Week Ending May 27, 2011
Senate Rejects Ryan Budget
This week, the Senate rejected the House-passed budget authored by Rep. Paul Ryan (R-WI) by a vote of 40-57, mostly along party lines. Senators Olympia Snowe (R-ME), Susan Collins (R-ME), Lisa Murkowski (R-AK), and Scott Brown (R-MA) crossed party lines to reject proposed radical changes and cuts to Medicare. Sen. Rand Paul (R-KY) also voted no, believing the cuts were not deep enough. The Senate also rejected the budget proposal introduced by Sen. Pat Toomey (R-PA). Both plans would slash programs and services that are critical to low-income and working families, cut and cap Medicaid and other safety net programs, and reduce taxes for the wealthiest taxpayers and corporations. The Toomey budget would have made even deeper cuts to Medicaid and domestic programs that working families rely on, but it would not have changed Medicare’s structure. The Toomey budget was defeated 42-55 along party lines, with Senators Brown, Snowe, and Paul opposing it. The Senate also unanimously opposed a resolution based on the President’s budget.
It is unlikely the Senate will pass its own budget. AFSCME continues to press the Senate to support adequate funding for domestic programs and to preserve Medicare and Medicaid.
House Prepares for Debt-Ceiling Vote Next Week
The House of Representatives may vote next week on a “clean” bill to increase the debt-ceiling that does not include any deficit reduction measures in what Republican leaders believe to be a strategic move to show that the House will not increase the debt limit without significant legislation to reduce the federal debt. Holding the debt-ceiling hostage to complicated, broad budget legislation could seriously harm the nation’s economy, destroy our global credit rating, crush the fragile housing market, increase interest rates, and increase unemployment if the increase is not approved. The Treasury Department has already taken extraordinary measures to extend our nation’s credit, but those efforts will not last beyond August 2. AFSCME has been pressing for a clean debt-ceiling bill to protect our nation’s fragile economy.
GOP “Jobs Agenda” Unveiled
House Republican leaders released a “new jobs” agenda. However, for the most part, it is a repackaging of policies they have been pushing for some time now. Major elements include more reckless tax cuts, government deregulation and greater incentives for corporations to ship American jobs overseas, including adoption of the three pending free trade agreements with Colombia, Panama, and South Korea. AFSCME President Gerald W. McEntee said in a statement: “These are the same failed policies that produced the economic disaster we have been living with since the Bush administration. Lax regulations and one-sided trade agreements drove our economy off the cliff. Instead of putting people back to work, investing in our schools and the vital services communities rely upon during difficult economic times, the Republican leadership promises more handouts for Wall Street and the oil industry. This isn’t a jobs agenda. It’s a recipe for prolonged unemployment while transferring more of the tax burden onto middle-class families.”
Quarter of a Million Seniors Save $166 Million on Rx Thanks to Affordable Care Act
Medicare provides access to prescription drugs for millions of beneficiaries. An important provision in the Affordable Care Act (ACA), signed into law by President Obama in March 2010, requires drug companies to provide a 50% discount on covered drugs for Medicare beneficiaries who are in the Medicare prescription drug gap, called the donut hole. So far, more than a quarter of a million people across the nation have used the discounts to save an average of $613, for a total of $166 million. This critical relief for seniors with high prescription drug costs is part of the early implementation of the ACA. Assistance for Medicare beneficiaries who have high prescription drug costs will expand, and by the end of the decade the coverage gap in the Medicare prescription drug program will disappear. This lifesaving help for people with Medicare would be gone if the budget authored by House Budget Committee Chairman Paul Ryan became law. The House adopted Chairman Ryan’s budget along party lines in April.
Bill Introduced Providing Help for Early Retiree Health Care
Senators John Kerry (D-MA), Debbie Stabenow (D-MI) and Richard Blumenthal (D-CT) introduced legislation this week (S. 1088) that would provide an additional $5 billion in funding for the successful Early Retiree Reinsurance Program. This ACA initiative encourages a wide range of businesses, states, local governments, non-profits, religious organizations and other groups to continue to offer health insurance to their early retirees (individuals age 55 to 64) by providing immediate financial relief to cover those with costly catastrophic medical expenses. Congress appropriated $5 billion for this temporary program, which by law must end no later than January 1, 2014. However, due to the overwhelming response from employers, including state and local government employers, the program will no longer be accepting applications. The bill would allow more employers to participate in the program and would further reduce the cost of retiree coverage to the current program participants.
New Analysis Shows State-By-State Impact of House-Passed Budget on Medicare Beneficiaries
A recently released state-by-state analysis by the U.S. Congress Joint Economic Committee (JEC) finds that in every state, out-of-pocket health care costs will more than double for those turning 65 in 2022 under the House-passed budget plan. Under this budget, authored by Budget Committee Chairman Ryan, Medicare benefits would be cut and the traditional program would be converted into a voucher-like program starting in 2022.
