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Seniors' Programs Squeezed as Congress Approves 2012 Budget

In the end, plan cuts 0.2 percent from 2011 budget

A year of brutal battles over federal spending ended with a whimper — and is likely to curb some programs that affect older Americans. Social Security and Medicare, however, were largely spared the financial pinch.

Republicans, empowered by the tea party movement and a strong House majority, pressed to slash government spending, saying the deficits will overwhelm the nation's economy otherwise. Democrats pushed back, saying a recession was no time to make drastic cuts, especially to programs such as Medicare, Social Security and aid to the needy.

See also: Republicans, Democrats seek Medicare compromise.

Hands shaking with red bow - Congressional budget deal analysis

Photo by Freudenthal Verhagen/Getty Images

Bipartisan agreement leaves some programs that affect older Americans short of funds.

That clash of ideas almost took the government to the point of shutdown more than once in 2011, but with just a few hours before a shutdown would have occurred at midnight on Friday, Dec. 16, the parties agreed on a $915 billion spending bill.

The House passed the bill 296-121 on Dec. 16; the Senate passed the bill 67-32 the next day.

When previous spending bills are added, the total for discretionary spending for the year is $1.043 trillion. And that's just about back to square one, according to budget experts.

"After all the debate and negotiations that went on this year, in the end nothing came of it," says Patrick Louis Knudsen, a federal budget expert at the Heritage Foundation. The $1.043 trillion was a combination of 12 budget appropriations bills. Knudsen says that's $7 billion less than 2011, but Congress left itself wiggle room to add "disaster funding" that could bring it near or above the 2011 number.

The agreement likely leaves some programs that affect older Americans short of funds.

"We're tremendously concerned about the growing number of impoverished seniors," says Timothy J. Gearan, AARP's appropriations lobbyist. "We know there's a greater need out there."

The Low Income Home Energy Assistance Program, which has many older recipients, will receive nearly $3.5 billion — about $1.2 billion less than last year. That means about 2 million fewer households will get help with their heating or air conditioning bills, according to Gearan.

Some states will stretch the money by giving each household half as much to buy fuel, leaving some households without heat halfway through the winter. "Heat, eat or take drugs. It's a Hobson's choice," Gearan says.

Older Americans Act programs stayed level. The caregivers program will get $160 million. The nutrition program, which pays for home-delivered meals and those served at senior centers, will get $818 million. And supportive service programs, which pay for transportation to doctors and other home- and community-based services, will get $368 million.

"It's nothing to cheer about," Gearan says, adding that he's happy the programs weren't cut, but he worries how the level funding will accommodate the wave of boomers now retiring — at a rate of one person every eight seconds.

But Pete Sepp, executive vice president of the National Taxpayers Union, says most of the spending programs affecting older Americans are not deeply affected by budget cuts. "We're not talking about a jump off a cliff for funding. It's more like a baby step."

Conservatives like Sepp and Knudsen are disappointed that the budget battles didn't result in reining in the nation's deficit. But a supercommittee charged with that task was deadlocked. Because of that stalemate, automatic spending cuts are due, but they won't take effect for another year. Some Medicare provider payments will be cut, but Social Security and Medicare were largely spared from major cuts this year.

Next: The dangers of not coming to grips with the budget. >>

Knudsen says the lack of action on government spending is dangerous. "We have an immense deficit and debt problem that is getting worse," he says. "This is a lousy time for Congress to lose its grip on budgeting."

Gearan says the Social Security Administration did not get enough money for its administrative costs to keep up with demand. The increase of $43 billion for the Social Security Administration was short of the nearly $350 million needed just to keep up with cost increases such as higher rent. Already, the number of applicants for disability is rising quickly, and the average wait for claims is 500 days. He says 25 percent of applicants "will die before they get their disability claim completed."

Gearan says he also was disappointed that the Social Security disability program's integrity efforts were slashed from $756 million to $274 million. The money is used to make sure recipients are really disabled and saves taxpayers $7 to $10 for every $1 it costs, Gearan says.

One bright spot in the spending bill, he says, was that efforts to slash the new Consumer Financial Protection Bureau were squelched. The agency is charged with protecting consumers from unscrupulous mortgage companies and creditors. "Seniors are the prey of choice for many con artists," Gearan says.

Some programs were funded as part of earlier budget bills, such as the food stamps program and a housing program for older people. Food stamps received an increase; the housing program lost its money for new construction.

Gearan says he's glad many budgets didn't get cut more but still worried about programs not keeping up with a demand that is rising because of the struggling economy and the influx of boomers.

"These programs are not the source of the fiscal problems of the federal government," Gearan says, noting many of the programs have been pinched since 2000. "But they have borne the brunt."

Also of interest: AARP CEO: "Older Americans need health care, retirement security."

Tamara Lytle is a Washington-based writer who has covered Congress and politics for more than 20 years.