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Wednesday, 20 February 2013

What Sequestration Means for Elders

In nine days, on 1 March, the so-called “sequestration” - also known as the Budget Control Act - will take effect meaning automatic and immediate across-the-board cuts to federal spending in the amount of $85 billion for 2013.

That is, it will happen unless Congress passes new legislation that would forgo the sequestration or, at least, postpone it for awhile. But as usual with Congress when one of their regularly-scheduled and manufactured crisis deadlines is imminent, they're out of town and off the job until next week.

Meanwhile, some Congressional Republicans are saying (with barely concealed glee), let it happen and damn the consequences, while President Barack Obama sticks his nose in front of a camera every day predicting terrible things if sequestration is not stopped.

So I was wondering what happens on 1 March, what concrete changes take place in Americans' lives and particularly in the lives of elders. It's harder to find out than you would think. My knee-jerk tendency for such lack of information is to blame the media for not doing their job and I am not absolving them but even the government doesn't seem to have details.

The OMB – Office of Management and Budget – is responsible for interpreting the law of the Budget Control Act and they aren't saying much. So here's what little I did dig up.

WHAT DOES “NOT” CHANGE
There are cuts to both mandatory and discretionary spending in both defense and domestic budgets. Domestic discretionary spending takes the biggest hit although certain federal programs are exempt. These include but are not limited to:

  • Social Security
  • SNAP (food stamps)
  • Pell Grants
  • Veterans Administration
  • CHIP (children health insurance)
  • Military pay

Medicare and Medicaid are exempt except for a two percent cut to providers only. So the three major programs that affect elders are preserved. But you and/or your families are certain to be otherwise affected.

WHAT DOES CHANGE
I'm not supplying links about the sequestration because there would be one for nearly every word in this post. For the small amount of information I feel confident about giving you, I read dozens of websites, news stories and opinions along with reports from government agencies, Congress, the White House, NGOs, and other organizations. Nobody knows much and they all use too many such words as maybe, perhaps, could, might.

Here is what I could glean. Where I cite dollar amounts, I am repeating what I've read and can't be certain they are correct but they seem sensible enough to mention.

First, there will be almost immediate layoffs and/or temporary furloughs of federal employees. Generally, the cuts are about ten percent of budget so some agencies will meet that obligation with temporary furloughs and then bring their people back.

That is what will probably happen with the Social Security Administration - some employees will be furloughed for a few weeks which, of course, will slow down new applications and other customer service.

A direct hit on elders will be the Meals on Wheels program. Probably not right away, but in time it could mean four million fewer meals delivered.

By various estimates, permanent layoffs throughout the federal government could account for between hundreds of thousands and two million jobs which would have, of course, a negative affect on the unemployment rate which could jump to 9 percent.

In no particular order, here some of the funding reductions that will take place:

  • Head Start
  • Treatment for the severely mentally ill
  • Fewer food inspections
  • End to FEMA grants for firefighters and EMTs
  • Furlough of 1200 to 2200 air traffic controllers
  • TSA cutbacks
  • 24,000 Homeland Security jobs affecting ongoing disaster relief
  • Nutrition programs for women, infants and children would lose $543 million
  • Rental assistance for the poor would lose $2.3 billion
  • Layoff of 6,000 federal corrections officers
  • Decreased clean air regulation enforcement

...among many others.

ELDERS AND THE DEFICIT
While Obama turned up pressure on Congress yesterday to act before the 1 March deadline, he repeated what has become his let-elders-pay-for-the-deficit mantra, saying that he has

”...laid out specific reforms to our entitlement programs”

By which we have come to understand that he means enacting the chained CPI for calculating cost-of-living increases to Social Security.

Again, for the zillionth time, Social Security is a closed system. It does not contribute a penny to the deficit. Beneficiaries paid into this program all their working lives and to cut benefits is stealing money from old people who have no means to make up the difference.

Anyone who says he or she is willing to give up some of their Social Security benefit, please ask yourself if you are willing to give up the earned interest in your savings account. The principle is the same however meager bank interest is these day.

And to what purpose would you give it up? To whose benefit would this be agreeable to you? You can be damned sure no rich person is giving up either his Social Security or his tax loopholes.

While you think this over, consider that most Social Security beneficiaries are much more poor that you probably are. Those who receive the average of about $1200 a month need every penny.

And that's average. Millions whose employers never offered them a pension, who earned too little to save anything or who lost what little they had set aside in the 2008 crash live on far less than $1200.

Please do not be so quick to give away the money of people less well off than you who scramble to barely get through each month.

