Bush's Budget Proposal Would Cut Older Americans' Benefits
By: Elaine S. Povich; Source: AARP Bulletin Date Posted: 2007-02-14 15:44:00-05:00
President George W. Bush's fiscal 2008 budget proposal, submitted on Feb. 5 and now headed for debate by an already skeptical Congress, calls for a variety of service cuts—and/or cost increases—that may hit many older Americans pretty hard.
For instance, individuals making over $80,000 a year and couples with annual incomes in excess of $160,000 could face even higher Medicare premiums in 2008. And all Medicare beneficiaries might see higher costs or reduced benefits with Bush's proposal to trigger automatic cuts in Medicare if federal spending reaches more than an arbitrary 45 percent of the total cost of the program. That threshold now merely triggers a funding warning, but the Bush plan would have real teeth—a 0.4 percent reduction in the program across the board.
Bush's budget would hit low-income seniors particularly hard, via cuts in energy assistance programs, housing subsidy programs and payments to states for administrative costs of Medicaid, which might push states to cut the programs themselves. Those cuts also could have the effect of nipping state-sponsored universal health insurance plans—such as Massachusetts' recently adopted plans and California's proposed effort—in the bud, as states are basing their plans on steady federal income.
"The Massachusetts and California plans rely heavily on existing Medicaid and children's health insurance funding levels," said Edwin Park, an analyst with the nonprofit Center on Budget and Policy Priorities (CBPP) in Washington. "Those types of reforms would be much less likely if these cuts are enacted."
For the State Children's Health Insurance Program, Bush is requesting $5.4 billion in 2008, a reduction of $223 million, or 4 percent, from this year's level. Beyond the current levels of spending, the White House is seeking an "additional allotment" of almost $5 billion over the next five years. But experts in Congress say it needs about $12 billion or $14 billion just to maintain coverage of those currently enrolled, to say nothing of expansion, which some states are eager to undertake.
David Certner, AARP’s legislative policy director, says the president’s budget “has received a chilly reception, but it has put forward a whole series of cuts, a menu so to speak” for Congress to choose from—to accept, reject or modify.
Early Reaction From Capitol Hill
House Ways and Means Committee Chairman Charles Rangel, D-N.Y., suggests the Bush administration might want to reread the November election results that catapulted Democrats into the majority on Capitol Hill.
"When I look at some of the cuts proposed in this budget . . .$66 billion out of Medicare, further restrictions to food stamps, cuts to Medicaid and children's programs, and the request that we make permanent his tax cuts—it sounds to me like this is precampaign talk from the president," he said at a House hearing Feb. 6.
House Budget Committee Chairman John Spratt, D-S.C., was more skeptical: "I doubt that Democrats will support this budget, and, frankly, I will be surprised if Republicans rally around it either."
Sen. Charles Grassley of Iowa, the highest-ranking Republican on the Senate Finance Committee, insists that costs have to be restrained somehow, but stops short of saying that Bush's proposals are the only way. "On entitlement spending, there's no sugar-coating the challenge before us,'' Grassley said in a statement.
Sen. Michael B. Enzi of Wyoming, the ranking Republican on the Health, Education, Labor and Pensions Committee, didn't criticize the budget but noted that the final document "may look very different from the president's proposals."
Bush's proposal to "means test" the Medicare Part D prescription drug benefit—so that people with higher incomes would pay higher premiums—could follow the lead of Medicare Part B in covering doctors' costs.
AARP opposes means testing, arguing that people already pay taxes for Medicare based on their incomes and shouldn't be socked with income-related premiums as well. "Everybody pays into it; everybody gets something back," Certner says.
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