The Senior Citizens League (TSCL) Legislative Agenda 113th Congress
With more than one million members, The Senior Citizens League (TSCL) is one of the nation’s largest nonpartisan seniors groups. Our mission is to promote and assist TSCL members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. citizens, and to protect and defend the benefits earned and paid for by senior citizens.
At TSCL, we strive to defend those issues that are most important to our members and supporters. That’s why, each year, we survey our members and ask them, “What’s important to you?” We take those answers and base our legislative agenda around them. For the 113th Congress, our agenda includes the following issues, among others.
Comprehensive Social Security Reform
Long-term solvency for Social Security is essential. Due in part to the economic downturn and the stagnant recovery, the Trust Funds have been paying out more in benefits than they have collected in payroll taxes since 2010. In addition, last year Social Security’s Board of Trustees announced that the Trust Fund reserves are projected to face exhaustion in 2033 – three years earlier than projected in 2011.
TSCL understands that action to reform the program will be required well before 2033. In order for changes to be phased in gradually and with minimal effect on beneficiaries, we hope that lawmakers will enact modifications in the near future. We know that small changes to the program are likely, however, harsh benefit cuts will not be tolerated.
Social Security COLA Fairness
This year, seniors are receiving the lowest cost-of-living adjustment (COLA) paid in the past decade, at just 1.7 percent. The low COLA comes close on the heels of two years when no COLA was paid, in 2010 and 2011. After lobbying for emergency COLAs during those years, TSCL was disappointed that Congress did not enact one to help offset increases in Medicare premiums and to protect the buying power of Social Security benefits.
TSCL strongly believes that the Social Security COLA that seniors receive does not accurately reflect how they must spend their money. Our studies and surveys indicate that the current COLA is growing too slowly and does not accurately measure inflation experienced by seniors. In fact, an analysis by TSCL in 2012 found that seniors have lost 34 percent of their purchasing power since 2000.
Currently, the COLA is based on a consumer price index (CPI) that reflects how young, urban workers tend to spend their money, called the CPI-W. However, older Americans spend a disproportionate share of their household budget on health care and the CPI-W fails to capture that. Since health care costs continue to rise so quickly – and since most health care spending cannot be substituted for something cheaper – TSCL believes that seniors would be better served if their COLA were based upon a consumer price index for elderly consumers, or the CPI-E.
The CPI-E regularly puts the spending inflation for seniors at two-tenths of a percentage point higher than the rate at which the CPI-W increases. That may seem like an insignificant amount, but over a twenty-five year retirement, COLAs do accumulate. We estimate that a senior who retired with average benefits in 1984 would have received $13,723.16 more through 2011 if the CPI-E had been used.
TSCL members and supporters believe that the CPI-E should be fully implemented and utilized for determining seniors’ Social Security COLAs each year, and we are very supportive of legislation such as the Consumer Price Index for Elderly Consumers Act. We also support legislation which would protect seniors in years like 2010 and 2011, when there was no COLA, by providing a guaranteed COLA each year.
Social Security COLA Cuts
Despite evidence that seniors are already being short-changed by inadequate COLAs, some argue that COLAS are too generous and should be cut. The most frequently mentioned option is adopting the slower-growing “chained” CPI for the calculation of COLAs.
TSCL believes that any cuts to the COLA would be unwarranted and unduly harsh, especially for the oldest and lowest income seniors who depend on Social Security the most. A study by TSCL found that the adoption of the “chained” CPI would significantly reduce the amount of lifetime retirement benefits received by future Social Security recipients – in some cases, by as much as $88 per month after ten years.
In addition, cutting the COLA could raise issues of benefit adequacy, especially if Medicare Part B premiums begin to exceed the growth in the COLA. Adopting the “chained” CPI is not the best way to return the program to solvency since millions of seniors are already struggling to keep up with rising costs.
Social Security Notch Reform
TSCL’s members and supporters tend to be older, less affluent seniors. They are also, to a large extent, Notch babies – those individuals who receive lower Social Security benefits because they were born in the years 1917 and immediately thereafter. TSCL feels that this is an inequity that was brought about because of the Social Security Act Amendments enacted and signed into law in 1977.
Just years before they were set to retire, these individuals learned that they would have significantly lower benefits than originally anticipated, and the transition formula provided by Congress failed miserably. The problem only grew and compounded with the inflation that occurred in the early 1980s. Thus, in order to make the Social Security program more equitable in general, and to correct a wrong done to Notch babies, we believe that some compensation for that injustice should be provided.