Previously, the non-partisan Congressional Budget Office estimated that a typical 65-year-old Medicare beneficiary in 2022 would see their out-of-pocket health care costs increase from $6,154 to $12,513 under the House-passed budget. JEC’s analysis is based on that data and data from the Centers for Medicare and Medicaid Services. The increase varies by state, but residents in all states will see their out-of-pocket expenses more than double when they turn 65 in 2022. Floridians face the largest increase – $7,383; New Yorkers would face an increase of $6,518; Californians would see their out-of-pocket costs rise by $6,057.
The traditional Medicare program provides life-saving health care coverage and financial security for older Americans. In 2009, fewer than two percent of older Americans were uninsured. Indeed, nearly all older Americans are Medicare beneficiaries, and the program currently serves more than 47 million people. AFSCME strongly opposes turning Medicare into a voucher or cutting Medicaid, which is vital to low-income seniors, individuals with disabilities, state budgets and the economy.
Rep. Ryan’s Medicare Plan Would Consume Social Security Benefit Over Time
A just released report by the Social Security Works and the Strengthen Social Security Campaign documents the erosion of Social Security benefits that would occur if the House-passed budget’s Medicare plan became law. According to the Campaign’s analysis, the typical senior would have to spend half of their Social Security benefit in 2022, the first year the plan goes into effect to buy the kind of coverage that Medicare provides today. By 2041 – just 19 years after the Medicare voucher would begin – an average worker’s Social Security benefit is estimated to be worth less than what their Medicare costs are projected to be.
House Votes to Undermine Funding for Training Primary Care Providers
In another effort to roll back provisions of the ACA, the House voted on Wednesday to approve a bill that would undo steps taken in the ACA to ensure funding for graduate medical education in teaching hospitals. The vote on H.R. 1216 was largely along party lines with only three Democrats supporting the repeal measure and four Republicans opposing it.
Over the last decade, experts have warned that the nation faces a shortage of primary care providers. In response to this concern, the ACA provided a more certain funding stream for teaching hospitals to increase the number of primary care providers, including family physicians and pediatricians. Without the certainty of funding, teaching hospitals are not able to plan and support a training program that requires a three-year commitment.
Most Americans Strongly Support Medicaid As We Know It
In poll results released this week, the Kaiser Family Foundation reported that 60% of Americans want to retain Medicaid as it is, with the federal government guaranteeing coverage and setting minimum standards for benefits and eligibility. Only 25% of respondents supported converting the program into a capped block grant that would increase the number of uninsured, increase financial pressure on states and health care providers, and cause more low-income people to be without health care and long-term services, particularly during tough economic times. In addition, only 13% say they would support major reductions in Medicaid spending as part of deficit-reduction efforts.
This strong support for Medicaid is likely a reflection of how many survey respondents have a personal connection to Medicaid: about 20% have received health coverage, long-term care, or Medicare premium assistance from Medicaid themselves, and 31% have a friend or family member who has received this type of assistance. These poll results refute those lawmakers who believe that Americans would support trading Medicaid cuts for the politically-toxic Medicare cuts in the House’s budget plan.
Full Implementation of the Affordable Care Act Needed to Reduce Number of Uninsured and Costly Hospital Stays
The first wave of requirements of the ACA is clearly working to reduce the number of uninsured. Early on, the law required that insurance companies allow people younger than 26 to remain on their parents’ health plans. WellPoint, the nation’s largest publicly traded health insurer, added 291,000 – or a third of the company's 875,000 new members in the first quarter of 2011 – because of the dependent eligibility rules. Kaiser Permanente added 90,000 new enrollees, while Highmark added 72,000.
The reduction in the number of uninsured is good news, but a recent report on uninsured hospital stays suggests that full implementation of the law is needed. The report, Uninsured Stays, found that hospitals stays for uninsured patients jumped 21% between 2003 and 2008, after holding steady for the previous five years. In 2008, an estimated 15.4% of the U.S. population was uninsured. Because few families without health insurance have the financial resources to pay potential hospital bills without insurance, they are one illness or accident away from staggering medical debt and possible financial ruin. When families cannot bear this costly burden, the cost of uncompensated care contributes to increases in health care costs for all of us. Full implementation of the ACA is needed to further reduce the economic, health and societal losses that result from high numbers of uninsured Americans.
House Education Committee Cuts Half of K-12 Programs
This week, the House Education and the Workforce Committee began its efforts to reauthorize the Elementary and Secondary Education Act (ESEA), the nation’s K-12 education law. The panel voted 32-16 along party lines to eliminate 43 Education Department programs, claiming wasteful spending. Nine of the programs had either been proposed for elimination by President Obama in his FY 2012 budget or never funded, and one was slated for elimination. This bill is the first in a series of bills to update ESEA. The next measures will cover funding flexibility, charter schools and accountability systems created under No Child Left Behind (NCLB). AFSCME will continue to support programs for high quality public schools.
Chrysler Announces Early Repayment of Government Loans
This week, Chrysler Corporation announced that it was retiring the balance owed on loans to the company made by the U.S. and Canadian governments – six years ahead of schedule. The automaker paid $5.9 billion to the U.S. government and $1.7 billion to the Canadian and Ontario governments. The payments are a milestone for an industry that, two years ago, was on its back. Millions of jobs across the nation in manufacturing and auto-related services would have been lost without the loans made to both Chrysler and GM.
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