By Mike Watson, TSCL Legislative Assistant
Over the past few months, many of us may have felt like Dorothy and Toto trapped in the mythical Land of Oz. Like the pair’s famed journey, every twist and turn of the “debt ceiling” debate brought new Oz - like challenges and oddities.
As the debate came to a dramatic conclusion in August, the so-called “Gang of Six” in the Senate released its plan to reduce the deficit, which included a proposal to reduce Social Security cost-of-living-adjustments (COLAs). The plans of several other groups and commissions were also considered.
In addition, in early August the details of the Budget Control Act were finally seeing daylight. The Budget Control Act raised the debt limit and, according to the Congressional Budget Office (CBO), will reduce deficits by at least $2.1 trillion over the next ten years. Yet after all of the tension and acrimony, the Wicked Witch-like nightmare of a fiscal crisis continues to dog us.
The Budget Control Act will work in a two-step process. The law provided an immediate increase in the “debt ceiling” of $900 billion with $917 billion in cuts to government spending over the next ten years. However, the real savings and cuts may pile up in the second part of the process. For this part of the process, the law created a special bipartisan congressional “joint committee” to come up with at least $1.2 trillion in savings to raise the debt limit another $1.2 trillion. The joint (House and Senate) committee is allowed to tackle any part of the budget, including Social Security, Medicare, defense spending, the recently enacted healthcare reform legislation, and taxes. Because of this broad reach, it is possible that the committee could end up recommending reforms in excess of $1.2 trillion.
Negotiators named to the “joint committee” will need the Scarecrow’s brains to craft an achievable plan, and the Tin Man’s heart to feel the impact that changes could have on seniors. Of course, there is always the chance that the “joint committee” will be unable to gather up the Cowardly Lion’s desperately desired courage to actually develop a plan.
In case this happens, to ensure deficit reduction if the “joint committee” does not come to an agreement, the Budget Control Act requires $1.2 trillion in across-the-board-cuts to Medicare providers, defense and domestic spending (exempting Social Security, Medicaid and other programs). If these cuts went into effect, they would result in a reduction in defense spending of 10%, non-defense spending (with the previously-mentioned exceptions) by 8%, and Medicare spending by 2%. The Budget Control Act also provides for an increase of at least $1.2 trillion (or more) in the “debt ceiling” later this year, if the above savings are achieved.
As the nation walks down this “yellow brick road,” it seems as though observers and policymakers alike are suffering from, and may continue to suffer from “commission fatigue.” Of course there is always the frustrating chance that many of the savings considered could be gimmicks and accounting tricks, reminding us of the moment when the undaunted Toto pulls the curtain to find the supposedly all-powerful wizard is really just an ordinary guy operating a smoke and mirrors sort of switch board. It will take more than tricks and gadgets to achieve the important goal of correcting the nation’s fiscal course, while keeping in mind how even small “tweaks” can have quite large impacts on millions of Americans.
The Senior Citizens League (TSCL) legislative staff will continue to provide seniors with a nonpartisan voice on Capitol Hill as we work with Members of Congress and their top staff through this process. To learn more, please visit www.SeniorsLeague.org.