TSCL strongly supports legislation like the Notch Fairness Act, which would provide either a $5,000 lump-sum payment (payable in four installments) or an increased monthly benefit calculation to Notch babies.
U.S. – Mexico Totalization Agreement
Social Security Totalization Agreements are designed so that workers and their employers would not be subject to double taxation, owing payroll taxes to both the country in which they work, and their home nation. In addition, Totalization Agreements allow workers to earn generic work credits good for receiving retirement benefits in either country. These credits from the United States and other countries can be totaled together to receive benefits. The U.S. currently has 24 Totalization Agreements with other nations, most having economies similar to our own.
The U.S. – Mexico Totalization Agreement – which was signed by the Social Security Administrations of both the U.S. and Mexico in 2004 and is due to undergo review by the current or future President(s) – continues to pose a threat to Social Security beneficiaries. Because of a loophole, if the President signs the final Executive Totalization Social Security Agreement with Mexico, it could lead to Social Security benefits going to individuals who worked in the U.S. while illegal.
Despite the efforts of TSCL and others, knowledge of the U.S – Mexico Totalization Agreement remains limited on Capitol Hill, and the issue flies under radar for the most part. TSCL has expressed its support for resolutions in opposition to the Totalization Agreement. In addition, TSCL is supportive of legislation, such as the Social Security Totalization Agreement Reform Act, which would grant more time for congressional review of these agreements. TSCL also supports loophole-closing legislation which would prevent individuals who worked in the U.S. while illegal from receiving credit for that work for purposes of Social Security benefit calculations.
TSCL has filed multiple lawsuits under the Freedom of Information Act requesting copies of the agreement and other information and has placed ads in The Washington Times in opposition to the proposed agreement. We will continue to closely monitor the pending Totalization Agreement.
Protection of the Social Security Trust Fund
Lawmakers regularly use Social Security’s so-called “excess funds” – those monies not immediately needed – for purposes other than to pay out benefits. Because the Trust Fund is a part of the unified federal budget, it is completely legal for Congress to use the funds as they see fit and to replace them with mere IOU’s. TSCL believes that this practice is fundamentally unfair to Social Security’s current and future beneficiaries.
With Social Security’s Trust Funds set to expire in 2033, TSCL believes that it is now more important than ever for lawmakers to end this irresponsible practice. We support legislation – and believe that any Social Security reform should contain language – to protect the monies in the Social Security Trust Fund by locking them out of the general budget.
Health Care Reform
After nearly a year of debate, President Barack Obama signed the Affordable Care Act (ACA) into law in March of 2010. The ACA was pushed through without bipartisan support and in the face of majority opposition by the general public, especially seniors. While TSCL feels that there are pieces of the law which are helpful and necessary, we have several concerns about the impact it will have on senior citizens.
Specifically, TSCL is concerned that the legislation’s projected Medicare savings are built on shaky accounting. According to the Congressional Budget Office (CBO), the majority of the savings from cuts to Medicare would be “used to pay for spending under the ACA and would not enhance the ability of the government … to pay for future Medicare benefits.” TSCL was disappointed that the ACA did not establish a permanent solution to the so-called “doc fix,” and we are also concerned with provisions that would impose additional costs and taxes on seniors.
To that end, TSCL supports efforts to modify or repeal the following provisions: the increase in the threshold for deducting medical expenses from one’s income for tax purposes (from 7.5 percent to 10 percent); the payment cuts to Medicare providers; the expansion of means testing to Medicare Part D premiums; the freezing of income levels to determine the means testing threshold for both Part B and Part D for ten years; and the creation of the Independent Payment Advisor Board (IPAB).
As the law is implemented and potentially tweaked, TSCL will work with Members of Congress to improve the necessary and valuable parts of the law, and modify or repeal parts that may be detrimental to seniors.
Medicare Part B
The increases in the Medicare Part B premium, as well as the rise in the Medicare deductible, are two additional issues of grave concern to our members and supporters. In some cases, the increase in these two items comes close to offsetting the Social Security COLA.
In addition, many seniors have been subjected to the means, or asset, test for their premiums since 2007. TSCL was very disappointed when the Affordable Care Act froze the income levels subject to the means test for ten years. If the income thresholds do not rise with inflation, more and more seniors will be subjected to the increased costs. TSCL fears that, as costs continue to grow, wealthier seniors affected by the means test may begin to abandon Medicare, driving up the costs for those who cannot afford to purchase private insurance.
