December 15 2010:Get Active to Protect Entitlements (Social Security, Medicare and Medicaid)

The issues of deficit reduction, extending Bush-era tax cuts, and “entitlement reform” (Social Security, Medicare, and Medicaid) are becoming red hot in the Washington, DC policy and political arenas. These issues are likely to grow hotter in the next Congress over the next 2 years, leading up to the 2012 elections. To respond to these recent and anticipated developments, the new national “Strengthen Social Security” campaign (www.strengthensocialsecurity.org) has been launched to push-back against bad ideas and promote good ideas concerning Social Security. We urge you to check them out and consider joining as a group or signing up for their email list as an individual. 

The new federal health care reform law (the Affordable Care Act, or ACA) contains a variety of measures to improve Medicare and Medicaid. How the coming fight over Social Security plays out and turns out will very much determine whether and how changes to Medicare and Medicaid are implemented under the ACA, or whether much more radically destructive changes are pursued that will undermine the fundamentals of these health care programs as social insurance. 

Here in NYC, the New York Network for Action on Medicare and Social Security (NYNAMSS), a coalition we have co-chaired since its founding in 1998, has joined forces with the New York State Alliance for Retired American (NYSARA), our state affiliate of the national ARA (the retiree arm of the AFL-CIO), to lead the Strengthen Social Security campaign in our area.  We invite your participation in this new effort, and to attend our next meeting coming up this Friday morning Dec. 17 at Teamsters Local 237 (see notice below.) 

To provide a bit of background on recent developments:

The co-chairs President Obama’s “deficit reduction commission” (aka, the National Commission on Fiscal Responsibility and Reform) released their proposals on Dec. 1^st. They were not officially endorsed by the full commission via a super-majority at its final meeting on Dec. 3^rd. The chairs’  ideas for Social Security included:

o Raising the normal retirement age from 67 to 69 years (by 2075)

o  Raising the early eligibility age from 62 to 64 (by 2075)

o Adjusting the basic benefit formula down slightly for middle and upper-income beneficiaries while raising the floor a bit for low-wage workers

o Changing the formula used to determine annual cost-of-living adjustments (“COLA”) by shifting from the “standardâ€� to a “chainedâ€� consumer price index.

o Raising the cap on taxable income for Social Security to capture up to 90% of all wages, the historic benchmark for the program which has fallen over the past 2 decades to 86% as income inequality has grown

The deficit commission co-chair’s proposals for health care included:

o Combining and reforming cost-sharing requirements (deductibles, co-pays, co-insurance) for Medicare Parts A and B

o Instituting deductibles and co-insurance for all private Medicare supplemental (“Medigap”) plans

o Mandate that people on both Medicare and Medicaid enroll in managed care plans/programs

o Reforming or repealing the new “CLASS” act (long-term care insurance) provision of the ACA

o Moderating the growth of Medicare payment rates to doctors

o Lower Medicare payments to hospitals for Graduate Medical Education and bad debt

o Give states more flexibility over their Medicaid programs via waivers from program requirements

o Pursue medical malpractice/tort reforms, including caps on punitive/non-economic damages

o Establish a long-term global budget for federal health care spending, to a target GDP + 1%; if target is exceeded, mandate consideration of fundamental changes to Medicare and Medicaid as social insurance programs

 One of the provisions of the tax cut deal President Obama recently reached with Senate Republican leaders proposes a one-year “Social Security tax holiday”, whereby employees’ contributions to the program will be lowered during 2011 from 6.2% to 4.2%. (Note: employers contributions will remain at 6.2%.) This measure is intended as an economic stimulus to counter the ongoing Great Recession.  However, it will cost the Social Security Trust Fund $120B that would otherwise be paid into it, and it is not certain if and how those funds will eventually be replaced.  If approved by Congress, this move would be the first time in the program’s 75-year history that Social Security’s Trust Fund’s contributions are being explicitly used/displaced for non-Social Security purposes. Many are worried that this sets a very bad precedent, and also about the implications for the Trust Fund’s long-term finances. 

These and other issues will be discussed at this Friday’s meeting, including action plans to target the New York Congressional delegation, and activities people can do in their own communities to influence public opinion on Social Security.Please join us if you can, or have your organization or union send a representative.

Metro New York Health Care for All - 40 Worth Street, Suite 802, New York, NY 10013 - Phone: 212-925-1829