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Statement by AARP CEO Bill Novelli in Reaction to the President's 2008 Budget

While there is no doubt that the country has fiscal challenges, everyone must come to the table to talk about the solutions.

Together we need to address the health care crisis. We must take steps that address the system wide need to cut waste and improve performance in health care. The $95.6 billion in cuts to Medicare and Medicaid proposed in the President’s 2008 Budget reflect an ongoing and annual rite in Washington—piecemeal cuts that threaten to damage critical programs without addressing the fundamental problems that exist in our entire health care system.

The budget also proposes a ‘hard trigger,’ or an arbitrary cap on Medicare spending, which, if exceeded, would result in increased patient cost-sharing and an indiscriminate, across the board cut in provider reimbursements. The cap would increase out-of-pocket costs and reduce quality of care for the millions of older Americans and those with disabilities who rely on Medicare, while doing nothing to rein in skyrocketing health care costs.

The budget would also increase income related Medicare premiums that further shift costs to beneficiaries. Workers already pay into the Medicare system based on their income and beneficiaries also pay based on their income through federal income taxes.

Further, the proposals to cut 25 percent from the regular funds to the Low-Income Home Energy Assistance Program, combined with the 40 percent cut to the Weatherization Assistance Program, will leave millions of families out in the cold. With continued high fuel prices, we urge lawmakers to resist these cuts.

Lastly, given the nation’s historically low savings rates, AARP supports individual accounts that supplement a strengthened Social Security benefit. Congress should tackle Social Security sooner rather than later, since the sooner we act, the more modest the steps necessary to ensure the long-term solvency and adequacy of Social Security.

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