TSCL supports eliminating the means test since it could lead to higher costs for all Medicare beneficiaries in the future. We will continue listening to our members and supporters to learn how these increased costs are affecting their standards of living.
Doc Fix for Medicare Providers
Each year, physicians who treat Medicare patients are threatened with sizable scheduled pay cuts. Lawmakers consistently override them with temporary pay patches, or “doc fixes,” however, the ritual has grown unpleasant for all involved. Some physicians have stopped treating Medicare patients, and many more are threatening to do so if a permanent solution is not established soon.
Members of Congress on both sides of the aisle agree that the current payment formula – the sustainable growth rate – is fundamentally flawed, and TSCL strongly believes that the formula breeds uncertainty within the program. We were disappointed when the Affordable Care Act did not address this issue in 2010 and we have been working with lawmakers ever since to find a permanent solution.
TSCL strongly supports legislation like the Medicare Physician Payment Innovation Act, which would stabilize payments to providers while allowing the Centers for Medicare and Medicaid Services to test and evaluate new payment models. We will continue to educate Members of Congress about the failures of the sustainable growth rate formula, and we will work with them this year to develop a path forward.
Medicare Part D
Although the Medicare prescription drug benefit, or Part D, has been viewed by some as largely successful, TSCL believes this program remains flawed. The prices of many prescription drugs dramatically increased after the benefit was implemented in 2006, and many prices continue to soar. This is due in large part to the cost of brand name and specialty drugs for which there is no generic or lower-cost alternative. These medications are often placed in “specialty tiers,” and they significantly drive up the out-of-pocket costs seniors face.
In 2010, the Affordable Care Act began to close the “donut hole,” or the gap in coverage that occurs after a beneficiary’s drug costs reach $2,970 and before they total $4,750. Discounts from pharmaceutical manufacturers and subsidies from Medicare have begun to assist those who fall into the coverage gap. The ACA promises to gradually close the donut hole by 2020. However, TSCL fears that the plan laid out to close the gap may contain some flaws and it deserves a second look.
TSCL supports efforts to increase and improve outreach to seniors, especially those individuals that could qualify for the Extra Help program. Simplifying and streamlining the application process would be a vast improvement to the program. In addition to improving Medicare Part D, TSCL will continue to seek out other solutions for lowering the prices of prescription drugs.
Prevention of Fraud, Waste, and Abuse
Fraud, waste, and abuse are growing problems within both Social Security and Medicare, and TSCL believes that the government is not administering the necessary oversight to ensure that scarce program dollars are being spent properly. By increasing efforts to fight fraud, the government could save tens of billions of dollars each year, reducing the need for benefit cuts.
Fraud within Medicare costs the federal government an estimated $60 billion to $90 billion each year, and according to Attorney General Eric Holder, enforcement efforts have yielded an impressive “return on investment” for the American taxpayer. For every dollar spent fighting fraud, approximately $7 has been recovered and returned.
Social Security’s Disability Insurance program is also littered with waste. In 2011, $1.8 billion in overpayments were made to those collecting disability benefits, and an enormous backlog has accumulated for Continuing Disability Reviews, which are conducted to determine whether a beneficiary has recovered enough to return to work. Every dollar spent reviewing these cases yields more than $10 in savings, and if the backlog were eliminated, more than $9 billion would be returned to the Trust Fund.
It is well understood that the failure to manage fraud results in higher taxes for all and higher premiums for Medicare beneficiaries. The potential for savings for Social Security and Medicare are enormous, and TSCL sincerely hopes that lawmakers will increase preventive efforts in order to ensure that scarce program dollars are appropriately spent.
Prescription Drug Re-Importation
TSCL believes that the Medicare prescription drug benefit law remains flawed and further action should be taken to lower prescription drug costs. The disparity of drug costs in the United States, Canada and Europe remains striking, and we support legislation which would make safe and secure prescription drug re-importation a reality.
Unfortunately, during the health care reform debate, the Senate rejected an amendment that would have allowed for prescription drug re-importation. TSCL will work to ensure that legislation permitting the safe and secure re-importation of prescription drugs is introduced during the 113th Congress. The goal remains to seek safe and affordable medicines for all Americans
TSCL’s all-volunteer Board of Trustees, legislative team, and administrative staff will continue to work tirelessly on behalf of seniors throughout the 113th Congress. We offer not only our lobbying efforts, but also information via our website and newsletter, member benefits, and responses to each and every phone call and letter.