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Obama and Congress Set a New Washington Agenda

President-elect Barack Obama set the timetable just days after his election. “I want to ensure that we hit the ground running on Jan. 20 because we don’t have a moment to lose,” he said on Nov. 8. Two months later, his message has even more urgency. “For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied.”

He and Congress have set an ambitious and lengthy agenda. As comprehensive as it is, it has a special impact on the nation’s 50-plus population. Here are the highlights of, and the potential obstacles to, these priority items.

REVIVE THE ECONOMY

The Obama proposal: A gigantic economic stimulus bill of between $750 billion and $1 trillion that—

• Cuts taxes. The proposals amount to $300 billion for individuals and businesses, including a promised $500 cut for every taxpayer.

• Creates jobs. With unemployment at 7.2 percent, Obama hopes to create or save more than 3 million jobs over the next two years. That includes so-called green jobs that make public and private construction energy-efficient and that encourage new energy production and research. The nation’s governors and mayors have circulated multibillion-dollar lists of “shovel-ready” projects for new highway and building construction. A proposal to provide subsidies for companies that add or save jobs has been criticized because employers might be tempted to exaggerate hiring and firing plans in order to collect the subsidy. But Obama is very eager to create lots of new jobs.

• Helps troubled industries. Obama must get congressional approval for spending the second $350 billion portion of the $700 billion Troubled Asset Relief Program. That won’t be easy. In the face of wide criticism, TARP is being overhauled to require accountability from recipients and to expand assistance beyond the financial industry to the auto industry and possibly airlines and agriculture.

The 50-plus America impact: Since October, Americans have lost a collective $1 trillion from their 401(k) accounts, and an additional $1 trillion in retirement savings for those who rolled their 401(k)s into individual retirement accounts. Unemployment among people over 55 has risen by 65 percent in the past year, and one-fourth of retirees say they’ve considered returning to work because they need the income. Of homeowners facing foreclosure, 700,000 are over 50. Projected state budget cuts also affect those relying on Medicaid for long-term care and those seeking job training at financially strapped local schools and community colleges. Older Americans facing time pressure and fixed incomes are especially likely to benefit from a stronger economy.

Target date: Feb. 13, the start of Congress’ scheduled Presidents Day recess.

Key questions: Can conflicting factions of the Democrats come together? Will Democrats and Republicans work together? Will business support the effort? Can long-term costs be controlled?

Leaders to watch: Senate Banking Committee Chairman Chris Dodd, D-Conn.; Senate Finance Committee Chairman Max Baucus, D-Mont.; House Financial Services Committee Chairman Barney Frank, D-Mass.; House Ways and Means Committee Chairman Charles Rangel, D-N.Y., Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii; and House Appropriations Committee Chairman David Obey, D-Wis.

SPARK ENERGY EFFICIENCY

The Obama proposal: Double alternative-energy production in three years. Modernize 75 percent of federal buildings and improve energy efficiency in 2 million homes. Extend the Low Income Home Energy Assistance Program and provide incentives for weatherization.

The 50-plus America impact: Soaring energy prices have squeezed millions of older Americans living on fixed incomes, driving up gasoline prices and home electricity and heating costs.

Target date: Feb. 13, the start of Congress’ scheduled Presidents Day recess.

Key questions: How many of those initiatives can be squeezed into the economic stimulus package? What form will incentives for wind and solar energy production take? Will oil companies be taxed? Will gas taxes be raised?

Leaders to watch: Designated Interior Secretary Ken Salazar; designated Energy Secretary Steven Chu; designated Treasury Secretary Tim Geithner; and former Vice President Al Gore.

EXPAND HEALTH CARE AT LOWER COST

The Obama proposal, step one: Expand children’s health care. Obama wants Congress to pass a bill that expands eligibility for the State Children’s Health Insurance Program (SCHIP). The expansion would be financed by increasing the federal tobacco tax. SCHIP was vetoed twice by President Bush.

Target date: Jan. 20. Obama hopes this will be the first bill he signs.

Key questions: Will industry pressure and Senate Republicans be able to stop this plan?

Leaders to watch: Senate Health Committee Chairman Edward M. Kennedy, D-Mass., and Finance Chairman Max Baucus; Senate Minority Leader Mitch McConnell, R-Ky.; and House Speaker Nancy Pelosi, D-Calif.

The Obama proposal, step two: Health care reform as part of the economic stimulus plan. This includes several components, such as helping states with a temporary increase in the federal share of Medicaid spending and providing temporary insurance for people who have lost their jobs. Obama also wants to accelerate the use of information technology by putting all Americans’ health records online within five years.

Target date: Before Feb. 13, the first day of Congress’ scheduled Presidents Day recess.

Key questions: Can large and small businesses, state leaders and congressional factions find areas of agreement? How much aid do states need, and for how long? Will doctors’ objections and privacy fears trump the new technology? Can the House Ways and Means and Commerce committees and the Senate Finance and Health committees be persuaded to set aside turf battles?

Leaders to watch: Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, D-Nev.

