This week, negotiations on raising the debt limit continued on Capitol Hill. Meanwhile, Rep. Joseph Crowley (NY-7) introduced the Seniors Protection Act of 2011, and support continued to build for key Social Security legislation.
New Legislation and Cosponsor Additions
This week, Rep. Joseph Crowley (NY-7) introduced the Seniors Protection Act of 2011 (H.R. 2590). If signed into law, the bill would provide seniors with a one-time $250 payment since Social Security beneficiaries did not receive cost-of-living adjustments (COLAs) for the past two years. Currently, this bill has 18 cosponsors.
TSCL is very supportive of legislation that would provide seniors with an emergency COLA in order to help offset increases in Medicare premiums and protect the buying power of Social Security benefits. In a recent survey of TSCL members, 43.5% of respondents reported receiving reduced Social Security checks this year, and we estimate that seniors have lost 32% of their buying power since 2000! We will continue to work with Members of Congress to ensure that seniors receive fair COLAs in the future.
Also this week, two Members of Congress signed on to Rep. Charles Gonzalez’s version of the Consumer Price Index for Elderly Consumers Act (H.R. 456). The new cosponsors are Reps. Judy Chu (CA-32) and Patrick Meehan (PA-7). There are now 77 different Members of Congress who support CPI-E legislation.
In addition, two Members of Congress – Reps. Betty McCollum (MN-4) and Paul Tonko (NY-21) – signed on as cosponsors of Rep. Mike McIntyre’s Notch Fairness Act (H.R. 1001), bringing the cosponsor total for this bill up to 30. Two new cosponsors also signed on to the Social Security Preservation Act (H.R. 219), bringing the total up to 8, and twenty-six new cosponsors signed on to the Social Security Fairness Act (H.R. 1332) this week, bringing the total up to 108.
TSCL strongly supports these bills, and we were pleased to see support grow this week.
Debt Debate Continues as Deadline Looms
A number of proposals to reduce the nation’s debt were considered this week, including a plan from the Senate’s bipartisan “Gang of Six,” which, according to their estimates, would reduce the deficit by $3.7 trillion over the next ten years. Another significant plan – the Cut, Cap, and Balance Act – was voted on and passed by the House of Representatives. Despite the fact that the August 2nd deadline is quickly approaching, President Obama and Members of the House and Senate leadership still appear to be far from settling on a compromise.
In press conferences throughout the week, President Obama confirmed that Social Security and Medicare are still on the table, but he was not clear about which reform options he would consider. Possible options include increasing means-testing measures in the Medicare program, and switching to the “chained” CPI for calculating Social Security cost-of-living adjustments (COLAs).
TSCL remains opposed to any harsh benefit cuts to Social Security or Medicare – including the use of the “chained” CPI for COLA calculation. Adopting the “chained” CPI would reduce COLAs by .3 percentage points, which could amount to an $18,000 cut in benefits over a twenty-five retirement for someone who retires with average benefits this year.
We will continue to monitor the deficit debate closely, and work to educate Members of Congress about the harms that would result from cutting COLAs for seniors.
Social Security Tax Holiday Resurfaces
Also this week, talks about the Social Security tax holiday resurfaced when President Obama mentioned extending the payroll-tax break by another year. While some view the tax break favorably, others, including TSCL, fear that extending the 2% Social Security tax holiday for employees might make a permanent cut more likely, potentially harming the program’s primary funding stream.
By extending the tax break, supporters aim to stimulate the sluggish economy, but some Members of Congress who have recently spoken up view the tax break negatively. According to an article in The Hill, House Budget Committee Chair Paul Ryan (R-WI) said that an extension of the tax holiday would be an “economic ‘sugar high’ without any long-term benefit,” and Rep. Peter DeFazio (D-OR) has argued that the money could be better spent on more beneficial simulative measures.
The tax holiday is set to expire at the end of this year, but an extension could appear in a larger deficit reduction package to help speed up the economic recovery. We will continue to monitor this issue as talks continue on Capitol Hill.