As to means testing? Social Security is already means tested. Beneficiaries whose total income exceeds only $25,000 for singles ($32,000 for couples), pay taxes on their benefit. Additional means testing would turn Social Security into a poverty program vulnerable to every cost-cutting whim of Congress (see sequestration cuts to poverty programs above).

There is no way to know yet if President Obama will try to give away elder's COLA in any budget agreement before or after sequestration. If he does, I know Senator Bernie Sanders will be fighting tooth and nail to prevent it and so will I. I hope you will be too.


At The Elder Storytelling Place today, Arlene Corwin: A Nose in My Ear


Posted by Ronni Bennett at 05:32 AM | Permalink | Email this post

Comments

Thanks for the info, Ronnie. Were it not for you, I would know nothing!

Thanks for your research and for sharing this information with us.

Many thanks for distilling so much info into easy-to-undertand content. As you say, there is way too much doubletalk for the casual reader to absorb. The hardest thing for me is to realize that "ANYTHING is okay to cut as long as tax increases are not part of it."

The government needs money to do the work we elect politicians to do. Maybe we don't agree with everything the government does, but we all benefit from much of it, so we put up with the rest (and some of us holler about priorities like dumb wars.)

We're all in this together. Some people have money -- taxes are the dues they pay be in the club. The folks who have money will have to pay more than than those who have less -- why? Because they can. Like it or not, we're all in this together.

We have a lot of people and a Republican party who seem to need to repeat these lessons most of us learned in kindergarten.

What everyone else said goes double for me. (After the beating I took yesterday, I'm afraid to say anything but I think you know I'm with you.)

Thank you Ronni.... Always you
are "right on" with your words!

When messages reach me via computer, more and more are asking for monetary donations, or funding of organizations, or phone calls, to show my support.

I do not donate or phone! My SS income does not permit! I do support with my signature...That never seems sufficient! This needs to change also....

Thanks for working so hard to provide us with some clarity on the situation.
-steve

Fact Check:

The sequestration amounts to cutting the equivalent of 0.25% of GDP. That's hardly likely to cause much if any pain to the economy. I predict the stock market will go straight up if the sequestration happens.

The sequestration cuts 5% from domestic agencies and 7% from the defense budget. Any manager who can't find 5% of waste in their organizations to cut isn't worth her weight in salt. That small amount should not affect the output of any government agency -- unless of course Obama wants it to have an effect (for political purposes).

The sequestration was actually Obama's idea. If he hadn't come up with the idea, then we wouldn't be worrying about it now (or should I say -- YOU wouldn't be worrying about it now -- I'm not worried about it myself).

Republicans in Congress have actually passed two different bills in an attempt to avoid the sequestration. Obama and the Democrats won't accept their answer because it doesn't raise taxes -- something Democrats fought for in December-January and won on. Now they want to continue raising even more taxes rather than taking the logical step of cutting waste out of government programs.

Regardless of what happens, no senior will lose Social Security benefits or miss a paycheck. No senior will lose Medicare benefits. The ONLY way that either of those could happen would be for Obama, as chief executive, to decide to do that. But that would be an unnecessary step done purely for political reasons.

So sit back and watch the theatrics. That's about all this hype is worth.

Thanks for providing us with this info. I've been pretty much in the dark.

Good information--from Ronni's post, as usual, as well as from the article and the comments, esp. Jim Smith's (a different perspective).

For the record, I oppose reductions to SS. I understand that SS does NOT contribute to the deficit. I think I've been pretty clear in stating that before I'd consider any--repeat, any--changes to SS, such as "chained CPI", other steps would need to be taken. What steps? 1) Close tax loopholes and overseas tax havens that operate to the sole benefit of the wealthy. 2) Eliminate the earnings cap so that high earners pay SS taxes on ALL their earnings. 3) Limit SS payments to those who have retirement incomes in the hundreds of thousands or millions of dollars for whom SS is pocket change. (Think the Bush and Romney clans, Karl Rove and the Koch brothers.) To be fair they should receive back the amount they contributed plus interest. 4. Crack down on corporate tax evasion.

Of course low-income recipients of SS need every penny! No one can argue that. My husband and I will need our full SS checks when I retire completely in a couple of years--like most middle-class retirees. If enacted, CPI should NOT apply to individuals whose retirement income is less than, say, $60K/year ($90K for couples), with higher limits for those who have extraordinary out-of-pocket medical costs.

Thanks, Ronni, for all your research. It helps to have someone who will separate the wheat from all the chaff. Lord knows there are too few such advocates.

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