October 30, 2015

Budget Deal Protecting Social Security and Medicare Beneficiaries Passes U.S. House

Congressional leaders and the White House announced on Monday that they had reached a deal to avert default and keep the government funded. Outgoing House Speaker John Boehner helped arrange the deal, which also cleared the way for new Speaker Paul Ryan to become the new Speaker without having to worry about clashes over the debt limit and budget issues until 2017.

Without the deal, some 30% of 54 million Medicare beneficiaries would have seen Part B premiums jump 52% in 2016, from a base rate $104.90 per month to $159.30. With the deal, about 16 million beneficiaries would see their Part B premiums rise 14% instead, to a new base rate of $120 per month in 2016, plus a $3-per-month surcharge.

In addition to smoothing out the Medicare premium spike, the budget deal also prevented a looming cut in Social Security disability payments. It re-allocates payroll taxes among Social Security program trust funds to ensure solvency of the disability insurance program. The disability insurance trust fund was on pace to run dry in 2016, and millions of Americans were going to get an automatic 19% reduction in their Social Security disability insurance benefits.

The deal cleared the House on Wednesday by a tally of 266-to-167, with Democrats providing the bulk of the yes votes. Republicans were divided on the bill, with 79 voting yes and 168 voting no. No Democrats voted against the bill. Senators voted 64-35 to approve the legislation shortly after 3 a.m. on Friday, and President Obama is poised to sign it into law.

“Movement to prevent a default and avert a government shutdown is welcome news for all Americans, but the deal is not perfect,” said Richard Fiesta, Executive Director of the Alliance.

“We would have preferred no increase to Medicare Part B premiums; however, limiting the increases of those who are not ‘held harmless’ is a step in the right direction,” he added.

In early October, Virginia Alliance President Ron Thompson of Ivor, Virginia spoke at a Capitol Hill press conference on how the increase would financially harm him. Over the last two weeks more than 30,000 Alliance members contacted their Members of Congress saying that a 52% premium hike was unfair and unwarranted.

“Our voices were heard,” said Mr. Fiesta. “While it appears a crisis has been averted, we have not improved retirement security for our nation’s seniors by expanding their earned Social Security benefits. We will continue to fight to make that a reality by urging Congress to implement a more accurate way to calculate cost-of-living adjustments: the Consumer Price Index for the Elderly (CPI-E),” Fiesta concluded.

 

 

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