 65 to 67. According to Roosevelt Institute fellow Matt Stoller, that would mean that 5 million 65 and 66 year olds would not be able to get Medicare coverage for at least a year, and 7 million would not be eligible for at least a month. Even with Obamacare fully implemented and every state accepting Medicaid expansion, this policy change would leave at least 200,000 seniors without health insurance, primarily those on the lower end of the economic spectrum. Those seniors would be denied the earned benefit that they paid for over the course of their lives.
Remember, the special election is on Tuesday, June 25, and the last day to register to vote in this election is Wednesday, June 5. If you live in Massachusetts or know someone who does, please share these three crucial pieces of information about where Markey and Gomez stand.
Sen. Jay Rockefeller (D-W-Va.) introduced the Medicare Drug Savings Act of 2013 that would produce savings without passing on costs to seniors.
The act offers a solution that strengthens Medicare’s fiscal footing while shielding beneficiaries from harmful cost-shifting, unlike most other Medicare proposals we hear about. The Congressional Budget Office (CBO) estimates that restoration of Medicaid-level drug rebates for low-income Medicare beneficiaries would save the federal government $141 billion over 10 years. Here are some critical facts about the bill from the AFL-CIO and other allies:
America’s workers strongly support allowing Medicare to secure lower prices drugs. According to a recent national poll, 85% favored “requiring drug companies to give the federal government a better deal on medications for low-income people on Medicare.”
Implementing Medicare drug rebates is not new law. Upon passage of the Medicare Modernization Act (MMA), millions of older adults and people with disabilities gained access to prescription drug coverage through private plans approved by the federal government, known as Medicare Part D. At the same time, the MMA severely limited the tools available to the federal government to control spending on pharmaceutical drugs in Medicare. In particular, the MMA eliminated rebates offered by pharmaceutical manufacturers for drugs provided to beneficiaries dually eligible for Medicare and Medicaid. Applying Medicaid-level rebates to Medicare drugs simply restores a practice that existed for dually eligible beneficiaries prior to the passage of the MMA.
Restoring drug rebates to the Medicare program is a proven cost saver. Already the Medicaid program benefits from lower drug prices due to federally determined rebates on brand name and generic medications. A 2011 comparison of 100 brand-name drugs under Medicaid and Medicare Part D found that Medicaid rebates required by law reduced expenditures by 45% for the drugs under review. Whereas, Medicare rebates secured by private drug plans reduced expenditures by only 19%.
Pharmaceutical spending on research and development is not at risk. Studies show that research and development investments in particular types of drugs are not directly linked to specific revenue sources, such as Medicaid. These findings, coupled with an examination of industry spending trends, suggest that reinstating Medicare drug rebates will not limit research and development. We reject the argument that pharmaceutical manufacturers will be unable to fulfill their commitment to innovation if the Medicare program is allowed to secure more reasonable drug prices.
Applying Medicare drug rebates will not shift costs to Medicare beneficiaries or employers. Some stakeholders claim that applying Medicaid-level drug rebates for low-income Medicare beneficiaries will increase costs for other Part D beneficiaries, but research supports otherwise. The same research suggests that costs for purchasers outside of Medicare—namely employers— will be largely unaffected if the Medicare rebates are restored.
A study by the University of Missouri makes it abundantly clear that opting into Medicaid expansion would be positive for the Show Me State’s economy, including the creation of more than 24,000 jobs in 2014 alone.
Let’s quickly review: Because of the Supreme Court decision last summer, states can choose to not participate in the Medicaid expansion found in the Affordable Care Act, which makes Americans at or below 138 percent of the federal poverty level eligible for Medicaid and provides the billions in federal dollars needed to insure them. Many leaders of both parties have opted in; some, like Texas Gov. Rick Perry, still stubbornly refuse.
In Missouri, the expansion would open up eligibility to 159,260 additional Missourians in 2014 alone. Because currently there are so many in Missouri without health insurance – roughly 15 percent of the population, or as many as 900,000 people – we are currently seeing reduced productivity, increased cost to public programs, increased private insurance premiums, and increased stress on emergency programs (uninsured folks using the ER as their health care).
But factor in Medicaid expansion, allowing at least a chunk of that 900,000 to afford insurance for the first time, and those problems start to inch down. In addition, with the federal money rolling in to pay for the expansion, health care companies will immediately need personnel. The University of Missouri study estimates that in 2014, we’d see 5,094 new jobs in nursing and care, 3,208 news jobs in retail, 2,905 new jobs at private hospitals, 2,108 new jobs in home care, and a host of other areas. They estimate a total of 24,008 Missouri jobs created in 2014.
Democratic Gov. Jay Nixon announced late last year that Missouri would be participating, calling it “the best thing to do for our state.” With the expected employment windfall, and newfound medical security for thousands of Missourians, it’s a no-brainer, right?
Some extremist members of the Republican-controlled legislature, unfortunately, have other ideas.
Let’s put aside the morally bankrupt idea of kicking thousands of children of low-income parents off their health insurance. Even if Rep. Barnes’ bill went into law, under the guidelines set forth in the Affordable Care Act, Missouri probably still wouldn’t be eligible for the federal funds they need to do any of this in the first place, unless the Obama Administration made an exception.
So in other words, Rep. Barnes’ “alternative” proposal is not an alternative at all – it’s a roundabout way of scuttling Medicaid expansion completely.
Let’s not be fooled by Barnes’ political theater. Medicaid expansion does not have to be a partisan issue, as Republican Govs. Christie, Martinez, McDonnell, Kasich, and Scott have shown. This is about allowing the most vulnerable among us to have the medical security we all deserve – not to mention putting thousands of Missourians back to work.