The Obama proposal, step three: Comprehensive health care reform. Obama and his top aides believe that containing health care costs is critical to reducing long-term spending trends. He proposes a health care system financed by employers, by government and by individuals. He would mandate health insurance for all children. He also wants the government to negotiate for lower Medicare drug prices and proposes allowing the importation of prescription drugs from Canada and other industrialized nations. U.S. health care costs grew 6.1 percent last year, with per capita spending up to $7,400. Obama pledges to help save $2,500 per family.

Target date: No deadline.

Key questions: Can large and small businesses, hospitals and physician groups find common interests? Where does the pharmaceutical industry stand? How much opposition can the insurance industry generate?

Leaders to watch: Edward Kennedy and Max Baucus in the Senate and Charles Rangel, Commerce and Energy Committee Chairman Henry Waxman, D-Calif., and Health subcommittee Chairman Pete Stark, D-Calif., all have long-standing interest in accomplishing this.

The 50-plus America impact: Americans pay more for their health care than people in other industrialized countries yet have shorter life expectancy and higher child mortality. Health care costs grew 6.1 percent last year, and Medicare Part B premium costs grew 3.1 percent, while the Social Security cost of living adjustment was 2.3 percent

REBUILD AND UPDATE TRANSPORTATION

The Obama proposal: Repair bridges and highways and invest in new energy-efficient rail and public transit projects.

The 50-plus America impact: High energy prices have made older Americans more dependent on both public transportation and home-delivered services.

Target date: Feb. 13, the start of Congress’ scheduled Presidents Day recess.

Key questions: How much of this will fit into the economic stimulus plan?

Leaders to watch: Nancy Pelosi, House Transportation Committee Chairman James Oberstar, D-Minn., Senate Commerce and Transportation Committee Chairman John D. Rockefeller, D-W.V., and the chairmen of the Appropriations committees.

MAKE GOVERNMENT WORK

The Obama proposal: The Obama administration and the new Congress take office at a time when just 7 percent of the American public believes the country is heading in the right direction. Part of the public dissatisfaction stems from the inability of government agencies to deliver public services. Public angst intensified with the poor government response to Hurricane Katrina in 2005, the lax oversight of Wall Street investors, the failure to anticipate the depth of the housing collapse and the ineffective response to the economic crisis and spiraling budget deficits. Among Obama’s immediate challenges:

• Tighten regulations and oversight. Congress and Obama will impose tighter oversight and regulations on business and federal regulatory agencies seen as lax, particularly at the Securities and Exchange Commission. Public anger at Wall Street, especially in the wake of the $50 billion Bernard Madoff investment scheme, should make this task easier.

• Revitalize the housing market. This includes giving bankruptcy judges more flexibility in changing mortgage rates in foreclosure cases, something that had been opposed by the banking industry until recently. This is of critical interest to nearly 700,000 age 50-plus homeowners facing foreclosure. It also involves determining whether giant government agencies Fannie Mae and Freddie Mac should be replaced or restructured.

• Complete the 2009 federal budget. Congress couldn’t finish work on the 2009 budget, so it extended last year’s spending levels until March 6. By that date, the last eight appropriations bills must be enacted and signed.

• Pass a 2010 federal budget. By late February or early March, Obama must propose his spending plans for fiscal year 2010. Congress must then consider and pass the necessary appropriations bills before the new fiscal year begins on Oct. 1. With a $1.2 trillion budget deficit projected for the current budget, this will not be pretty.

The 50-plus America impact: From long waiting lines at the Social Security Administration to a bungled analog-to-digital television conversion to distorted spending priorities, older Americans have long been shortchanged by the federal government’s uneven performance.

Target date: Jan. 20, Inauguration Day.

Key questions: Will Obama’s economic stimulus work? Can he maintain momentum? Can he achieve and sustain bipartisan support?

Leaders to watch: Nancy Pelosi, Harry Reid, House Blue Dog Democrats, Mitch McConnell and White House Chief of Staff Rahm Emanuel.

MAKE HISTORY

The Obama proposal: In the face of the starkest economic challenge since the Great Depression seven decades ago, Obama has proposed an ambitious economic plan that affects all aspects of the national economy. Like it or not, the plan and the consequences will be compared to the New Deal initiatives of President Franklin D. Roosevelt. In Roosevelt’s first 100 days, he enacted 15 major pieces of legislation.

The 50-plus America impact: If the national economy begins to recover, Americans 50 and over benefit. Restoring consumer confidence and reviving retirement savings are crucial.

Target date: May 1, the 100th day.

Key questions: Can Obama achieve small successes early and build on them? Will international pressures or an unexpected crisis undermine his ambitious agenda?

AARP’S LEGISLATIVE PRIORITIES

As President-elect Obama takes office and the 111th Congress begins its work, AARP has identified four primary objectives:

(1) Provide national economic relief;

(2) Fix the national health care system;

(3) Put all Americans on the path to retirement security;

(4) Strengthen our nation’s communities.

Click to see the complete list of legislative goals.

Jim Toedtman is the editor of the AARP Bulletin.

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