August 03, 2011

The Debt Deal for Seniors

This afternoon, the long-anticipated deal on raising the debt ceiling
is expected to pass out of the Senate and signed into law. The good
news about the deal is that your letters, emails, protests and calls
to Congress have temporarily protected Social Security, Medicare, and
Medicaid beneficiaries from budget cuts. Congratulations!

Although one trillion dollars in discretionary cuts must be made in
the first round of cuts, there can be no cuts to Social Security or
Medicaid and no cuts to Medicare beneficiary services. That’s great
news! You did this! However, there is no “shared sacrifice” in this
plan. Not yet, anyway.

For the next round of cuts, the deal requires Congress to set up a
committee of six Republicans and six Democrats who must propose a
second round of about $1.3 trillion in cuts by November 23, 2011.
These cuts will enable the debt ceiling to be raised again.

The bad news is that in the second round of cuts, anything goes.
Entitlements can go on the chopping block, but also taxes can be
raised,. That means seniors need to keep making calls and writing
letters. If one committee member waffles, it can leave millions of
seniors vulnerable. These members will be chosen in the next two or
three weeks.

Congress must take an up-or-down vote on the committee’s proposal by
December 23, 2011.

If the committee’s proposal does not pass or if the committee cannot
agree on a proposal, the debt ceiling will still be raised, but an
across-the-board cut of about $1.3 trillion is triggered. This
across-the-board cut cannot include Social Security, Medicare, or
Medicaid benefits. However, 2% in Medicare provider cuts can be made.
Half of the cuts must come from defense, which is a huge and
unprecedented change in budget negotiations.