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Don’t Let Budget Cutters Destroy Medicare, Medicaid and Social Security

AFSCME always says that voting is important and elections matter. Certainly that was proven last November, when Democrats took a beating at the polls due to a bad economy and low turnout among the party faithful.

AFSCME always says that voting is important and elections matter. Certainly that was proven last November, when Democrats took a beating at the polls due to a bad economy and low turnout among the party faithful. 

Divided Government 

The upshot is that a new crop of anti-union governors now control some key states and, in Washington, DC, a divided government struggles to come to grips with starkly opposing views. At one end of Pennsylvania Avenue sits President Barack Obama, a Democrat still in charge at the White House. At the other end sits the new Republican majority in the House of Representatives, led by Speaker John Boehner (R-OH). In the Senate, Democrat Harry Reid is still Majority Leader, but his working majority has shriveled from 59 out of 100 seats to only 53.

Quick to take advantage of their new strength, Republicans are trying to change the national debate to reflect their priorities. Despite polls that show the still shaky economy has Americans more concerned about jobs than reducing the deficit, the GOP is focused on the latter. And even though deficits can be reduced by revenue raisers as well as spending cuts, they reject tax increases – even for the wealthiest Americans.

Radical GOP Budget

The best illustration of House Republican priorities is the fiscal year 2012 budget bill introduced in April by Budget Committee Chairman Paul Ryan (R-WI). It imposes a Draconian freeze on nearly all domestic programs and imposes new rules that will make it harder for people to qualify for everything from housing assistance to college aid. At the same time, it includes $4 trillion in tax cuts – primarily for wealthy people and corporations.

But the worst part of the Republican budget is its attack on the benefit programs that provide basic income and health care to senior citizens: Medicare, Medicaid and Social Security. 

Replaces Medicare with Vouchers: The Republican budget would end the Medicare program we all know for people who turn 65 after 2021. Medicare’s guaranteed set of benefits would disappear. Instead, seniors would get vouchers to buy coverage from private insurance companies, even though it’s doubtful that insurers will accept all seniors at affordable premium rates (companies would be allowed to charge higher rates based on age, gender and pre-existing conditions). Private insurers have had a long and disturbing record of abandoning seniors whenever the cost of care crowded out sufficient profits.

Vouchers would have a face value that would grow with general inflation rather than faster-growing health care inflation. As a result, the value of the voucher could eventually fall behind the cost of coverage, requiring seniors to pay more and more from their own pockets. Many believe that the only way the GOP budget can show savings from this plan is to deliberately set the value of vouchers below the projected cost of coverage.

The GOP plan has no cost containment features. It merely shifts costs from the government to senior citizens.

While the voucher plan would not apply to current Medicare beneficiaries, it would still affect them. As younger retirees enter the new program, the oldest and sickest would remain in the “real” Medicare. With a shrinking pool of increasingly costly beneficiaries, Medicare would go into what the insurance industry calls a “death spiral.” Medicare spending would go up and seniors who remain in the Medicare group would probably see their costs go up as well.

Repeals the Affordable Care Act: The House Republican budget would repeal most of the Affordable Care Act (ACA) – the law enacted in 2010 to provide affordable health coverage for nearly all Americans, including over 30 million who are currently uninsured. Repeal would probably cancel all the new Medicare benefits provided under the ACA (see ad on this page for a list of these benefits).

Destroys Medicaid with Block Grants: Medicaid is a state/federal program that covers all low-income people who meet specific eligibility standards, including seniors who become impoverished paying for nursing home care (Medicaid pays for about 62 percent of total long-term care). The House Republican budget resolution would sharply restrict coverage under Medicaid by funding the program through block grants. Costs would be shifted to the states, where budget constraints will make it extremely difficult to maintain benefit levels and cover all the people who would normally qualify for coverage. As a result of this proposal, estimated cuts in Medicaid funds would total a whopping $1.4 trillion over 10 years, forcing at least 15 million Americans off the rolls.

Orders a Trigger for Social Security Cuts: The rules governing the congressional budget process prevented the House Republican resolution from attacking Social Security directly, but it clearly lays the ground work for benefit cuts. It establishes a “trigger mechanism” for any year that the Social Security trustees project an actuarial deficit in the trust fund over the 75-year outlook period. At that point, the trustees would be required to propose remedies for the deficit and send them to the President, who would submit legislation to Congress. Congress would then consider this Social Security legislation under a fasttrack process.

Language in the budget resolution’s summary implies that revenue-raising measures would be off the table, leaving benefit cuts as the only remedy for Social Security shortfalls.

As the budget battle moves from the House to the Senate, AFSCME Retirees Director Steve Regenstreif is urging all AFSCME retiree members to call your Senators right away and let them know you won’t stand for the kind of attacks on Medicare, Medicaid and Social Security that are included in the House budget bill. “Tell your Senators they should not support cuts and drastic changes to these critical programs, particularly in a budget that also gives tax breaks to corporations and millionaires!”

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